How to understand marketing analytics for your Ecommerce store

Marketing analytics are used in the process of discovering and interpreting patterns in data. It plays an important role within the field of digital marketing. 

Businesses and organizations use marketing analytics to make better decisions to meet their clients’ preferences. By understanding the capabilities of marketing analytics, you can assess how it can benefit your business.

The goal of marketing analytics as a practice is to use these patterns and findings to optimize future campaigns based on what was successful. It benefits both marketers and consumers. 

This analysis allows marketers to achieve higher ROI on marketing investments by understanding what is successful in driving either conversions, brand awareness, or both. Analytics also ensures that consumers see a greater number of targeted, personalized ads that speak to their specific needs and interests, rather than mass communications that tend to annoy.

What is marketing analytics?

Marketing analytics is the practice of managing and studying metrics data in order to determine the ROI of marketing efforts like calls-to-action (CTAs), blog posts, channel performance, and thought leadership pieces, and to identify opportunities for improvement. By tracking and reporting on business performance data, diagnostic metrics, and leading indicator metrics, marketers will be able to provide answers to the analytics questions that are most vital to their stakeholders.

Moreover, Marketing analytics helps centralize and manage data. It provides invaluable data that can help drive growth. Enterprise marketers at first may find the process too complicated, while small and mid-sized business (SMB) marketers assume a company of their size won’t benefit from implementing metrics, but neither perception is true. As long as marketing analytics is carefully curated and properly implemented, the data collected can help a business of any size grow.

With proper marketing metrics and analytics in place, marketers can better understand big-picture marketing trends, determine which programs worked and why, monitor trends over time, thoroughly understand the ROI of each program, and forecast future results. With 78% of B2B marketing executives currently measuring the impact of their marketing programs on revenue, it’s clear that more businesses are getting on board with marketing analytics, even if they were a bit hesitant before.

Why are marketing analytics important?

Now that we know what marketing analytics are, let’s look at the most important reasons why an ecommerce business should leverage analytics.

1. Understand marketing data

A good marketing analytics software keeps all your data in one place. You can keep tabs on all your campaigns, from social ads to emails to marketing automations. You can also see real-time stats, so you can know what’s working quickly and make better decisions about where to put your marketing dollars. 

2. Uncover trends 

Modern marketing analytics platforms treat your data as an interconnected system, allowing you to uncover trends and patterns in your business. It gives you the ability to understand how your business is performing now and in the future. 

To condense data and make it visible in a little time as possible, you can rely on marketing analytics to show:

• The number of visitors to your website by referrals and marketing campaigns
• The actions visitors take on your website over specific periods of time
• Most-visited pages during busy shopping seasons
• What devices people visit your store on

3. Use customer data

The beauty of marketing analytics is that brands can collect, manage, and use customer data. Customers can take certain actions in your store and your marketing analytics will pick up each interaction. Without proper marketing analytics and reporting, you can’t figure out who is on your site. 

Growth, engagement, and revenue reports help you understand customer behaviors. You can easily find out who interacted with your content and if they clicked, bought, or downloaded something, so you can create content that resonates with them. 

4. Optimize pricing

How you price products is the most powerful lever to improve profitability. Research shows that price management initiatives can increase a company’s margins by 2% to 7% in 12 months, yielding an ROI between 200% and 350%. 

For every product, you should have an optimal price customers are willing to pay. With marketing analytics, you can better understand how price affects purchasing amongst different customer segments. It will help you discover the best price points at a product level, so you can maximize revenue. 

Components of marketing analytics 

Marketing analytics, a multifaceted practice used to drive ROI and improve future efforts, consists of:

