Convert More Ecommerce Customers with Data-Driven Marketing Decisions

E-commerce is a numbers game. The companies that win are the ones who make decisions based on data, not gut feelings. After all, facts  don't lie, but intuition often leads us astray. Data-driven strategies allow e-commerce businesses to understand customers, optimize sites, identify opportunities, and make smart investments for growth. 

In this article, we'll explore why eCommerce businesses need to take a data-driven approach. You'll learn where to source quality data and how to extract actionable insights and key data-driven marketing strategies. It's the perfect introduction to a platform like Varos, which puts the power of data into your hands. Let's dive in!

The Power of Ecommerce Data 

Most brands are still just scratching the surface of the data goldmine at their fingertips. At its core, analytics shine a light on how shoppers behave – who they are, what they want, and how to deliver it. Data enables personalized site experiences so visitors feel like you "get them." It exposes painful points in buying journeys to remove frustration. 

Most importantly, data reduces risk around big spending choices. Numbers help estimate returns before investments happen. They show which efforts actually spark growth so brands can double down confidently. 

With customer analytics, brands can build personalized experiences, improve site design, spot new opportunities, and shift approaches when needed. Relying solely on gut feelings is far riskier than letting data guide strategy.

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Why Ecommerce Data Matters

Data serves as the compass pointing ecommerce brands toward sustainable growth. It eliminates guesswork by showing what's working well, where there's room for improvement, and where to allocate time and money next.

Enables Personalized Marketing 

Did you know personalized marketing drives 10-15% higher revenue on average, according to McKinsey? Customer data lays the foundation for tailored experiences. It facilitates segmentation so you can serve different offers to different audiences in the right channels.

Know someone's preferences and past purchases, and you can show their preferred payment methods or remind them of items left in their cart. Understand customer lifecycles, and you can tempt long-term customers coming up on churn with relevant upsell offers. 

Recent big spenders on high-margin products might respond well to VIP loyalty perks, for instance. While new, one-time bulk purchasers need different messaging to come back. Granular data spotlights what incentives work for each cluster and individual. Over time, experiences can become truly custom as data accumulates.

Optimizes Site Experience

Data reveals how shoppers interact with your site. Identifying which elements delight versus frustrate visitors is impossible without observing user journeys. Analytics spotlight exactly how people navigate from landing pages through checkout funnels. This intelligence calls out confusing layouts, complex payment flows, and buggy pages, all of which contribute to losing customers.

Armed with precise pain points, you can streamline site navigation and simplify buying experiences for smoother funnels. The result? Happier customers who buy more thanks to UX informed by data.

Identifies Growth Opportunities 

How do you know which business changes will pay off? Data reduces decision risk by estimating returns before investments happen. If you're considering a new product line, analytics help gauge demand to size the potential. 

You can then double down on what's working and course-correct underperformers. Let the data guide you toward high-ROI opportunities so you can invest confidently. 

Informs Business Decisions

Ecommerce forces constant decision-making. There are always potential pivots to spot and threats to dodge. Data offers insights on moves like:

• Would a rebrand help or hurt growth?
• Handle logistics in-house or outsource to a 3PL?
• Is advertising still driving enough sales to justify spending?

Relying on intuition leads to intelligent choices sometimes but unnecessary disruption in others. Data analysis weighs ideas beforehand to minimize missteps. Facts and figures reveal market realities that experience and hunches often miss.

Sources of Ecommerce Data 

Data-driven decisions are only as good as the data behind them. Ecommerce brands need high-quality, structured data that accurately reflects their vertical. 

Internal data from your ecommerce platform and Google Analytics offers a wealth of first-party intelligence across dimensions like:

• Marketing and advertising analytics
• Customer feedback and surveys 
• Sales transactions and order data
• Inventory and operations stats

External Benchmark Data 

Together, internal data quantifies business health KPIs. Yet, it lacks competitive context to gauge what's "good." External benchmark data from companies like Varos fills this gap.

With data points across thousands of companies, you can filter by business model, average order value, location, and more for an apples-to-apples comparison. If your mobile conversion rate lags behind industry standards, you can focus on improving your mobile experience. If email marketing provides better returns than display ads, you can shift the budget to the higher ROI channel. 

Benchmarking against organized competitor data helps reveal underperformance and new opportunities.

How to Use E-commerce Data for Insights

Okay, you've aggregated robust internal and external data. Now what? It's time to extract insights to drive your data-driven growth strategy.

