If you’re an e‑commerce professional, you know how much information there is about your customers. And with the right strategies and tools in place, you can use this data to improve customer experience, increase sales, and, most importantly, grow your business.
Want to know how? Today, we will dig deeper into using analytics, customer data, and what tools are the best for this purpose!
Without further ado, let’s get started!
What is customers’ data analytics?
Customer analytics is collecting, organizing, and analyzing customer data to identify trends, patterns, and opportunities for action.
Customer data hints at customers’ behavior. For e‑commerce, it is very helpful when you want to achieve your business goals, gain valuable insights about customers, and improve customer service, marketing efforts, and overall customer experience.
Analyzing customer data has other benefits as well.
Why is it important to analyze a customer’s data?
Tracking data and customer behavior have many benefits. Here are a few of them.
Customer data analytics supports decision-making
Customer analytics helps understand their customer’s behaviors and preferences. This information can help companies decide how to market themselves, what products they should sell, and where to focus their marketing efforts.
Businesses may enhance marketing strategies
Also, it assists e‑shops in improving their marketing strategies and product offerings. Companies can use data collected from customer surveys to determine whether their current marketing campaigns are working well. If not, they can adjust their strategy accordingly.
Also, to make it even more effective, the offerings might be automated when using tools like Luigi’s Box Recommender.
Tracking data makes it faster to spot trends and tendencies
Moreover, thanks to data analysis, companies identify potential problems before they become major ones. Companies can spot trends and patterns indicating future problems by analyzing customer feedback. They can then take steps to prevent these problems from occurring.
Customer data analysis helps make financial decisions
Business owners make informed decisions about their company’s finances when they have access to crucial data. For example, businesses can use customer analysis to determine if they’re making enough money, need to raise prices, or cut back on expenses.
Using analytics supports personalized user experience
In addition, marketers can target specific groups of consumers when they have easy data access. For example, they can use customer feedback to determine their best customers and what products and services appeal to them, and they also can tailor advertising messages to reach these people.
Analyzing customer data can help you increase profits
Did you know that by analyzing customer data, salespeople can optimize pricing to maximize profits? They can use customer insights such as purchase history and customer segments to identify profitable products and adjust the pricing accordingly. Also, it is much easier to create different pricing strategies (dynamic pricing, for example) for different customer groups.
Businesses attract more loyal customers
Finally, brands can build loyal followers through customer analysis. Companies can use customer feedback to discover what their fans like and dislike. They can then incorporate these insights into their brand identity and marketing strategies.
It sounds great, doesn’t it? However, you need to think over several things before you start analyzing the data.
Before you start analyzing data…
You need to consider a few things to fully enjoy the advantages above. Without the following steps, it would hardly be possible to read and analyze customer data effectively.
To analyze data correctly, you should first:
#1 Make sure you understand the business context
It should be a starting point. The ultimate goal of any business is to sell and increase revenue. But think of how you want to achieve it and what steps you want to take. For example, if you want to focus more on online selling, you will be tracking different metrics than a business whose primary goal is increasing sales in a brick-and-mortar store.
Additionally, remember to set achievable goals. Ensure they’re SMART. They should be specific, measurable, achievable, relevant, and timely. By setting such goals, you will be motivated and will achieve them on time.
#2 Identify your analytical goals
When you’re ready with your business goals, it’s time to focus on your analytical ones, which means what you want to monitor. For e‑commerce businesses, it may be customer engagement, on-site search, etc. But, of course, those are only a few basic examples, and it all depends on what type of business you have and how your customer journey looks at your store. So take a moment and think about what your strategy would be.
Remember that all companies are different. The ultimate goal is to increase revenue, but there are many ways to do that, for example, by focusing on the user purchasing experience. However, some other brands’ focus might be on enhancing marketing strategies or any other aspect. In that case, they would track different metrics.
#3 Decide what metrics are the most important for your business
Deciding what metrics to follow might be a challenging task. Yet, they all seem vital. However, after identifying your goals and objectives, it should be less complicated. A clear understanding of what’s essential for your business allows you to determine what metrics are necessary to measure to achieve these goals.
Additionally, consider the types of data points that will give you insight into your business performance and guide future decisions. Also, take the time to analyze the data sets to identify critical correlations and trends — for instance, the most popular products in your store based on the search results.
By taking the time to understand what metrics are most important for your business, you can ensure that you make the best decisions for your company.
👉 Here are what metrics are worth following in e‑commerce.
#4 Choose analytical tools
Analytical tools measure various aspects of business productivity, product or service quality, support businesses to grow their customer base, and more. Also, they help determine if the products are effective and safe. You can gain valuable insights into customer behavior, product performance, and overall trends with the right customer data platform.
However, selecting one might be an uphill battle. You will realize how difficult it is to decide once you search for the right tool for your business. Why? Because there are many of them — Customer Relationship Management (CRM) platforms, Google Analytics, Luigi’s Box… all deal with data, but which is the best one? You need to decide.
Before investing money into a tool, here are some tips on choosing the most suitable one.
Once you set business and analytical goals and know your audience, choosing a customer data platform will be easier. While researching, it’s a good idea to compare the platform to the competitors. Consider their pricing, features, and user reviews. The reviews are critical — you can learn about user experience firsthand and whether it’s worth the purchase, time, and effort.
