We wrote a recent article on PracticaleCommerce.com titled 4 Key Ecommerce Metrics that Determine Success. This article was inspired by a talk given by Carter Cast, ex-CEO of Walmart who titled his talk 12 fundamentals of e-commerce. It was a great learning experience for any retailer to focus on the fundamentals and branch out to other important aspects of retail. His talk had such a big focus on metrics, that I decided to write about it and focus on e-commerce metrics.

The first part focuses on what he calls the basic basic of retail, a triangle. Every retailer should focus at first on 3 things: sales, inventory, and customers. Once you understand how to sell to your customers, and have a profitable way to sell your products then you one can measure lifetime value and start learning about the sales funnel. I don’t want to give it all away. The article has been online for a few weeks and focuses on 4 metrics:

  • Customer lifetime value
  • Customer satisfaction and Net Promoter Score
  • Sales funnel and conversion tracking
  • ROI based on variable costs and CLV

I invite you to read the piece comment and tell us about other metrics that were important to you as a starting retailer.

Big Data for a Better Individual Experience

Which Commerce Metrics to Use and How to Gather Them
When it comes to building a company, your customers are your biggest asset and should be treated like so. A lot of data can be collected for businesses who want to better engage customers and increase profit. This information can teach businesses a lot about their customers and be used to better serve them. In this article, you’ll get ideas on ways you can collect this information and act on it for the better of the customers and the busiensses, building a win-win relationship.

Automated marketing is the principle of using customer information and behavior data to engage the customers with the best content at a time when they’re ready consume it. Many large corporations in retail, casinos, hotels, and other industries already employ some of this technology to entice us to consume more of their products and services. It’s also the reason why you will have a completely different experience compared to say, your grocery store or pharmacy down the street.

For online businesses, customer and behavior information is either readily available for use or with some simple steps one can start collecting such information. For businesses that can identify a customer logging in, one can track every interaction the customer have. Retailers, apps, banks, insurance are some industries that usually encourage customers to login into an online portal.

The information that can be collected includes: the last time someone logged in, what pages have been visited, and what actions have been taken (and which ones have not). For organizations with products, using recency, products and categories purchased, time to sale, and re-order frequency are a few commerce metrics worth using in your content strategy. This information can be crucial in determining the right messaging and timing to encourage customers to follow a sequence of steps ideal for the business.

For businesses without an online portal, there are other ways to collect crucial information. A simple way is to encourage customers and visitors to give more information about them once they hit a certain page or ask for specific content. Email of course is necessary to communicate, but the information one ask should not end there. To provide a better experience, businesses should ask for their preferences: products, information, frequency of emails, buying time frame and other relevant information. One can find 3rd party data integrators based on emails or based on shipping zip code. One must create an interactive balance to obtain information that can be used to better serve the customer.

Infographic on Shopping Cart Abandonment

Here is a very interesting infographic provided by Fifth Gear on the reasons why people abandon a shopping cart, best practices to increase check out page conversion rates, and some industry stats. To me the most interesting stats were:

  • The top reason people abandon a cart is high shipping costs
  • Close second reason people abandon cart is that the person wasn’t ready to purchase
  • Average time between visit and final purchase is 3 hours and 34 minutes
  • Best tips to increase conversions checkout page:
  • Include progress display (end in sight)
  • Call out data errors clearly
  • Offer intelligent product suggestions

Here is the infographic, click to view original (larger size):
Infograhic on Shoppig Cart Abandonment

There is a compelling piece published today at Practical eCommerce titled Using Sales Data to Automate Email Marketing. In it, we described a few key metrics to use when planning your automated email marketing campaigns. Customer value, recency, and frequency (RFM) metrics are the 3 broad categories we describe that are easy to use and implement in marketing automation for e-commerce.