• Centralized marketing database: Analytics require access to highly detailed marketing data, so marketers need to begin tracking this information now—preferably in one place. Required information will include historical data around when marketing programs ran, what their attributes were, who they touched, how much they cost, and so on. Without this information, analytics are essentially worthless.  
• Time series analytics: Unless an operational system stores historical data, a marketer cannot measure or understand marketing trends. Many marketing and sales solutions are operational and do not store historical information, requiring marketers who want to analyze their metrics for prior time periods to manually take data snapshots from their Excel spreadsheets. However, time series analytics gives marketers a full picture of their performance trends over time because the engine can analyze beyond point-in-time insight.
• Advanced attribution capacity: With marketing data in one place, marketers can understand what moves the needle and maximize return on marketing investment, but only if they have technology that facilitates attribution reporting. Many solutions only offer basic attribution capacity— most commonly, first or last touch attribution or multi-touch attribution limited by the type of channel or time horizon. This limits your ability to grow into the most illuminating attribution models down the line. Be sure to understand the attribution limitations of any technology you’re considering before you buy.
• Powerful and easy insights: Very few of the marketers who want and need to consume analytics data are business analysts. For such an audience, user-friendly dashboards are required, so marketers can explore data trends and gain insight into their programs without wasting time acquiring the expertise needed to maneuver the technology, build custom reports, and so forth. Just make sure your marketing automation solution offers tools that are both and powerful and simple to use!  
• Ad-hoc reporting and dashboards: On the other hand, marketing analytics experts will need the ability to delve deeply into the data and customize their ad-hoc reports. In this case, table-like reports and charts are most effective and allow analysts to “follow the scent” of particular insights as far as they need to go.

Advantages of marketing analytics

There are several advantages of implementing marketing analytics in your business, including:

1. Better decisions about branding

Data about your audience and your existing marketing campaigns can reveal better ways to brand your business. For example, during your analysis, you could discover that your customers prioritize reliability over cost. You then use this information to modify your brand’s image, promoting your product as the most reliable option rather than the most affordable.

2. Better decisions about product updates

Through marketing analytics, you can learn how to improve your current products. You can identify which products your customers talk about most, which ones receive the best feedback, the improvements your customers want and which of your competitors’ products are performing the best.

3. Better customer service

It is easier to serve your customers when you know more about them. With marketing analytics, you can figure out which customer issues are the most common. From this, you can better prepare your customer service team while simultaneously working to resolve the issues.

Another example is product recommendations. If your marketing analysis reveals that online shoppers frequently buy two of your products together, you can use this information when a customer is about to buy one of the products by automating a suggestion that they add the other one.

Disadvantages of marketing analytics

To get the most out of your marketing analytics, it’s also helpful to know which challenges you might encounter:

1. Too much data

A common issue in marketing analytics is a surplus of incoming data, so you’ll need to identify which information is most relevant. More data requires more time to sort, so there may be delays in results. To handle this, start by collecting a small amount of data, then build up a little at a time as you need more.

2. Requires the right people

Properly analyzing marketing data requires training and education. If someone on your team does not have marketing analytics expertise, it’s advisable to bring in someone who does. This typically means expanding your team by hiring a specialist, so you may wish to allocate a budget for this expense.

3. Hard to compare online and offline data

To make meaningful decisions from your data, you need to compare different categories of data against one another. Comparing data across channels can present a challenge if some of your channels are online and others are offline. For example, in trying to compare website visits with a direct mail campaign, your data scientist needs to have a comparison method that accounts for the significant differences in their deliveries and potential audiences.

Important concepts within marketing analytics

Certain concepts within marketing analytics can be critical to maximizing marketing efforts and resources. These important concepts within marketing analytics can mean the difference between an average marketing team and one that truly excels in research, planning, and execution.

• Customer lifetime value (LTV): Marketing departments can use predictive analytics to determine the customer’s lifetime value to the company based on past purchases, purchase frequency, and average customer lifespan. This allows marketing departments to make predictions about future ROI and customer engagement. 
• Return on investment (ROI): In marketing terms, analyzing ROI refers to the amount of profit or revenue growth that can be attributed to marketing activities. Capturing this marketing ROI data gives companies another metric for marketing teams’ success. 
• Cost per lead: To determine how cost-effective a marketing campaign is, a marketing department must understand the cost per lead data. Also, Cost per lead refers to the average cost for generating a new lead. Cost per lead can be used to help calculate the marketing ROI. 
• Lead-to-customer conversion rate: Another metric marketing analytics can help measure is the lead-to-customer conversion rate or the percentage of leads that resulted in sales. This type of data can help direct marketing departments to increase marketing that generates specific types of leads that are proving most successful in converting to sales.

