Ecommerce and Retail • Neto
Ecommerce analytics tools are only as powerful as how we use them, and sometimes knowing which reports to run, when to run them, what the metrics mean, and then what to do with the information in the report is half the battle!
Neto Analytics Studio is an advanced retail and ecommerce analytics platform that pulls all of your data sources together in one place empowering business owners to make smarter decisions based on data, not assumption or guesswork (hallelujah!). And when we say all your data sources, we really mean all your data sources—advertising channels, website data, customer segments, products, inventory and more.
So perhaps you’ve started with Neto Analytics Studio but you’re not quite sure exactly where to start with reports. Or maybe you’re simply interested in how advanced ecommerce analytics can help your business more generally. To give you a helping hand, we’ve put together this list of 10 reports that cover all of the different areas of your business, giving you actionable insights that you can start using to save budget and increase revenues right away!
We also did a webinar all about running these Top 10 Reports, so if you’re in the mood to watch rather than read, then this one’s for you.
This report is the cornerstone of the life of an ecommerce store.
But firstly, what exactly is Lifetime Value?
Lifetime Value (LTV) or Customer Lifetime Value (CLV) represents the total amount of revenue you’ll gain from a customer during their lifetime with your store, which we calculate using the following formula:Average Order Value x Purchase Frequency = LTV
Research shows increasing retention rates and lifetime value can have a significant impact on your bottom line:
And what are the main goals of any ecommerce business? To make money and increase profits as time goes on, right? In order to do this
Retailers and marketers must be able to find customers who will spend money at their store, and then predict how much each customer is actually worth.
This is so that they can focus their efforts on the customers who will bring the most value to the table with upselling, cross-selling and other tactics. This will help them realise their ‘full potential’ from a Lifetime Value standpoint.
Here’s an example: A 30 year old Kleenex customer will have a much lower LTV than someone who is 80 as they’ve consumed less tissues in their 30 years of life. Kleenex needs to focus on both:
The Overall Store Lifetime Value report can help.
This report identifies which devices the highest paying customers are using to execute their purchases, which will inform your content and ads strategy. Run this report on a weekly basis understand which devices are catching the most revenue.
Here's an example: when cosmetics company Peach & Lily, saw their desktop, tablet and mobile channels growth rates were -3%, -4% and +105% respectively, they knew to shift their focus to mobile.
This report is the list of customers who you are ‘at risk’ of losing, indicated by the fact that they are 80% of the way through their Lapse Point. But what this also means is that you have one last real shot at retaining them as customers, by offering some type of incentive to win them back. Don’t let this opportunity go as it’s always cheaper to retain existing customers than attract or buy new ones.
Tip: It's better to hit these customers’ 100 times between now and the end of their Lapse Point than once every day for the next 100 days.
This report allows you to create action points based on product performance. The more SKUs you have, the more you have to optimise the way you’re using your material capital. Is there a product performing well in a specific channel like Paid Search or Social? Are there products not performing well or products that are being refunded dramatically for some reason?
Here's an example: a business that sells olives saw a product enter the "Most Refunded" product segment, which was their most profitable product - a blue cheese olive. It turned out there was a manufacturing issue where the jars weren’t sealing properly when they left the plant, and by running this report they got to the bottom of it immediately before they found out via customer complaints on social media or something crippling.
This report helps to identify where to spend your advertising budget. Run the report at the beginning of each month (or corresponding to the frequency with which you allocate your marketing budget.
Move your budget and efforts out of channels with lower LTV and place them where your LTV is higher, especially if the number of customers is relatively low. Also, note LTV based ROAS and the other metrics involved to allocate your advertising dollars at the beginning of each month.
This is your report card that analyses the performance of the marketing channels you allocated budget to at the start of the month. Once you’ve started making the right adjustments to your store with the Advertising Optimisation report, or you’re testing out different channels, you can run this report to find out exactly how you are doing. Note that it removes Cost of Goods Sold (COGS) and any advertising integrations.
Tip: if you don’t like what you see in this report, segment out your customers, obey your Lapse Point, make adjustments based on Lifetime Value and measure performance of decisions made based on Advertising Optimisation report with this one at the end of the month.
This report looks at the guts of your company via your Customers broken out by the number of purchases they made.
Look at the pie chart on this page, which shows your customers broken down by number of purchases. But first ask consider what type of retail business you have and what importance you assign to purchase frequency. For example, for a "One Purchase" company like a company that sells fridges, purchase frequency is less important than a retention-based like an apparel or cosmetics company, because how often do you need a new fridge?
If your retail business is high frequency type of business, then you want want the purchase frequency segments of two and more to be growing and the ‘one purchase’ piece to be getting smaller. You can look at this chart to identify where in the customer lifecycle you’re bottlenecking. Is it the first purchase? Or perhaps the third? How you can you overcome this?
This report will tell you if your next sales interval should be New Customer Acquisition-based (through advertising dollars) or Retention-based. Run this report monthly to understand what type of month it is. The bigger your at risk customer base is the more you will want to focus efforts on retention, to increase the LTV.
Here’s an example. Take the Queensland Rugby League team at State of Origin time; if they’ve just won the State of Origin and all the existing fans are already buying merchandise then there’s no point in marketing to this segment because they are already buying—it’s better to market to bandwagon fans to attract and convert new customers.
The best strategies come from looking at segment performance going after the highest paying customers. There is a so much data in customer segment performance, and being able to rank specific segments against each other will help you understand your strengths and weaknesses and how to compensate for those weaknesses.
Here’s an Example: After looking at their customer segments with this report, an audio-book company identified that they had only had a very small chunk of incredibly loyal customers along with the following insights:Their repeat purchase customer base was very strong They struggled to acquire first-purchase customers They had never had to discount
So they rolled out a referral program with the message; "Hey loyal customers, if you get a friend to sign up, we'll give you an audio book for free!" In this way, they overcame their biggest bottleneck (the first purchase) by tapping into their strongest segment (loyalty) to solve their weakness (the first purchase).
A simple strategy, but backed up with data to grow your business the best way.
This report essentially asks the question ‘How did you really do?’ on a weekly basis.
Critically, COGS and Advertising is removed from your revenue numbers here and is sure to create a few ah-ha moments.
And that’s it! If you’re keen to learn more about Neto Analytics Studio, check out our series of webinar tutorials or sign up to a free trial to Neto to test out how advanced analytics can help you save budget and convert more customers.