Using data to grow and improve your business model and sales is no longer just a cool way to beat the competition; businesses need metrics to survive. While it is possible to increase sales and grow your brand organically, it takes time.
Data can produce valuable business insights that can help companies of all sizes thrive online, despite the ever-increasing competition. Retailers can and should capitalize on data by collecting, managing, and analyzing it to use toward future marketing initiatives.
Here are six reasons why you need data to make any kind of impact on the internet.
1. You’re Missing Out on Sales
If you want to leave money on the table, neglect your data.
Seriously. Unless your satisfied making the bare minimum, you should dive deep into your data rather than just scratching the surface.
There are SO many ways to compile valuable bits of data about your business and your buyers. From tracking your search engine optimization strategies with keyword tools to measuring your click-through rate from your email marketing analytics, to scrutinizing your product performance and sales funnel in Google Analytics and beyond. There is an insane amount of information that can help any business drive more sales than they could ever imagine.
The simplest string of data could indicate exactly why someone bounced instead of making a purchase, help you learn more about your audience and their behaviors, and ultimately teach you to decipher new ways to gain buyers that were previously just out of your reach.
2. Potential Customers are Slipping Through the Cracks
You may think you know your audience, but your data could tell you otherwise.
A close look at your customer demographics may show you that your most significant pool of buyers is not 25 to 34-year-old women, but 45 to 54-year-old woman, with the former falling second.
All this time you were focused on putting ad dollars toward a smaller demographic when you could have been splitting it between two very different age groups with surprisingly similar buyer behavior.
Ignoring customer data is a huge no-no. You must determine who your ideal customer is to target that audience specifically. When you know what demographic you should be focusing on, you can modify your efforts to accommodate their habits, desires, and needs.
If there is an entire age group that wants what you have but doesn’t know you have it yet, why wouldn’t you reach out to them? Increase awareness to the right people.
3. You Don’t Know Your Customers’ Needs as Well as You Could
The more you understand your audience, the more you can offer them, and the more you can earn.
For example, let’s say that you sell resources to teachers online. Your metrics are telling you that 85% of your customers are spending $20 or more per transaction on materials related to elementary school, versus the 15% who are spending an average of $10 per transaction on middle school materials. Now, are you going to create more elementary school products or more middle school?
What this data tells us is that most of your buyers are elementary school teachers or administrators and that at this point, they are willing to purchase more of your inventory than their middle school counterparts. Whether this is because your elementary product selection is more vast, or because this demographic requires more resources… it is clear who your target should be.
Using this data, you, as an e-commerce seller, can create more elementary resources to better serve your customers. Metrics allow you to identify opportunities for growth and improvement within your existing customer base, with the goal of encouraging them to come back and spend more.
4. Most Customers Already Know What They Want
These days, 81% shoppers research online before making a purchase, and 60% start their research on a search engine before going to a specific website. Knowing this, businesses should strategize with the ‘intentional shopper’ in mind, not just the ‘potential shopper.’
There are several stages in a sales funnel, or buying cycle, and big data can help any online business target shoppers who are in the final two stages, ‘consideration’ or ‘purchase.’
Keyword research can produce an immense amount of data that can help digital marketers and business owners target customers who already know what they want and are either looking for more information or are just about ready to buy.
5. Your Paid Advertisements Aren’t Well-Optimized
Perhaps one of the most important reasons businesses need data is for ad optimization. Placing ads on Google, Facebook, and other outlets allows you to pay to get your content in front of the exact demographic you want.
However, as we alluded to in #2, we may not always know who the best customer is for our business and where to find them. Placing ads is the perfect way to gain and measure customer-focused data.
With the right marketing budget, you can quickly see exactly who you spent the most money on, what demographic had the highest click-through rates, which ad designs converted the most, what keywords brought consumers to you, and which ad set will cost you the least amount of money for the most return.
Once you figure out what works (and more importantly, what doesn’t), you can use that data to focus on buyer intent – decreasing the risk, scaling your marketing campaign to improve your conversion rates, and driving the results you want.
With data analysis and proper optimization, you won’t waste your marketing dollars. Spending blindly is a very quick way to run on empty. And trust us, if you aren’t paying careful attention, it can happen fast.
6. You’re Focusing on the Wrong Platforms
Data can help you figure out where your customers are coming from, and which platforms are producing the most traffic and sales.
Google Analytics offers an endless supply of information about how your audience landed on your site, how long they stayed, and what they did (whether they clicked around, signed up for an email list, made a purchase, or quickly bounced their way out of there).
A simple look at this data can tell you what percentage of your traffic is arriving through search engines, paid or organic, from social media platforms, or directly. In fact, you can narrow down your results to find the exact link someone clicked to land on your page.
The Source/Medium metric is incredibly valuable to business owners because it can help you understand which platform you should focus the most attention on, which has potential with a little TLC, and which is not worth your time and money.
For example, you may find that a whopping 78% of your traffic arrives from social media. Navigating to Network Referrals will allow you to see how that chunk of gold is split up by social network. You may find that 65% of that traffic comes from Pinterest, 30% comes from Facebook, and a tiny 5% comes from Twitter.
This would indicate that you should continue to focus your attention on Pinterest, spending some of your marketing budget on Pinterest Ads, that Facebook has the potential to continue contributing a significant amount of traffic with some extra efforts (30% is nothing to snuff at!), but that Twitter may not be worth your time at this stage.
If you are a business owner looking to thrive online, do yourself a favor and dedicate some resources to understanding your data!