Smile, You’ve Got Big Data: Why You Need Business Intelligence

PayHelm on September 10, 2020

When it comes to ecommerce, retail savvy is no longer enough. You also need business intelligence (BI for short). Basically, BI takes all of the raw data generated by your ecommerce enterprise, analyzes and digests it, then spits out the information you need to make better, more informed decisions about marketing, sales, and other aspects of your ecommerce business.

Luckily for you, there’s an app for that. Specifically designed for ecommerce storeowners, PayHelm provides real-time analytics for your online retail business, translating customer info and sales data into reports that enable you to make decisions based on facts, not guesswork. A survey by Helical IT found that decisions made using facts had a 79% greater chance of success than decisions made via intuition

In fact, your ecommerce business is probably already generating, tracking, and aggregating the essential information you need to help it thrive and grow. Nowadays, even small and medium-sized businesses are producing mountains of big data, but there’s gold in them thar hills — if you know how to extract it.

According to a study by Nucleus Research, for every $1 a company spends on BI, it makes $10.66. That’s an ROI of more than 1000%! Furthermore, companies that make extensive use of customer data analytics in their business decisions see 126% profit improvement compared to companies that don’t use BI. So it literally pays to take advantage of the insights gleaned via business intelligence.

Best of all, BI can lead to higher sales and more satisfied repeat customers. Why? Because business intelligence can help you to better understand your customers and the market, highlight trends, and spot potential problems before they turn into pitfalls.

That’s where PayHelm comes in. This multifunctional BI tool crunches data as fast as it comes in. Then it makes analyses of that data available in various forms and formats, including charts and graphics that visually reveal trends and patterns.

A dashboard serves as Information Central, displaying and managing essential metrics such as key performance indicators (KPIs) and other relevant data points that help monitor the overall health of your ecommerce business. From there, you can drill down to the details that matter most.

In addition, ad hoc reporting enables the creation of dynamic, real-time data reports on an as-needed basis. These ad hoc reports are designed to answer a specific business question, usually in response to an event. Want to find out how well your last promotion did (or didn’t)? PayHelm can tell you with just a few clicks.

Speaking of marketing, business intelligence can break down your customer base into groups with similar characteristics. These groups are known as cohorts. BI uses cohort analysis to understand the trends and patterns of customers over time in order to better tailor the products offered to various cohorts along with helping to predict what new product(s) will be most likely to sell well.

Cohort analysis is very helpful in evaluating the results of your marketing efforts. It can also tell you which groups of customers are driving the most revenue.

Another major concern for ecommerce businesses is customer retention and its flip side, churn (a.k.a. customer attrition). Typically, for small and medium-sized businesses, 3%-5% is considered to be a “good” churn rate.

To calculate your business’ churn rate, take the number of customers you lost last quarter and divide it by the number of customers with which you started. To determine the lifespan of your average customer, divide 1 by your churn rate.

BI software like PayHelm can help you predict churn and even suggest ways to combat it.

Here are some more examples of the statistical gold that PayHelm can mine from your motherlode of ecommerce data:

  • Performance metrics reveal your business’ actions, abilities, and overall quality.
    • Product analysis – total sales, orders, and average price
    • Global sales – analyzed by location
    • Product performance – keyword analysis
  • Profitability analysis (e.g., how much your business makes from each $1 in sales)
  • Trend and problem indicators. Ecommerce KPIs include…
    • Average order value
    • Conversion rate
    • Cost of goods sold
    • Gross and net profit

Thinking of adding another sales channel (or channels)? PayHelm can help you there, too; it can analyze various factors across multiple ecommerce platforms, including BigCommerce, Shopify, and PayPal. You can also control user access to data — e.g., who can see what — as well as export, manage, and save your data in CSV format.

PayHelm is here to handle your business needs with its user friendly reports. Your marketing team, accounting team and leadership team will all love being on the same page. Try it now for free.