We get into details and examples of the most successful types of automated email marketing campaigns. When you finished reading the article, you should have a few ideas you can take and use in your own business. The types of email marketing campaigns that use sales data we describe are: creating a welcome series (we’re going to deep dive on this one soon on this blog), Re-engagement (what to do with customers who have lapsed), Rewards (treating your best customers differently), and cross-sells (targeted and timely offers of other products that are relevant to the consumer).

Check it out, post a comment, tell us your opinion and what types of automated email marketing campaigns have worked best for you.

The Lifecycle of an Online Retail Customer

Just like personal relationships, customers and businesses share a special relationship between each party. Customers interact with businesses through purchases and patronage, and businesses facilitate that interaction with products, specials and continued services. Good relationships last over time, and the same goes for the relationships between customers and businesses. This is what’s called the “customer lifecycle,” and you want to be sure that relationship lasts as long as possible.

customer segments

Customer lifecycles start at the moment a potential customer becomes aware of your products and services. As a business you want to enjoy continued success, and to do that, you need to encourage your customers to return to you over and over again. Let’s take a look at what the general customer lifecycle looks like, and how you can take advantage of this model to earn more conversions.

Lifecycle Marketing Stage 1: Prospective Customers

Prospective customers are slightly interested in your product, or have just learned about your business. It’s your job to market to them so that they feel compelled to buy in and convert on whatever it is you offer. Marketing to prospects, or “leads,” takes everything you’ve got, and is often the biggest hurdle to get over.

Online retailers have an especially hard time with this step, because your interactions are limited, and your potential customer base can be massive. Everything from email marketing and paid advertising to SEO and content marketing should steer visitors towards converting. Be sure that you use automated strategies as much as possible and measure the success—unlike many of the small businesses and retailers that have reported losses from daily deal sites like Groupon.

Lifecycle Marketing Stage 2: New Customers

After you’ve climbed that hurdle and managed to pull a prospective customer in, you need to show them that you’re worth coming back to. With a proper follow-up plan, you can bring that new customer back for another conversion.

There are plenty of new strategies available to online retailers after a customer has converted. You have earned enough of your new customer’s trust to seal the deal and get them to spend their money on you. You should also have a good deal of customer data from their purchase, which you can capitalize on to contact them with more interesting, individualized, and immediately relevant offers in the future.

Lifecycle Marketing Stage 3: Repeat Customers

Actually convincing your customer to come back and convert again gives them the title of a repeat customer. If they continue to return, they’re a loyal customer. Communicating with and marketing to your most loyal customers is still important, because it ensures that they’ll stay loyal, longer.

With repeat customers, your marketing message needs to change. You value their business, but you aren’t trying to rope them in on their first conversion anymore. You know who they are, and they are very familiar with you. Marketing to repeat customers involves a lot of regular and exclusive deals, opt-in deals, and regular updates about products and services that might interest them.

Lifecycle Marketing Stage 4: Lapsed Customers

Just like any relationship, it’s all too easy to lose touch if you don’t maintain the necessary effort to stay connected. Customers are the same way: if you send them the wrong messages, or don’t send any communication at all, they’ll lose interest and will stop making repeat conversions.

Customers are considered lapsed if their repeat purchases suddenly end, and aren’t resumed after a certain amount of time. This may be due to a lifestyle change, a loss of interest in your services, a seasonal shift, or other reasons: baby clothes are a perfect example. New parents will regularly buy new baby clothes, until their baby has grown up—then they may lapse indefinitely, or until they have another child. Marketing to lapsed customers should be all about getting them back: offering exclusive deals and services that convince them to convert again is key.

Getting a handle on your business’s detailed customer lifecycle marketing strategy is the first step in creating an effective marketing strategy for all stages of customer retention and interaction. As you begin to see your business’s customer lifecycle develop, you’ll see how you can adapt marketing strategies to meet customers’ needs through every lifecycle stage, and make the most of each and every customer.

