chapter 5

Analytics | Becoming a Strategic Advisor on Client Data

As freelancers, we’re all pursuing the Holy Grail of “repeat business”. Many of us aim to build retainer relationships with our clients to help diversify and secure revenue streams. Building this additional revenue, however, is not about getting clients to purchase a certain number of billable hours per month. It’s about finding ways to continue driving value for our clients. It’s shifting from being reactive tactical executors to proactive strategic advisors. It’s ceasing to explain project costs and starting to demonstrate project ROI. It’s not a monthly dump of data via some spreadsheet, infographic or PDF; it’s about making informed recommendations that clients can pursue to grow their business.

So how do we, as designers, developers, and marketers, begin to master the world of analytics to shepherd our clients through growth? How do we incorporate the use of analytics into our service offerings to help drive repeat business? Answer: We shift our service offerings from Projects (engagements that are cost-driven and stem from client requests) to Initiatives (engagements that are ROI-driven and stem from our analytics insights).

In the world of ecommerce, I’ve found that these areas of analytics lead to the most opportunities for growth: business analytics, customer analytics, website analytics, and campaign analytics. In this article, I’ll define each of these four areas and suggest a handful of analytics- supported initiatives that you should consider offering your clients.

1. Business analytics

Business analytics focus on measuring the overall performance of your client’s business. This includes metrics that determine the company's health, growth, and opportunities for improvement. Potential initiatives you could pursue with your clients include:

Shifting from annual goals to daily Key Performance Indicators

Most businesses have some sort of lofty, long-term goal. Often it’s a revenue target for the year. The challenge with long-term goal planning is that achieving these goals often seems distant and unattainable. To frame these goals and measure progress on a more incremental basis, use Key Performance Indicators (KPIs) to determine whether your client is “on track” for success.

One initiative worth considering is some sort of workshop with your client where you run through their annual goals and identify daily or weekly KPIs worth tracking. For example, let’s say they want to add another $365,000 in revenue for the year. On a daily basis, that’s only an additional $1,000 of revenue. If they had an average order value of $100, then their KPI is 10 new sales per day. You can then work with your client to build the necessary reporting tools to track this as seamlessly as possible. Then their entire decision-making process as a business can focus on hitting that daily KPI.

Integrating financial reporting with ecommerce

Of all the different types of data available, financial metrics are the most fundamental to understanding the health of any business. Tracking profitability, cash flow, and general financial trends should be the first priority in your analytics strategy.

Luckily for many ecommerce companies, most of the necessary data lives in their shopping cart platform, such as Shopify, and simply needs to be ported into their accounting platform, such as QuickBooks. Consider working with your client to install an app, or build an integration between their shopping cart and accounting system. In addition, ensure that proper tax reporting, with a platform such as Avalara, is either part of that integration or bolted on as well. That way, your client can monitor the pulse of their business’s financial health in real-time.

Integrating inventory reporting with ecommerce

Effective inventory management is a huge profit driver. Beyond just tracking what’s in stock and not in stock, it allows you to understand inventory turnover (i.e. how quickly things are sold), and use that data to accurately forecast what should be re-purchased and what should be liquidated. Consider working with your client to install an app or build an integration between their shopping cart and an advanced inventory management system such as Stitch. Third-party platforms that specialize in inventory forecasting can help provide your clients vital insights into purchasing decisions. The benefit is often free cash from optimizing inventory investments and minimizing order delays for popular products.

2. Customer analytics

Customer Analytics focus on measuring customer behaviour in relation to your client’s brand. This includes building a deeper understanding of those customers and using that understanding to improve their overall experience. Potential initiatives you could pursue with your clients include:

Building a centralized customer hub

A customer hub is a platform your clients can use to build richer profiles of their customers. This platform would aggregate data from their shopping cart, email marketing platform, support platform, etc.
to build a detailed picture for each individual customer. You can work with your client to identify and integrate a potential customer hub, such as Lumiary, so they can begin building a better understanding of their customers. The benefit is their ability to tailor their marketing and products based on the deeper understanding they gain of their customers.

Segmenting customers to personalize marketing

Once your client has established a customer hub, they can begin analyzing customers across the board and identifying potential patterns or groups, otherwise known as segments. Segments include things such as “customers who have spent more than $1,000,” “customers who have purchased in the last 30 days,” “customers who live in Boston,” etc. One initiative worth considering is some sort of workshop (or monthly meeting) with your client to analyze patterns and identify these segments. Once these segments are identified, you and your client can begin to personalize marketing and messaging. The benefit is improved overall marketing performance and a better experience for your client’s customers.

Calculating gross profit per visitor

In an effort to simplify the multitude of metrics associated with customers (i.e. bounce rate, conversion rate, etc.), we often look at the gross profit per visitor (GP/V) as the leading metric for marketing performance analysis.

Put into a formula,

GP/V= (Visitors ✕ Conversion Rate ✕ Average Order Size ✕ Profit Margin) / Visitors

Let’s say your client averages 10,000 monthly visitors, with a 2% conversion rate, $100 order size, and a 60% gross margin. This results in $12,000 gross profit on a monthly basis, and a $1.20 GP/V. With this metric, you now know that you can spend up to $1.20 for each visitor and still make money. Help your clients track GP/V by configuring their Google Analytics to calculate this metric right within their dashboard. That way, your client will have a clear metric they can use when evaluating marketing investments that’s easily attainable right through Google Analytics.

