A few weeks ago, Denis wrote a technical blog post on how to implement Segment, a tool that allows you to collect your customer data, on a Solidus e-commerce platform. We covered in particular how to go about integrating various e-commerce specs, such as tracking users, orders and products. In this follow up post, we will briefly cover the main reasons why implementing a tool such as Segment on your online store is so important – and give you some resources and further reading.
Knowledge and action
The main reason why we do analytics is so we can learn – learn about your customers, their shopping habits, where they come from and where they drop off, what makes them buy more and what makes them leave your site. Knowledge is power, no doubt about that. Understanding the fundamental metrics of your site and your customers is crucial to growing and scaling your business. The learning should really be at the heart of the product development, making sure every new feature released is going to make your store better.
Besides, the consumer market is always shifting. As trends come and go, having the correct information will give you the edge over your competition. With that information, you will be able to predict trends and stay ahead of the curve. You’ll be able to determine the avenues that are no longer profitable and thus allow you to shift your business strategy. Even within your store, you will be able to see how well certain products are doing compared to others. This allows you to stock up on the correct types of goods that your customers actually want. All of this, of course, will result in bigger profit margins, enabling you to grow.
Tracking the right metrics
In order to know how your store is doing and important things to focus on, you need to be collecting the right data. It should become part of your daily work flow so it is not out of sight, it’s always in mind. An important thing to remember is that tracking the wrong metrics is just as bad as tracking no metrics. Bad metrics are of no value to you. Before you begin tracking, you have to decide what you want to learn and what is important to the growth of your business. Then you’ll need think about how you might go about measuring it from your store – such as what actions needs to be taken to track it.
It is easy to be fooled by vanity metrics such as total number of orders placed, or total registered users etc. These number never really go down – they just get bigger and bigger. The greater those numbers, the more you are hooked on them with no clear indication of the action that is leading to that growth. The important kind of metrics to focus on are the actionable metrics: active users, engagement, conversions, revenues and profits.
One of the core components of the Segment Spec is the track method. It records any event that the user has triggered. The most important actions in e-commerce that you want to track are:
- viewing a product category
- viewing a product
- click on a promotion
- adding to basket
- removing from basket
- completing an order
All of these will help you define the journey for a customer as they browse your store.
Choosing the right tool
There are over 1,000 different marketing and analytics tool available. As a beginner it can be overwhelming to know where to start. A very good point to start from is by using Segment. Segment is a platform that lets you aggregate all your analytics data from your website and then send it to hundreds of other tools and platforms. These can range from Google Analytics, Mixpanel, Intercom, MailChimp, Facebook Pixel and even Amazon S3. With Segment you can track users’ activity throughout your application for many tools and platforms.
You’ll find plenty of resources on e-commerce analytics online. Here are a few good places to get you started:
- Kissmetrics Introduction to Ecommerce Analytics
- Kissmetrics also have some marketing guides that you may found useful
- Segment’s blog post on ecommerce analytics
- Shopify’s beginners guide to Google Analytics
- Google Analytics for Ecommerce on Justin Cutroni’s blog
And a few interesting books, although they’re not specifically for e-commerce:
“Marc Andreesen once said that “markets that don’t exist don’t care how smart you are.” Whether you’re a startup founder trying to disrupt an industry, or an intrapreneur trying to provoke change from within, your biggest risk is building something nobody wants.
Lean Analytics can help. By measuring and analyzing as you grow, you can validate whether a problem is real, find the right customers, and decide what to build, how to monetize it, and how to spread the word. Focusing on the One Metric That Matters to your business right now gives you the focus you need to move ahead–and the discipline to know when to change course.
Written by Alistair Croll (Coradiant, CloudOps, Startupfest) and Ben Yoskovitz (Year One Labs, GoInstant), the book lays out practical, proven steps to take your startup from initial idea to product/market fit and beyond. Packed with over 30 case studies, and based on a year of interviews with over a hundred founders and investors, the book is an invaluable, practical guide for Lean Startup practitioners everywhere.”
“Adeptly address today’s business challenges with this powerful new book from web analytics thought leader Avinash Kaushik. Web Analytics 2.0 presents a new framework that will permanently change how you think about analytics.
It provides specific recommendations for creating an actionable strategy, applying analytical techniques correctly, solving challenges such as measuring social media and multichannel campaigns, achieving optimal success by leveraging experimentation, and employing tactics for truly listening to your customers. The book will help your organisation become more data driven while you become a super analysis ninja!”
“Google Analytics is a free tool used by millions of Web site owners across the globe to track how visitors interact with their Web sites, where they arrive from, and which visitors drive the most revenue and sales leads. This book offers clear explanations of practical applications drawn from the real world.
The author trio of Google Analytics veterans starts with a broad explanation of performance marketing and gets progressively more specific, closing with step-by-step analysis and applications.
Throughout the book, the main emphasis is demonstrating how you can best use Google Analytics to achieve your business objectives.”
“Written by an in–the–trenches practitioner, this step–by–step guide shows you how to implement a successful Web analytics strategy. Web analytics expert Avinash Kaushik, in his thought–provoking style, debunks leading myths and leads you on a path to gaining actionable insights from your analytics efforts. Discover how to move beyond clickstream analysis, why qualitative data should be your focus, and more insights and techniques that will help you develop a customer–centric mindset without sacrificing your company s bottom line.”