Analytics plays a key role in business. Even more so in the digital commerce sphere where it is easy to measure and collate data.
The main thing about data analytics is that it should guide your decision making and strategy.
It is very important to pick out core metrics. Follow their pattern month after month. Ensure that the figures move continually in the right direction.
Google Data and IRP Data
Google Analytics is by far the biggest name in web analytics in the small to mid market. They are not the only provider in this area but they are by far the provider with more market penetration. The service acts often as the centre point for analytics on overall web activity.
However, it is important to realise that you need to augment Google’s information with other data that Google Analytics does not have.
Google Analytics is strong on general web information. However it is weaker on individual product data information such as best sellers, trending sales, product margins and so forth. Google does not have the same level of product information that is available in the IRP.
Where Analytics Data Comes From
There are several sources of analytics data. All of these provide useful information that you can use to develop your business strategy.
1. Analytics from Google about Overall Site Usage
Google provides its Analytics service for free. However, while Google is a friend, it is a friend with a self interest in the relationship.
It’s the same with all third-party tracking. By adding services such as Google tracking you are getting information but you are also giving information to Google about your business and your market. This information is valuable and Google use it themselves.
Ensure that you set up all the available Google Analytics tracking that you need. Include ecommerce tracking and AdWords tracking.
Understanding Google Analytics is a core skill. You need to have this skill in your ecommerce team and you need to set up Google Analytics correctly.
As you are interested in how customers use your site, ensure that you exclude data that could corrupt this, for example your own usage of the site. Excluding IP addresses that you don’t want to track is a basic step towards getting a clean dataset.
You should then use Google for reporting long-term on all of your key statistics. Set it up with alerts about changes that could occur. Use it to report each month to your stakeholders. The reports should be read and understood at board level.
2. Analytics from the IRP about Sales, Stock and Other Reports
The IRP has good reporting functionality. For example:
- In the Statistics section, reports are based mainly around products and how they are selling. You can break down your sales into basic charts.
- In the Stock Control section you can focus on the stock elements of reporting.
- In the Programming Utilities section you can write bespoke reports. You can export the data into MS Excel for further analysis.
Focus your IRP reporting and analytics more on the product side. Doing this can inform you about trends on the sale of individual products or groups of products.
You can find some data only through the IRP so it is important to filter what is required and include this information in your monthly reports.
3. Analytics from Digital Marketing Channels
Google Analytics provides great information about how a website is used and about which marketing channels are driving the traffic. However most of the digital marketing channels will provide additional information.
For example, if you are using Facebook Advertising, Facebook will provide extra information about how the marketing is operating.
Pay Per Click is also a channel where a huge amount of additional information is available in the administration section of that channel.
You need to understand these additional metrics and incorporate them into your overall strategy. These could be statistics that are specific to just one channel.
4. Analytics from Market Data Tools for Comparison
Although Google Analytics and the IRP provide very useful information, they do not supply that information in the context of the market that you are operating in.
For example, they do not provide information on:
- How you compare with your competition in terms of market size;
- What products and search terms are trending in the marketplace;
- Pricing on products versus the competition;
- Other useful comparative statistics.
This information is important so that you can keep on top of where your market is going and how you compare to the competition.
Some online tools that are popular in this area are Alexa, Hitwise, SEMrush, Google Trends, Competitor Price Watch (or similar).
All of these analytical tools help you optimise your digital strategy and provide the big picture view.
5) Analytics from Other Third-Party Tools
New third-party analytics software tools are appearing in the market regularly. Some companies use these as they just need to add a script to the IRP.
However, it could be said that your time is best spent just using the main tools.
What do you do with all the Analytics Information?
The important thing is that you interpret the data correctly so that it informs:
- The day-to-day operations of your business;
- The monthly reporting about your business;
- The strategy and future direction of your business.
Try to follow these guidelines:
- React quickly
Your day-to-day operations should react quickly to trends. You should constantly be trying to identify things in the analytics data that you can use to increase sales.
It is important to react fast because online markets move fast; establishing yourself in the market quickly is key to profitability.
Getting in quickly to fill a gap ensures that you maximise an opportunity. It also means that your competition may not know the extent of that opportunity because you are the main beneficiary of it.
- Report monthly
Monthly reporting is vital. All main stakeholders should assemble, monitor and discuss the metrics on a monthly basis. Focus the metrics on the most important numbers, including costs and sales.
Everything in the end is centred on the CPA%: that is the key metric in ecommerce.
- Base your strategy on the data
It is essential to have a strategy. Base the strategy on the analytics data.
The numbers themselves suggest what action you should take. Review the actions to see if they have improved the metrics, then repeat this process to grow the business.