Magento Business Intelligence has helped hundreds of merchants use their data to grow faster and more efficiently. Along that journey, one thing has proven true in every case: All customers are not created equal. A high-value, loyal customer can easily generate more than 10x the revenue of a typical buyer.
This is especially true during the holiday season, when new customers can take on challenging characteristics like decreased loyalty and an increased appetite for sales and discounts. Meanwhile, Merchants are under immense pressure to grow revenue and add customers at a faster rate than the rest of the year. These factors combine to create a challenging situation, but thankfully, data can support a more meaningful strategy.
If you’ve been in business for a year or more, you are sitting on a wealth of data about your customers, your products, and the buying habits that unite them. Using a BI tool like Magento Business Intelligence, you can study this data to better understand the opportunities and pitfalls of your holiday strategy.
Here are some common eCommerce data tips:
Think of your customers in terms of their Customer Lifetime Value (CLV), not just the revenue from their first purchase. A customer’s repeat purchase rate has a major impact on their CLV and should change how much you’re willing to pay (or discount) to acquire them.
Study the impact of discounts on loyalty. Is a shopper who makes a first purchase with a coupon, or who buys sale item, less likely to return? Or will they only return during another sale? This doesn’t mean sales are a bad idea–it just means the economics are different for those customers. They should be studied as their own cohort.
Slice your CLV data by dimensions like geography, acquisition source, and products purchased. You may find customer segments that perform far better over the long term and want to focus your acquisition energy on those populations.
Talk strategically about what you’re trying to maximize. Is it revenue? Customer count? Margin? Profit? Your ideal tactics could vary based on this answer.
When it comes to holiday strategy, data rules. Make sure Business Intelligence has a seat at the table in all strategic discussions to build a long-term strategy that’s ahead of the curve.