Analytics & Data

3 Ways Customer Data Drives Ecommerce Conversions

Data is important to ecommerce businesses. But many merchants are not sure how to use it — to collect, analyze, and make meaningful changes to their business. The key ecommerce data is easy to obtain, however. It comes from customers.

In this post, I’ll review how to apply basic customer metrics to improve your ecommerce conversions.

3 Types of Customer Data

Geographic information. Obtain the physical location of your customers from shipping or billing information. Google Analytics can provide the location of website visitors, not just customers. If necessary, break down the data by city and state, urban vs. rural, and international vs. country.

From there, focus on promising regions, those that are growing or are otherwise suited for your products. Analyze seasonal trends by region. For example, if your key markets are Colorado, Washington, and Oregon, visitors in nearby states — California, Montana, Utah — could be good prospects.

Demographics. Demographic information includes household income, age, gender, occupation, educational level, and marital status. The type of demographics to focus on depends on your business. Collect demographic data from:

  • Customer surveys. The downside of surveys is the response rate could be small, and it could annoy your customers.
  • Purchasing from third parties. You can purchase demographic data from third parties such as Equifax, Experian, and TowerData. Merchants with 1,000 or fewer records may encounter difficulties, however, as the providers tend to prefer larger clients.
  • Social media. Utilize Facebook, Twitter, Instagram, and other social media sources to try to populate the data yourself. Go to the public profile of a customer to see information such as gender and age. Also, Facebook has reporting on your followers.

Once you understand the demographics of your target audience, apply them to your marketing initiatives. For example, if 90 percent of your customers are married with children, your content strategy should address family life. Photos on your websites should be of your target market. Ads should focus only on that demographic.

Alternatively, if you do not want to spend time and money acquiring and analyzing demographic data, consider using Facebook’s lookalike ad program, wherein you upload your customer email list and Facebook would display your ads to similar users. Facebook would analyze for you, in other words.

Purchase history. Analyze the purchase histories to identify high- and low-value customers.

To do this, take the average purchase per customer in the last 12 months. Establish a median across all customers. Rank each one into high value and low value — above or below the median. Add this data to your customer-management platform or in a simple Excel spreadsheet. Then use it to:

  • Identify the geolocation and demographics of your high- and low-value customers. For marketing, focus on high-value prospects.
  • Analyze what high-value customers purchase. Identify products that they consider complementary and bundle and present those items to low-value customers.
  • Run different promotions for high- and low-value customers.
  • Establish a loyalty program based on the median value. For example, if the average customer spends $250 per year, offer a 5 percent discount for customers who purchase more than that amount.

What Counts

Regardless of the amount of data that you have or how many years you have been in business, looking at your customers by geography, demographics, and purchase history can provide insights to act on. What counts is not how much data you have, but what you do with it.

Anna Kayfitz
Anna Kayfitz
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