Also, check out its customer data integrations. When choosing an analytical software program, it’s essential to consider the tool’s different integrations. Look for a customer data platform that can integrate with your current e‑commerce platform, payment gateway, and other business tools. With such integrations, the data flow and reporting is a seamless process.
Once you’ve identified the best customer data platforms for your e‑commerce business, it’s time to test them out. It would be great if the tool of your choice provides a free trial, so you can see how it performs in practice. Look for the most relevant features, such as customer segmentation, purchase funnel analysis, or A/B testing. Test out the tools to ensure they provide the insights you need.
How to analyze customer data and track performance?
Keeping track of performance is crucial to determining which analytics goals are being met and which aren’t. Using analytics may be highly beneficial for many teams and departments — for example, marketing teams, sales teams, customer service teams, IT departments, and more.
Of course, tracking and analyzing will look different depending on the goals you’ve set. Here are some general tips that may help you do it effectively.
Monitor the key metrics regularly
Regularly it may mean once a day, once a week, or even once a month. It all depends on the metrics and their importance. The best would be to discuss it with the data specialist to set the time frame and plan when it’s best to get the reports.
For some e‑commerce stores, it may be enough to track the shopping cart abandonment metric once a month, but when you decide to make a big sale, such as buy two and get one for free, it may be a good idea to analyze how loyal shoppers and potential customers behave only when the sale is on.
Optimize areas in your business based on chosen metrics
When you see some alarming decreases or increases in the metrics you consider essential, don’t wait. Instead, optimize them with specific actions. Also, keep tracking the metrics to control the changes.
Take into account a bigger picture
It’s vital to consider a broader perspective. The alarming changes might signal that something is happening in the market. For example, new solutions are available in the e‑commerce industry, or new competitors have entered the market.
Segment your audience
Audience segmentation categorizes customers based on their behavior, preferences, or other aspects like age, where they live, or their purchase history. It helps you target them with specific messages and products, which is also great for marketing purposes.
Also, segmenting has several benefits — it helps to determine what type of customers you have and is an excellent way to understand them. You will know who your customers are, their needs, and how you can meet them. Also, knowing your customers’ expectations gives you a better understanding of what analytics goals you should be setting.
Read customer data with Luigi’s Box
Using analytics with Luigi’s Box solution is easy and quick. It provides a solid set of tools like analytics, product recommender, AI-powered site search,and personalized product listings. But the list continues. With Luigi’s Box capabilities, customer data analysis is a pleasure.
You can measure your results with Luigi’s Box. How? Thanks to its many valuable features and functions for data analysis. Let’s take a look at them!
Take advantage of a user-friendly dashboard
You can see everything neatly organized and in place with an intuitive dashboard. There’s no need to jump between all the reports — the dashboard conveniently displays them all, so you can get a quick overview of the search status whenever you want.
With Luigi’s Box, customer data analysis is straightforward and getting the answer to questions like
- Is my search converting?
- Do many customers get “no results”?
- What percentage of searches result in irrelevant content?
is just a matter of seconds.
Dig into content analysis
What’s more, you can get your content analysis pretty quickly — meaning how your customers find out about your website. For instance, you can improve your content and its findability by correcting typos, finding niche queries, and rephrasing them. For relevant queries, you’ll see which products are found most frequently and whether they are listed appropriately.
Check out trends
Luigi’s Box will give you more actionable insights if you want to see what products are the most popular at the moment and what the trends are. You’ll get to know the following:
- search terms your customers use
- what products are hard for them to find
- how to make their search experience better
Aside from that, you’ll see if your top queries are performing effectively.
Fix bugs immediately
A search bug often ruins the whole effort you put into a campaign (for instance, Google Ads) — people are driven to the wrong landing page and give up purchasing at your store because they can’t find what they are looking for. Mind that the e‑commerce industry is tremendous, so going to the competitors is relatively easy these days.
Luckily, you can prevent such situations using the FixIt feature. With this Luigi’s Box solution, you get bugs fixed on the spot and be happy with relevant content and results.
To start using Luigi’s Box, you should:
- create an account by filling out a quick form – you need to enter some basic personal details such as name or email address
- insert the script – it’s just one line of code
- launch Analytics – then you’ll see all the details and essential metrics on the dashboard
- take advantage of the reports!
So if you’re running an e‑commerce business and want to maximize your revenue using customer database analytics, Luigi’s Box is an excellent choice! And some good news here is that analyzing is not the only powerful feature. There’s also…
Product Recommender system
The product recommender system lets your customers get recommendations based on their previous purchases and preferences. This shortens the customers’ path — they don’t have to look for the product they might want to buy because they’re close at hand. What’s even better is that they are personalized.
Intelligent Search with autocomplete
The other tool is an intelligent Search with autocomplete solution. The process of searching for items becomes more accessible, which increases customer satisfaction. Users do not have to worry about typos (which are frequent, especially when we’re in a rush), and it saves time — there’s no need to type the whole search query to get the relevant results.
If you want to interpret the other customer interaction with your e‑commerce website, Google Analytics might be a complementary tool to Luigi’s Box.
Analyze and read customer data with ease
Now you know how to read data — with the right tool! Luigi’s Box is perfect for e‑commerce, startups, B2B, SaaS, and more if you haven’t decided on the customer data platform yet. Thanks to a solid set of features, you can keep an eye on important metrics and increase customer satisfaction. Don’t wait. Book a demo call with Luigi’s Box reps!