Predictive Analytics are your ticket to higher revenues
In case you haven’t spent much time with web analytics, I’ll start by giving you this definition of predictive analytics (PA), courtesy of Wikipedia:
A branch of statistics, predictive analytics utilizes collected data to forecast future trends and patterns of behavior.
By analyzing descriptive statistics, we can comprehend the capacity of data to explain customer activity. On the other hand, with predictive analytics, we can understand what must be done next – relying on past occurrences to form forecasts concerning future events.
Clearly, if you can recognize and forecast what your clients and potential clients desiring to make an initial purchase are expecting from your brand, then you will have the key to bigger profits and customer devotion. Consequently, you will be a highly esteemed analyst among your peers.
Quantitative benefits of PA platforms
The majority of e-commerce enterprises pay a great deal of attention to the Revenue Per Visitor (RPV) and Monthly Recurring Revenue (MRR) indices. But boosting recurring monthly profits is even better. Mobile applications can assist in increasing your Average Order Value (AOV) and supplying the best pricing for every customer.
Higher order values from up-sells
To begin with, let me explain what an up-sell is. This is when a company provides additional related items or components in addition to the primary item. Once you’ve chosen to purchase a bicycle, the salesperson may suggest purchasing additional items such as a helmet and gloves, known as an up-sell, or in this case two up-sells.
Up-sells are the money-making opportunities with the least effort in e-commerce sales. Why? In order to safely cycle around the area, your client must obtain all the necessary items for a full solution. In other words, if you can give the correct products at the correct location and moment, there is a higher chance that a customer will buy one or more of them.
That’s where PA platforms come in. By gathering data on interactions and transactions, a PA algorithm can initially sort visitors into their specific categories. During the initial visit, the algorithm can then display the most compatible accessories for the primary product that is being searched.
On the second visit, the algorithm is able to provide accessories by using what it learned from the user’s movements and activities. If your personal assistant system is designed to accommodate it, then the tool can evaluate different locations for the accompanying merchandise. Throughout the process, the algorithms are constantly being refined and improved to increase the likelihood that users will click the “add item” or “add bundle” button. This, in turn, lifts your AOV.
Higher profit margins with optimal pricing
If you are unaware, there is a great deal of price manipulation happening around the globe. For instance, the individual seated beside you on the past journey likely paid an alternate airfare as you (perhaps even much lower). Airlines pioneered the concept of “dynamic pricing”, and online commerce platforms have stepped up their utilization of this technique even further.
For illustration, if you’ve been to an online store three times, subscribed to their promotional emails, checked out a certain product page three times, and moved your mouse over the “add to cart” button twice, you have greater involvement than a new user who hasn’t gotten to a product page.
In situations like these, a wise personal assistant system could send out a notification noting, “It looks like you’ve checked out [product X] several times.” How does a 15% discount sound?’, after which you could offer three choices:
- ‘Sounds good – add to cart and apply discount’
- ‘I have a question – let’s chat’
- ‘No thanks’
Certain PA solutions have the ability to change their prices without your intervention. Let’s use the instance of someone who resides in an affluent postal area as an illustration. You could provide the item to the guest at a traditional price tag of $XX. But the algorithm could give someone from a middle-income area a discounted price of $0.85 times the original cost of the item. In both scenarios, the company would most likely achieve a high profit margin.
Qualitative (and strategic) benefits of PA platforms
The potential advantages may not immediately have an effect on your measurable objectives, but they could give insight into what to do next in terms of marketing and augment your team’s effectiveness.
Gain business intelligence from usage reports
Since all of the leading PA platforms include reporting capability, you can easily run reports that show things like:
- RPV based on user group.
- RPV based on key visitor interactions (e.g. launched one or more chat sessions).
- RPV based on correlations with other variables (how far down the Product page the visitor scrolled, and the pages viewed beforehand).
For instance, it might be established that customers who watch videos have a 20% augmented revenue per visitor. You ought to tell your designers to make the ‘play video’ feature more attractive (for instance by making the ‘play’ symbol more visible or the introduction picture more captivating).
Gathering this business facts enables you to form conclusions about why these trends exist and design A/B tests which leverage these realizations.
PA platforms could be your star player
Predictions generated by analytics algorithms and the improvement software they enable have clearly illustrated their potential to substantially boost sales on a month-to-month and yearly basis for notable companies. Equally essential, the reporting instruments incorporated into these stages give the bits of knowledge online business organizations need to inform both UX enhancements and the remainder of your advanced promoting effort.
Despite having plenty of skilled personnel, it’s difficult to process all the data your e-commerce site and its pages accumulate on a daily basis. Conversely, powerful PA systems equipped with ample data and the ideal customer specifics, plus applicable business rules, can shine as a key component of your team. And one that won’t ask for a large salary increase next year.
What is ecommerce analytics?
Examining and sharing insights from web-based commerce data is the process of ecommerce analytics. This includes uncovering, deciphering, and relaying connections between pieces of data that are pertinent to digital commerce. Analyzing ecommerce activities can identify user activity, evaluate performance trends, and gauge return on investment (ROI).
Marketers make use of analytics to calculate the returns from campaigns and make decisions that bring about an increase in sales, lower expenditure, and foster business development.