Customer metrics help online retailers understand behavior and interaction your customers have with your brand. Sales metrics on the other hand help you gauge performance of your business within different categories. Every marketer knows that to be successful, you need to use both sales and customer metrics, track them over time and correlate them with the campaigns you are running. With the right sales and customer metrics in place, you will get a more accurate measure of campaign performance and ROI.

Mineful makes it very easy to integrate your shopping cart data. Once integrated, it shows right away 8 very important sales and customer metrics every retailer should look at to understand your customers’ behavior. Here are the 8 sales and customer metrics e-commerce businesses quickly have access to:

1. Revenue per Customer (trailing 365 days) revenue per customer
This metric compares the average revenue a customer gave your business in the last 365 days with how much it was 365 days before that. So if you are using Mineful, or any other customer retention tool to increase repeat business, customers should on average be giving you more revenue. The calculation is very simple since it is just averaging total revenue by the number of customers who made a purchase within the specified time period (if you hover your mouse over the chart, you will see the dates of the period).

2. Average Number of Purchases (trailing 365 days) average purchases
Similar to the metric above, except that this one measures how many times has a customer made a purchase in the last year. Another important metric for repeat business as you want more revenue yes, but also more interactions with your company. This number should be increasing with any customer retention program. Even a small decimal increase can mean big revenue impact.

3. Re-Order Frequency re-order frequencyThe average number of days between orders for customers with more than 1 transaction. Some people call it Velocity, which I think it’s a cooler name. Re-order frequency is an important customer metrics that measures how fast people come back to purchase more of your products. This metric would be useful too if separated by product so you know when it would be a good time to send an automated email based on a specific product.

4. Customer Lifetime Revenue
The total amount of revenue that a customer is likely to get in for the company. Note that since we don’t know your cost of acquisition, we can’t compute customer lifetime value. This can help a business in arriving at the starting point of the marketing budget; something that is done in an arbitrary manner in many cases. Once the aggregated lifetime revenue of the customers is known the marketing budgets can be arrived at by looking at the return on investment that one expects.

5. Sales and Transaction Trends
Simple sales and transaction trends on a daily, monthly, quarterly, and yearly period can provide insight on the progress of your business in comparison to other time periods. Two of the metrics trended over time were mentioned before and the other ones included are revenue total number of orders per period.
retail sales metrics

6. Purchase Frequency retail purchase frequency
The number of customers who have made 1,2,3,4, or more than 5 purchases in the given time period. Which customer have made more than one purchase in a year? This metric speaks to the inescapable truth that email marketing strategies figure prominently in online marketing and brand positioning campaigns. Many online retailers have more than 75% of their clients order only once. When one creates procedures and strategies to improve this, the purchase frequency metric will help measure the performance of these efforts.

7. Number of New Customers new customers metric
So far we’ve focused on metrics regarding customer retention and the value of the customer. This sales metric trends how your customer acquisition programs are doing. By period, you have the total number of NEW customers so you can track the success of inbound campaigns. Many business intelligence tools and even the shopping cart platforms track number of orders by month, but tracking new customers by period allows you to measure the performance of inbound marketing strategies.

8. Recency recency metric segments
Recency is simply the number of days since the last purchase. After you integrate your data, we compute 3 segments of customers based on recency and they are defined as follows:

New – Those customers whose last order is before your re-order frequency metric (defined above). So if your average re-order frequency is 60 days, new customers are those that made their last purchase in the last 60 days.

Inactive – We look, as in new customers, at the average re-order frequency from all your customers. If a customer is on the bottom 20th percentile in terms of average frequency, then they are considered inactive. Hover your mouse on the customer segment count to see where the threshold lie.

Engaged – Basically the rest, those that are neither New or Inactive.

If you are thinking about using automated emails with Mineful, now you know other metrics that you will get quickly after you sign up. Yes, we also have email metrics that address click and conversion rates.

But if you are not using Mineful, you can gain some knowledge just by hooking up your data and accessing these metrics within minutes. What are you waiting for? Contact us today.

