But not all data – and data-collection methods – are created equal. Often times, metrics are either superfluous or don’t have enough influence on decision-making to impact the bottom line or improve day-to-day operations. With retailers already swamped during the holidays, it is more important than ever to be strategic when deciding which data to collect and how to mine it.
It’s easy to fall into the trap of gathering all kinds of data because you don’t want to miss an opportunity. A prime example is blindly tracking every type of social media data available (Klout scores, Twitter followers, etc.) because everyone else seems to be. If your target audience is more mature and not on social media, then tracking this data will not provide you with meaningful insights to guide business decisions.
In fact, there are really just a handful of data points to keep an eye on. These are the ones I suggest you include in your data-driven marketing strategy.
This includes number of unique visitors, bounce rate and the source of traffic. Tracking visitors, as well as where they came from, helps determine which marketing channels bring you customers. Leverage this data to allocate your budget more cost efficiently based on the results you are seeing.
On-site browsing activities
Track the time spent on your site, the most visited pages or any other data that indicates what customers did while they were on your site.
Try to spot patterns in browsing behavior. For example, at which point of the sales process do visitors usually leave? Is it on the page where they’re supposed to hit the “Proceed to Checkout” button or do they abandon their cart right before the final step (i.e. “Complete Your Order”)?
Insights like these tell you exactly which pages or components of your site need to be optimized or improved so you can increase conversions.
This particular data point gives you information on the conversion rate of each product. It also tells you which items are getting the most or least customer attention.
Knowing what products your customers are looking at and how they’re converting can provide useful insights. Perhaps you’ll discover that a particular item would sell better if it were on sale or part of a promotion.
Sales / average order value
The average order value of your customers tells you which resources should be allocated in acquiring and retaining them. Exactly how much are you spending marketing to each customer? Remember that for marketing efforts to pay off, that number has to be lower than the AOV.
Tracking bargain purchases can tell you which types of promotions are getting people into your store (both online and brick and mortar), and will help you improve future offers. They can also indicate if your promotions are actually generating profits. Bargains may bring people into your store, but are they really putting money into your pocket?
Don’t forget to track returns, so you can get real data on how much customers actually spent.
Also, remember that bigger or more expensive doesn’t always mean better. Before you go looking for overly sophisticated or pricey data tracking solutions, see if you can find simple tools that would get the job done for free or at a low cost.
For instance, when it comes to tag management, Google’s free and lightweight Tag Manager will likely suffice. It enables you to efficiently manage your tags without bogging down your site and it helps you measure traffic and visitor behavior so you can gain insights on which of your strategies are bringing in customers and conversions.
Jerry Jao is CEO of Retention Science.