Ecommerce analytics helps centralize and manage data. Siva K. Balasubramanian, holder of the position of Associate Dean and Professor of Marketing at Illinois Tech’s Stuart School of Business, states that companies commonly struggle with the availability of multiple sources of data, which enable them to gather and combine information about customers, products, and markets. They work hard to effectively examine the datasets accessible to them.
Balasubramanian declares that marketing analytics provides helpful approaches for addressing the issue at hand by deciphering the data to create measurements that are the most beneficial for continuously tracking the progress of the venture. The main emphasis of analytics lies in matters that are of greatest importance to the organization, and the effectiveness measurements are useful when pinpointing and resolving problems right away.
Analytics involve both a creative and a scientific aspect. A skilled data analyst can craft a narrative utilizing the numerous clicks, visits, bounces, seconds elapsed, transformations, and other facts that they notice.
The data points can provide information about the amount of people who visited your website during a seven day period. For instance, maybe only half of them appreciated your website enough to pause for more than a few seconds. Maybe only half of the people who remained ended up making a purchase, while another 10% experienced difficulty at the cash register, became agitated, and went away.
This is the account of a collection of people who made varied decisions on your web store. This expertise can provide you with an advantage over your rivals. But it also can leave you with new questions. Is 50% good or bad? What is an acceptable length of time for a visitor to remain on a website, in terms of seconds or minutes? What percentage of the people who remain should I anticipate making a purchase? What could be the reason why the others aren’t purchasing?
You can’t alter the conclusion until you have all the facts. Once you comprehend the motives behind the behavior of website visitors, you can begin to make changes accordingly. The responses to the inquiries above differ significantly depending on the conditions, such as category, scale, sector, and state of progress, of the enterprise.
Once you become proficient in analyzing ecommerce data, you can make interpretations about it and enhance it based on the figures you are presented with.
Why ecommerce analytics are important
Let’s take a look at why it is vital for an ecommerce business to use marketing analytics, now that we understand what they are.
Understand marketing data
A marketing analytics program that is effective will hold all of your information in a single location. You can monitor every one of your campaigns, ranging from social media advertising to emails to marketing automation. You can view statistics in real-time, enabling you to figure out what strategies are most effective without delay and make more informed decisions with regard to where to allocate your marketing budget.
According to Craig Hewitt, the Chief Executive Officer of Castos, a podcast analytics software, using analytics provided by the software is a great way to help figure out how to maximize your marketing data for increasing business growth. Advertisers regularly possess a wealth of facts regarding their patrons, yet have difficulty employing it proficiently. Without analyzing data from an ecommerce platform, it will be hard to form a marketing plan that achieves consistent success.
By utilizing analytics, you can gauge the effectiveness of your marketing efforts, leading to smarter business decisions and a greater level of strategic thinking.
Uncover trends
Analytics platforms which are up-to-date take your data as one large web and help you discover emergent trends and regularities in your business. This enable you to comprehend how your business is currently functioning and what its prospects will be in the future.
To condense data and make it visible in a little time as possible, you can rely on marketing analytics to show:
- The number of visitors to your website by referrals and marketing campaigns
- The actions visitors take on your website over specific periods of time
- Most-visited pages during busy shopping seasons
- What devices people visit your store on
Use customer data
Brands can take advantage of the great benefit of marketing analytics by collecting, administering and utilizing customer information. Customers can perform certain activities in your store and your marketing analytics will record every interaction. Without the use of appropriate metrics and information relating to marketing, it is impossible to determine who is visiting your website.
Examining reports about expansion, fascination, and proceeds assists you in grasping consumer actions. It is possible to determine who has viewed your material and if they have gone as far as clicking, buying, or downloading anything, which allows you to generate content that resonates with them.
Craig says that marketing analytics can be used to effectively communicate to the appropriate audience at a suitable time with the necessary message. By taking a look at information that can be collected and using analytical tools, teams can gain understanding and knowledge about their target audience in order to maximize their communication. Brands can ensure their content is tailored to the needs of their audience, leading to an increase in participation which will in turn put them ahead of their rivals.
An illustration of this is if you observe that your shoes have had more success being marketed through an Instagram campaign with an urban street scene background than with a workplace background. In the future, you can target your items towards people who are interested in streetwear in order to entice the correct customers. A merchant might collaborate with more pertinent influencers or modify their ad targeting to create greater familiarity with their product.
Optimize pricing
The pricing of products has the most profound effect on levels of profitability. Studies reveal that it is possible for a company to up their margins by 2 to 7 percent within a year by implementing pricing management strategies, leading to a 200 to 350 percent return on investment (ROI).
You should find the best price that customers are willing to accept for each product. By using marketing analytics, it is possible to gain more insight into the relationship between cost and buying behavior for different groups of people. This will assist you in locating the highest possible prices for each item, so you can bring in the most amount of money.
Make your digital ecommerce analytics work for you
The majority of companies don’t go bankrupt due to lack of effort or commitment–rather, they suffer due to practicing activities which are inappropriate. It is essential to discern which facts are applicable to each growth stage in order to effectively alter the situation and produce a noteworthy effect on financial outcome.
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