Last week I attended the Internet Retailer Conference in our very home town Chicago. I heard many talks, visited all the vendors in the exhibit hall, and talked to many retailers. In this post I summarize all the latest trends in e-commerce and what all that means for online retailers.

It was of no surprise that mobile was a common topic. It was a strange not to see more vendors in this space with innovative mobile solutions. There was a workshop dedicated to what mobile means for online retailers. For retailers, the site not only needs to be mobile friendly, but have a design that makes browsing pleasant and easy to buy. One retailer was showing me her site on her phone as she discovered that many limitations on her site. For example, the images could not be enlarged and the buy now button was not accessible. She told me it was her first time browsing her own site on a mobile device. Many commerce platforms already design a site as mobile-friendly, but the question is should you build an app or redesign the mobile site. Either way, and whether you develop it in-house or outsource it, mobile is growing faster than anything and making it easy to buy on a phone is #1 priority.

There were both lots of vendors helping you go global as talks regarding strategies when selling outside of your country. It is obvious that by going global suddenly your market expands dramatically, but just because you can sell doesn’t mean you should. I did talk to a few people about tax issues. Mainly, every country has its own unique challenges when exporting goods. I have to say that the US is an export-friendly retail country when compared to Brazil (60% tax? one guy mentioned) and latin american countries. The place was packed with fulfillment vendors, I had no clue it was such a competitive industry. Even then, small vendors were growing fast because they were able to deliver the goods anywhere in the world.

This is where I spend most of my time. One interesting talk was titled ‘The last click shouldn’t win’ and it basically said that just because someone clicked on an ad it doesn’t mean it was that ad that made the purchase. It is the typical marketing mix problem where someone may see you various times (through search, retargeting, banner ads, etc.) and at some point then makes the purchase. I also enjoyed ‘how to get a bigger marketing budget’ which essentially explained that marketing ROI should be based on profits and not sales. It compared the success of marketing campaigns when calculated in different ways and showed why profit ROI was superior. There was a big push for big data, customer analytics, customer behavior, and strategies on how to be successful with all the data online retailers have at their fingertips.

Email marketing was mentioned extensively as well and had a few retailers explaining their evolution. One marketing VP explained how in a few years the went from sending the weekly or monthly newsletter to dissecting the customer base into actionable segments to test copy, frequency, and time. There were some questions regarding emails in a mobile device and how much is too much email, no good answers to both from the presenters. A few ideas that I heard were:

  • Hire a great designer you can trust and criticize
  • The more you know about your customers, the better your conversion rates will be
  • Test and track everything
  • Be creative when acquiring customers: contests, giveaways
  • Go wild and be different with: welcome emails, re-engagement emails, and shopping cart abandonment

The amount of personalization done on sites is at the same time impressive and scary. Once you’ve visited an online retail site, your browser might be inserted a few cookies to understand more about you and what you search for. This information is then used to show you the products that might interest you and at the price that you’d like them to be. There are many vendors in this space as well, but this technology is only accessible to mid and large retailers because of their price points.

Yes, there was a lot of talk about social media. Yawn.

In general, it was a great conference to go. For me, I learned a lot about retail from all types of angles. I would ask retailers, “How did you become a retailer?” and they would tell me their story from idea, to getting the products, fulfillment, and now growth strategies. It did remind me a bit about our humorous article How to Succeed in Retail Without Really Trying. Vendor or retailer, I think everyone benefited. Everything going on in retail was there. If you weren’t able to go to the conference, I invite you to visit their conference website and see all the talks and vendors that were there.

Follow Jaime on Google+ and Twitter.

retail without really tryingMr. Finch, a young entrepreneur in New York City, decides to sell beauty products online. First thing he does is sign up for an e-commerce shopping cart software called BigCommerce. He hires a designer to get his shop looking slick. He uploads a few products, images, descriptions and in less than a week he’s ready to start selling his wonderfully organic chemical-free beauty products.