What actions can you take based on analytics?

Marketing departments can take an almost unlimited number of actions based on marketing analytics, but this is a selection of some of the more common options:

• Incorporate keywords: Marketers can use keyword analytics software to determine the specific words and phrases they need to optimize in order to gain organic traffic through web searches.
• Replicate successful campaigns: Social media analytics (there are often basic versions built into each platform) can give marketing departments an understanding of what types of content or topics resonate with followers and result in traffic to the website or newsletter sign-ups. Marketers can then increase that type of content to increase traffic.
• Engage new markets: Marketing departments can engage with a new segment of the market or launch a campaign that targets a different demographic if analytics show prospective customers in those areas. 
• Optimize CRM: Marketers can also address bottlenecks in customer relationship management, as marketing analytics are included in those platforms to help assess funnel and churn. 
• Adjust product fit: Because marketing departments can access behavioral, purchase history, and website journey data for customer bases, they can better predict customers’ needs and purchase preferences.

Marketing departments have a range of marketing analytics tools and software at their fingertips. They should be using as many of those as are appropriate to improve marketing activities and plans every day.

5 methods to analyze your marketing program

Having a strategic marketing analytics program means knowing which data points to monitor and which detract from your ultimate goal of demonstrating ROI. While this will take more work up front, it will—in the long run—make analysis a much simpler process. 

Method 1: Single attribution (first touch/last touch) – Single attribution is one of the most common marketing analytics strategies. This strategy allocates all of the value to either the first or last interaction with the prospect before buying. First-touch attribution credits the lead generation strategy with the eventual sale regardless of when the sale happens. For instance, if an SEO-optimized landing page draws in a new lead from a web search who later consumes branded content, engages on social media, then attends a trade show before becoming a customer, first touch attribution assigns the value of that sale to the SEO campaign. Last-touch attribution credits the final communication with the close of new business. In the example above, the trade show would be credited with the sale since it was the last interaction the lead had before purchasing. 

Method 2: Single attribution with revenue cycle projections – Single-attribution strategies are simple, but that simplicity can lead to disadvantages. Brands with longer buying cycles need to account for that period of time as well as all of the lead nurturing that happens in between in order to create an accurate picture of the quality of current marketing efforts. Adding revenue cycle projections to a first-touch/single-attribution analytics strategy can solve this problem. Revenue cycle projects use complete data from previous campaigns to project the eventual outcome of recent and similar marketing efforts. 

Method 3: Attribution across multiple programs and people – Attribution across multiple programs and people views credit more holistically. You recognize that no single marketing effort is responsible for a sale, and you try to determine the value of each touch by starting with the action that created a sale and working backwards. Once every touch has been identified, you then determine how to weigh each one so that their values can be properly assessed. Some assumptions are necessary for this method, and that’s okay. Just make sure you are prepared to defend them to the C-suite, or you may risk invalidating the whole process.

Method 4: Test and control groups – Test and control groups are a great way to measure the actual—rather than the projected or assumed—impact of a marketing campaign on your target audience. And in theory, it’s as easy as your middle school science fair experiment. Using test and control groups requires a little extra strategy from the start, since you have to plan a program you can test. The goal is to apply the factor you want to measure to one part of your target market. So, make sure you divide your audience into two groups that match up on other basic metrics.

Method 5: Full marketing mix modeling (MMM) – Marketing mix modeling demonstrates how each unique marketing touch, as well as non-marketing variables, impacts sales volume. Statistical techniques create complex equations that can take into account an infinite number of factors, including advertising, distribution, economic conditions, pricing, and product. To be effective, this model requires a lot of data. So much so that most marketers find that MMM consumes too much time and energy. This explains why only 3% of B2B marketers use it.

Wrap up

Marketing analytics provides insights that allows a marketing team to work more efficiently and to have a bigger impact on the business. With the right marketing analytics, you can accurately forecast results and measure the progress of each marketing activity against defined milestones. You’ll be able to optimize your marketing in real time, accurately plan out your future marketing long-term, and overall, frame, justify, grow, and defend all your marketing activities and budgets