3. Website analytics

Website Analytics focus on measuring the performance of your client’s website. This includes metrics that determine customer behavior during their visit to a website. Potential initiatives you could pursue with your clients include:

Configuring goal tracking for primary and secondary goals

The number one goal for all ecommerce companies is getting a customer to place an order. But as much as we all want that to happen, not all customers are ready to make a purchase when they visit a client’s website. As such, we want to provide opportunities to get customers in our client’s “marketing funnel” by getting them to subscribe to email newsletters or follow your client on social media. It’s important to track both primary goals (i.e. product purchases) and secondary goals (i.e. email subscriptions, form completions, etc.), so our clients can measure effectiveness across all interactions with their customers. Once again, you can configure Google Analytics goal tracking for your client’s primary sales (through the built-in ecommerce integration setting) and secondary marketing goals. Then, you and your client can determine marketing effectiveness even if the result is not an immediate end-purchase.

Configuring A/B testing to measure improvements

As professional designers, we often rely on our intuition when it comes to making design decisions. Unfortunately, clients don’t always feel as confident as we do in our gut decisions. Luckily, we can utilize our new- found friend, Mr. Analytics, to help measure the effectiveness of design and content decisions.

Use an A/B testing platform, such as Optimizely, that will allow you to test the impact of a website change before rolling it out completely. The benefit is that we can utilize the data we capture to demonstrate to our clients which design decisions have worked and which need to be reconsidered. Be sure to read the next chapter, A/B testing, to learn more.

Configuring funnel and behavior analytics

Out of the box, Google Analytics can provide data on how visitors arrived at a website, how long they spent there, and whether they took any specific actions. And while these insights are helpful, they only give a “barbell” approach to understanding a customer’s relationship with a website. In other words, they allow us to understand the beginning and the end, but not so much the middle, of the time a customer spends on the site. Although Google Analytics has introduced a number of advanced features to provide more insight on visitor behavior, tools such as MixPanel and KISSMetrics will specifically track how visitors interact with a website. You can help your client configure one of these advanced analytics platforms and set up “funnel tracking,” which will map out the exact journey customers take before making (or not making) a purchase. Then you and your client can identify what’s really effective during the customer’s journey, and use that understanding to drive design and content changes.

4. Campaign analytics

Campaign analytics focus on measuring the performance of your client’s specific marketing campaigns or initiatives. This includes methods for determining effectiveness and profitability within each campaign. Potential initiatives you could pursue with your clients include:

Configuring UTM tracking to measure campaigns

Many companies use a channel-specific sales strategy. They isolate search engine optimization, paid advertising, social, etc. as separate means of engaging with potential customers. Although this approach certainly has value, a multi-channel strategy that’s driven by a campaign is a great alternative. But rather than monitoring traffic by source, you’ll want to analyze traffic by campaign.

Use UTM tags, provided by Google Analytics, to create a unified means of tracking a single marketing campaign across multiple channels. The benefit is a more holistic understanding of how a campaign-driven marketing strategy is performing.

Configuring an SEO analytics platform

Despite Google’s ever-evolving algorithm and the ups-and-downs of search ranking caused from it, SEO still remains an anchor strategy for ecommerce customer acquisition. Any company that has invested in an SEO or content marketing strategy should heavily consider a more specialized analytics platform to specifically measure the growth in their search performance. Plaforms such as MOZ allow you to track changes in your ranking, keyword optimization opportunities, and content updates across your client’s entire website. One initiative worth considering is working with your client to set up one of these platforms, and track changes month-to-month. The benefit is that they get a more real-time pulse on their SEO performance, and you get a deeper understanding of opportunities for content improvements.

Reporting effectiveness of promo-driven marketing

Ecommerce companies that use discount or promo codes in their marketing efforts need to ensure that the money spent is worthwhile, given that a discount is really a loss of revenue. Some basic reporting can determine which customers are utilizing promo codes and the impact it has on sales. Consider working with your client to configure discount code utilization reports, often done directly inside their shopping cart platform, to measure performance. The benefit is increased insight into how promo codes are being used across the board, such as new versus repeat customers, certain product lines, etc.

It’s tempting to do a job and be done. Finish the design. Push the code. We all like the feeling of completion and strive to have our to-do list checked off until we reach the mythical “zero”. This sort of mindset works well for one-off, project-driven businesses where meeting specific budgets, timelines, and scopes equates to success. It’s not as effective for driving repeat and retainer business from existing clients. By embracing analytics and stepping into the role of strategic advisor, you should be able to expand the value you provide your clients, and grow your own business in the process.

About the author

Ross Beyeler is a serial entrepreneur in the technology space and is the founder of Growth Spark, a design and technology consultancy based in Boston.

Next chapter

6. A/B Testing | The ABCs of Conversion Optimization

5 min

Grow your business with the Shopify Partner Program

Learn more