Why Repeat Customers Are the Lifeblood of Your Ecommerce Business (And How to Woo Them)

PayHelm on August 25, 2020

Smart retailers both online and off value one kind of customer above all others: repeat buyers. Why? Because the most profitable customers are those you already have, so it pays to keep them coming back.

The average ecommerce storeowner spends more than 80% of their marketing budget on customer acquisition. Yet an Adobe Digital Index study that analyzed data from 33 billion visits to 180 retail websites showed that more than 40% of the total revenue generated came from only 8% of the sites’ visitors: namely, returning customers (those who bought once before) and repeat buyers (those who made at least 2 previous purchases).

In fact, 61% of small and medium-size businesses report that more than 50% of their revenue comes from repeat customers. During economic slowdowns and the holiday season, returning and repeat purchasers account for even more revenue

It’s less expensive to retain customers than it is to acquire them. It takes 5-7 new shoppers to bring in the same amount of revenue as a single repeat buyer. In addition, it costs 5 times as much to acquire a new customer than it does to keep an existing one. Furthermore, it costs 16 times as much to bring a new customer up to the spending level of repeat purchasers.

It’s also easier to sell to repeat buyers: Whereas the average conversion rate for ecommerce businesses is 1%-3%, a repeat customer has a 60%-70% chance of converting. According to Adobe, repeat buyers are 9 times more likely to convert than a first-time shopper. This especially comes in handy when you’re introducing new products.

Repeat purchasers tend to spend more the longer they stay with you, too. A study by Bain & Co. shows that in the apparel category, a shopper’s 5th  purchase was 40% larger than their first purchase, while their 10th purchase was 80% larger.

But the payoff from repeat buyers doesn’t stop there. Repeat purchasers double as your best brand advocates, telling an average of 4-6 other people (50% more than one-time buyers) about their experience with you. That’s the kind of advertising money can’t buy!

Multiplied by social media, word of mouth from happy customers adds up to a whole lot of free marketing. It works, too: More than 90% of consumers trust and buy from a brand recommended by friends or family. In addition, 43% are more likely to purchase a new product after learning about it via social media.

But here’s the best news of all: A mere 2% increase in customer retention is the equivalent of cutting costs by 10%, while increasing customer retention by just 5% boosts the average company’s profitability by a staggering 75%.

So how difficult is it to get a customer to come back and shop with you again? After his or her initial purchase, there’s a 27% chance of that shopper returning. But if you can get them to come back for a second purchase, the odds of them returning again jump to 45%. After a third purchase, there’s a 54% chance that they’ll continue coming back.

But you don’t have to rely on chance. There are a number of proven strategies for enticing customers to shop with you again and again. And this being the 21st century, there’s an app for that. Smile.io specializes in loyalty programs for small businesses. Their goal is to help you build your repeat customer base into an engaged community, which in turn will enable you to grow your business.

An effective loyalty program helps you to establish and maintain an emotional relationship with every member of your community. It’s not just about discounts; simply offering the customer a discount on their next order may bring them back, but then they’ll expect a discount every time and/or wait until they receive one to make another purchase. Either way, it’s a downward spiral.

Nowadays, a well-designed loyalty program motivates valuable customer actions and increases engagement. It also creates an effective switching barrier: Your customers will be less likely to jump ship to a competitor if future rewards from you are in store for them!

You can reward customers for all kinds of activities in addition to purchases:

  • Account creation
  • Social media follows or shares
  • Birthdays
  • Referrals and reviews
  • Anything else you can think of

Smile.io integrates with BigCommerce, Shopify, Shopify Plus, and Wix, empowering you to create a customized loyalty program especially tailored to your ecommerce business via Points, VIP recognition, Referrals, and more. Their Resource Center features a reference library of ebooks — including industry-specific how-to guides — to help you get started. Finally, Smile-io also offers one-click integration with an impressive array of related tools.

So follow the smart money: Stop spending most of your marketing budget on customer acquisition, and start focusing instead on customer retention. Your bottom line will thank you!

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