He hires a ghost writer and a social media marketing agency to help him drive traffic and spread the word through online channels. WordWatch is helping him automatically manage his Adwords campaigns for better ROI. He also sets up a referral program using Buzz Referrals and Curebit so his customers can tell their friends about his e-commerce store. To measure social media ROI, he adds AddShoppers‘ social analytics platform. For a few landing pages, he sets up Visual Website Optimizer to make sure the message, imagery, and offer are the most effective ones.

He does not want to think much about which products to remove and which ones to add, so he installs Yotpo and Grapevine Reviews to understand how much people like each one of his products. These also helps his site visitors view ratings and make better product purchase decisions.

With so many orders and customers, now he has a customer management problem. First, he sets up TeamSupport for a powerful yet simple way to support his customers. To manage the relationship, Mr. Finch automates marketing using Mineful. With it, he can trigger emails offers based on purchase history, detect when there are changes in purchase patterns and request post-purchase feedback to ensure everything is running smoothly. With Mineful’s shopping cart analytics, he can also see sales and purchase trends and receive alerts when something needs his attention. For those shoppers that visited the site, but abandoned the shopping cart, he resolves to the Abandon Cart plug-in to automatically remind them of their abandoned cart.

Suddenly, shipping is becoming a bit of work so he decides to implement Ordoro to manage inventory and packaging labels across sites. Aftership informs his customers where their shipment is through email and SMS so he doesn’t have to answer questions to customers as to where their shipments are.

Tax season is approaching after a successful year, but thanks to a the Peachtree plug-in, all he does is export his data and send it to his accountant.

Mr. Finch’s e-commerce store is growing fast and thanks to all the affordable technology available to him, he can spend most of his time sipping Piña Coladas in the sunny beaches of Puerto Rico.

Follow Jaime on Google+ and Twitter.

Email Trigger App for BigCommerce

email trigger for BigCommerceBigCommerce customers can drive repeat purchases and better target shoppers with the newest BigCommerce app, Mineful. Mineful uses analytics and email triggers to bring users back to your online store using smart, data-driven and respectful campaigns. Mineful expands email, analytics and marketing functionalities not previously available to BigCommerce stores.

Mass marketing is dead. Event-driven and data-driven marketing not only provide greater results but it is a more respectful way to market to shoppers. Technology nowadays can help a company control the frequency, content, and offers that a shopper receives based on their historical behavior. Unfortunately, that technology is only available to bigger organizations. “Mineful’s goal is to level the marketing playing field with the likes of Target” says Jaime Brugueras, Ph.D. CEO of Mineful.

Using Mineful’s powerful and analytical email trigger app to segment and target more efficiently, BigCommerce clients can get more repeat sales from their current customers. Email someone too often or with irrelevant offer and they’ll quickly unsubscribe. By timing campaigns intelligently and using each shopper’s past behavior, one can create a system that markets your product automatically. It is a like a sales force working for you 24/7.

The integration seamlessly sends customer, product, and sales data into Mineful. The software then quickly displays a retail customer dashboard with metrics and trends regarding purchase behavior. Users then can configure rules to start triggering emails. Finally, Mineful makes it very easy to vary content, A|B test, and measure all the interaction to optimize each marketing campaign.

For more information visit Mineful’s product page or visit BigCommerce.com.

Our friends at Software Advice have put together an article on their marketing automation software website that’s a must read. The article is titled Marketing Analytics vs. Website Analytics and it was written by Hubspot’s product manager Meghan Keaney. Mainly the article touches on how these two data sources are better used when put together. Their discussion focuses on measuring the ROI of your marketing initiatives in order to answer questions like:

  • Are my readers becoming customers?
  • How many people clicked on an email marketing campaign and bought something?
  • Which results in more leads, social media, PPC, or organic search?
  • What’s the ROI on each of my ad campaigns

It is a very interesting and must-read for every one in e-commerce. Check it out here.

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