We're picking up from where we left off last week with Justin Williams, the newest member of the Bluespark team and SVP of Digital Commerce and Channels. I chatted with him about ways for brands to stand out and execute successful ecommerce. Justin had some really great things to say, so I’ve broken the interview into two phases. Last week was "Commerce Takeover: Micro-Moments, Personalized Content, and Influencers (Act 1)."
Here's the next question I asked Justin: What is that right data? So for example, in online retail, what are some of the most important KPIs that you think an organization should be tracking?
Want to chat with Justin? Email him here.
Conversion Rate
I'd definitely look at conversion rate, which is the percentage of your site's visitors who make a purchase. You can improve conversion rates by making it easier for customers to find what they're looking for. Again, that goes back to understanding the data behind how customers are purchasing and what they're buying.
You've got to use emotionally compelling text and images that are visually pleasing. Videos -- relevant videos, high definition videos, videos that capture the emotion of the moment and the consumer connects like, "Oh, I want that, it's cool."
A recent study found that 80% of millennials find videos helpful when researching a purchase online. Millennials are more content driven and digitally savvy, and they are in front of a screen a lot of the day. They do research. You've got to have content that captures the moment and engages the consumer. That's sort of the pre-cursor to conversions.
The next phase is making sure the checkout process is fast and easy, so the conversion can happen. You have to streamline everything and reduce the amount of steps that it takes a customer to browse and checkout. Make it frictionless.
Beyond that, get creative.
An interesting option is allowing customers to pay over time, like Dick's Sporting Goods or Amazon do with their credit cards. There's a company out there that's called Affirm, which has a great track record behind improving conversion rates, by allowing the customers to pay over time.
This is just one example.
But the closer you're paying attention to conversions, the more nimble and more focused you will get.
Website Traffic
To achieve conversions, you have to first have traffic.
One of the ways to really improve traffic is to focus on SEO and organic search results, social media traffic, and word of mouth. Pay attention to your analytics.
But you also have to commit to PR, content marketing, and relevant (and meaningful) outreach to existing customers.
And organizations have to be prepared to spend a little bit on money on paid campaigns. Whether that's on Facebook, LinkedIn, GoogleAds -- you have to spend some money to reach your customers where they are.
Shopping Cart Abandonment
The shopping cart is the key moment in every ecommerce journey. It's also what sets another customer journey apart from a commerce journey. Therefore, the shopping cart is a ... priority. To reduce shopping cart abandonment, you have to understand the customer journey and understand where the journey takes a wrong turn or hits a road block.
Testing is important in this situation.
For example, when studying a single quarter in 2016, more than 25% of U.S. online shoppers abandoned an order due to a "too long/complicated checkout process”. More than 60% did because of extra costs, like shipping and taxes, being too high.
If the checkout process is too long and complicated, that can be fixed. Same with better communication around extra costs.
But you have to know what your customers are doing to make the right changes. Shopping cart abandonment is a signal; testing is the research necessary to develop a solution.
Average Order Value
Average order value is a really important metric to watch. The reason for that is the AOV either goes up or goes down, and you can tell a lot by its movement. If you see that your average order value is actually going down, then your customer conversion or your shopping cart abandonment is typically following suit.
It can be a sign that other things are going wrong, like it's taking a user too many clicks to get to his/her desired product or your website load time is too slow.
RCR (Repeat Customer Rate)
The repeat customer rate is one of my favorites. If you've got more customers abandoning than coming back or a clientele that is all unique customers, there's a problem. If a company doesn't know their RCR, that's a major problem, too.
If they do know it, the majority of the time it's either going to be really good or it's going to be really bad. That's because customer segmentation and segmentation tracking are not easy things to do. You need the data and the time to determine what people are doing when they come to your site.
But, once you are aware of what your customers are doing and why they're returning (or not). you can prioritize customer service and loyalty programs. Both those focus on improving customer relationships and that's what you need when driving repeat business. It has to be authentic. Is has to be relevant. And it has to be personal.
For a useful resource, check out SmartFocus -- they help companies reach customers throughout the entire journey.
CLV (Customer Lifetime Value)
The customer lifetime value might be the most important metric to establish and track, in my opinion, because it's the very heart of a company.
It helps you make decisions about everything else -- marketing, customer service, product development, company growth, sales strategy, etc. It helps you know how much each customer's worth to the business, and where you should and shouldn't invest.
If you have data from each individual customer you can segment those customers out based on the amount of money they spend or spent. You can segment them based on whether they were a first time buyer, second time buyer, and third time buyer. If have a lot of people coming in as first time buyers, and they've spent a lot of money, but they don't come back the second time, something may have gone wrong.
For example, they had a poor user experience. Or, they found what they needed, bought it, and there was nothing offering them a reason to come back.
Or maybe they had a poor service experience.
They didn't like what they had, they called in, they couldn't get ahold of somebody, there was huge wait times. Your online chat support was down, and they just hated it, so they never came back. The second time, second repeat customers, it tells a different story. It says they had a good or great first time experience. But what is happening after that? What happens for someone to come back a third time?
The third time customer is a repeat buyer. That's a loyalist. You want the third time buyer, so you have to find out why they're back. Mostly likely, they like your product. But they may also agree with your values, relate to your culture, or enjoy the experience you're providing.
You have to find this stuff out.
You have to determine what's most important to your customers and how to add value for them in order to track -- and improve -- your CLV. It's not easy but it's worth the work.
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