The sales process used to be fairly simple, generating data that was easy to visualize and track. But ecommerce changed all that. Today, an online purchase generates a storm of data that can be used to improve sales performance—if you know how to harness it. Large companies have understood this and invest in exploiting that data. Small businesses can reap the benefits from this information as well, although they have to be a bit more nimble in doing so, given their limited human and financial resources. Here are a few ideas for how small businesses can go beyond simply monitoring data and turn it into a competitive advantage, especially for identifying actions during key sales periods.
Finding patterns in data starts with monitoring activity, but it doesn’t end there. The key to making the most of data is to look for patterns: What are your customers buying? How are they finding it? Are they coming back? How much are they spending? Can you get them to spend more, and more often?
It helps to think of sales and marketing processes in terms of funnels. You might send 1,000 emails for a campaign that result in 10 recipients buying something. What happens along the way and why, is crucial to helping you determine what to change in your process in order to better respond to your customers.
Here’s an example of a typical email campaign funnel:
- You send 1,000 past customers an email promoting your holiday sale.
- Of the 1,000 sent, 980 are delivered by your email service.
- Of the 980 delivered, 325 are opened by past customers.
- Of the 325 opened, 40 click on a product link in the email.
- Of the 40 that clicked, 35 add a product to their shopping cart.
- Of the 35 that add products to their shopping cart, 8 follow through with the purchase.
Having data about each “narrowing” of the funnel helps you understand where problems may be occurring and where to focus your efforts and resources.
To a see a real shift in business requires consolidating the data gathered from monitoring, analyzing the results over time, and testing variations on strategy to see what happens. Any time is the perfect time to start gathering and analyzing data, but the holiday season is a particularly good time because it’s such a heavy-hitting time of year and ideally you’ll want to improve your performance each year.
It helps to have a goal in order to determine if what you’re doing is working and if it’s even right for your business. For example, are you trying to increase traffic? Boost sales? Reduce customer service calls? In order to test and monitor for these goals, you’ll want to establish a set of key performance indicators, or KPIs, to guide your analysis. Here are a few ideas to get you started thinking about what KPIs to focus on:
Goal: Increase Site Traffic 25%
KPIs: site traffic, sources, click-through rates, social shares, bounce rates.
Goal: Increase Sales 10%
KPIs: Daily sales, conversion rate, site traffic
Goal: Increase conversions 5%
KPIs: Conversion rate, shopping cart abandonment rate, competitive price trends.
Test your ideas
Split testing is a small business owner’s best friend. Once you’ve decided what your goal is and what KPIs you’re going to focus on, you can start getting scientific about how you’re going to get there. Start by identifying different page layouts for product pages and split testing them to see what resonates most with your customers. You can do the same thing with email campaigns and social media projects.
Here are a few examples of things to test on your website:
- Product images
- Product descriptions
- Call to action button text
- Call to action button position
Google Trends is a great place to start identifying what’s relevant in your market via the volume and popularity of searches in your field. This can inform your business from a supply and demand perspective, but also give you ideas for content and specific wording to test throughout your site, email campaigns and social media actions.
Tools and resources
You might be thinking, okay, monitoring and analyzing is great, but how do I manage all that information? Google Analytics is a great place to start. You can run your split tests through their “experiments” function to see which changes work and which don’t. The results are not always what you’d expect, which is why it’s so interesting to perform this kind of test. Having all your data consolidated in one place is also necessary if you’re going to draw any useful conclusions.
You should also think about how you’re going to divide your marketing budget between customer segments. While acquisition should be an important part of your marketing budget, returning customers are actually more valuable in the long run. They are more likely to refer your brand and draw viral attention to it. You can invest in them by sending simple gifts, getting in touch with them via phone or email, or following up with special offers or coupons. By dividing your customers into segments (returning and new) you can test these initiatives and see what spurs repeat spending and increased spending.
Social media creates a lot of data, but it can be difficult to tell what is driving conversions and what is giving you longer term visibility without necessarily resulting in immediate conversions. Facebook Insights and a platform like Hootsuite for Twitter can help you get a handle on these numbers and evaluate your activities on social media. The PrestaShop Addons marketplace features a variety of modules designed to give merchants insight into their marketing efforts, including on social media.
Data can be an incredible competitive advantage for small businesses that understand how to use it. Setting goals, identifying KPIs and regularly testing are the first steps to better data management. Resources like Google Trends, Google Analytics and social media tools like Hootsuite all provide free or low-cost ways to manage data, so there’s no reason to wait to start gathering and analyzing your data!