Identifying Key Performance Indicators

Start by determining the eCommerce KPIs most critical for your growth goals. For most ecommerce brands, key metrics include:

• Average Revenue Per User 
• Conversion rate
• Repeat purchase rate 
• Average order value 
• Customer lifetime value
• Customer acquisition cost
• Cart abandonment rate
• And more.

Visualizing Data Trends and Patterns 

Use charts, graphs, and dashboards to quickly spot trends and anomalies. Compare time-period performance and break down metrics in different ways. Visuals make complex data digestible. 

Asking the Right Questions

Frame questions to pull insights from the data, like: Where are sales falling short? Which products have the best/worst conversion rate? How can we increase order values? What's driving cart abandonment? The data holds answers, but only if you ask the right questions.

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Key Data-Driven Strategies for E-commerce Growth

Now, let's explore some of the top ways e-commerce businesses turn insights into explosive growth and profits.

Optimizing Site Content and User Experience 

Give customers a seamless, frustration-free journey using behavioral data. By identifying on-site friction points, you can refine content and page flows to reduce cart abandonment. Analyze search terms, heatmaps, and clickstream data to see where people navigate. 

Then, redesign pages to drive desired actions. You can also A/B test elements like page layouts, images, calls-to-action, trust symbols, and more. 

Personalizing Customer Interactions 

Serve each visitor tailored content catered to their interests using behavioral segmentation. Target key groups with messaging matched to their needs. And send campaigns based on where shoppers are in their lifecycle.

Personalized emails with dynamic content and products in relevant categories are the best way to improve performance, according to HubSpot. It is also the top personalization tactic used by marketing teams. Similarly, personalized, on-site experiences lift conversions.

Forecasting Demand and Planning Inventory 

Carefully predict demand using historical sales data and external signals. Then, optimize inventory accordingly. For example, proactively notify customers about low stock to minimize lost sales. Accurate demand forecasting helps control out-of-stock risks and maximize conversions.

Optimizing Pricing and Promotions 

Another tip is to entice customers to buy more and come back for repeat purchases by leveraging data. Benchmark pricing against competitors to ensure you are not leaving money on the table. Test different price levels through A/B experiments to find the sweet spot balancing customer acquisition costs and profit per order. 

You can also boost order values by cross-selling complementary items. Focus promotions on key segments identified through data analysis. For instance, target high lifetime value customers to incentivize repeat purchases. Effective pricing and promotions optimization drive sustained revenue growth over time.

Optimizing Campaigns and Ads

Next up, we have ROAS improvements with data-driven decision-making. Double down on high-ROI initiatives and weed out poor performers. Evaluate performance data across campaigns and ad groups. You will spot low-ROI areas not pulling their weight. 

Then, shift the budget to campaigns, keywords, and creatives with the highest returns. In most cases, it's worth it to kill off initiatives not worth their cost.

Monitoring Business Health 

Finally, keep a pulse on the metrics that matter most using dashboards. Continuously track revenue, costs, profit margins, and other vital signs. In a similar vein, you can spot adverse trends and anomalies early before they spiral. 

Guide budget decisions by allocating resources to business areas with the highest ROI.

Challenges and Considerations in Data-Driven E-commerce

Data helps your business see what naked eyes miss – opportunities hiding in customer trends. Analytics spotlight what delights shoppers, where journeys struggle, and which messages motivate them. 

Yet, while powerful, a data-driven growth strategy also comes with challenges:

Getting Quality Data 

Compiling accurate, structured data from across systems and touchpoints is easier said than done. To get reliable insights, data must be integrated from multiple sources, then cleaned, standardized, and deduplicated.

Also, try to focus on a few critical metrics instead of getting overwhelmed by noise. Avoid analysis paralysis by concentrating on the stats that matter most, given your goals. 

Making Unbiased, Ethical Decisions 

Apply data judiciously. Avoid intrusive hyper-personalization that could backfire. Use data responsibly to protect consumer privacy and build trust. 

Blending Data With Intuition 

Data shows what is happening, but human judgment is still vital in determining why and what to do next. The best ecommerce leaders blend data, business acumen, vision, and intuition. 

Data informs human decisions rather than replacing them. Let it guide, not override.

Use Varos For Your Data-Driven Marketing Strategy

Business intelligence addresses all the opportunities and challenges explored above, driving improved ecommerce performance. 

Varos integrates first-party data from 5,000+ companies and $6 billion in ad spend. Benchmark performance by category, budget, location, and more to see where you truly stand. Then, course-correct problems through tailored insights. 

Want to leverage Varos for unmatched competitive intelligence? Request a demo today!

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About the Author

Yarden Shaked

Co-founder & CEO at Varos

LinkedIn