Analytics

How Ecommerce Businesses Use Data to Improve Customer Experience

Harness the customer insights lurking in your store’s data

Patrick Foster Patrick Foster on June 16, 2017 • 12 minute read

Whether you are selling products, digital downloads, or services, getting to grips with your customer experience (CX) can bring your business more customers and sales. And when selling online, where everything is measurable, there’s no better way to improve your customer experience than by leaning on your data.

Making sure that your customers have a good experience when shopping with you goes beyond just website usability – it extends to your social media channels, and runs through everything that you do as a business. It includes the way you deal with customers on the phone, your email copy and even your product packaging.

Tracking customer experience for ecommerce businesses should go much deeper than superficial sales figures and vanity metrics. If you really want to know how to please your customers, start using data as a way to analyze your business, and use it to implement changes and track improvements. Here are some key ways in which data can help you improve your CX.

Track the right CX datasets

Avoid analysis paralysis and focus on core CX datasets, rather than getting bogged down by overly complex segmentation.

The most important things that you need to get out of your data are:

  1. Are we acquiring the right customers?
  2. Are we converting them?
  3. Are we constantly improving our customer experience?

There are a dizzying array of KPIs and metrics that ecommerce businesses could track to measure customer experience – it can quickly become very overwhelming. It’s important to learn how to benchmark KPIs and ensure that you are looking at the ones that really matter.

Here are the four key CX metrics I’d recommend prioritizing:

  1. Net promoter score: this is the proportion of customers who would refer your business to their friends and family. Referrals are absolutely crucial for word-of-mouth marketing and are a great indicator of how pleased customers were with your product, service, and brand. If you are looking to build a brand that is focused on customer advocacy (and I recommend that you do), this will be a key one to focus on. Calculate it yourself by subtracting the percentage of overall detractors from the percentage of promoters: use the 0-10 scale outlined here.
  2. Satisfaction levels: Track customer satisfaction levels to find your current benchmark, and track eventual improvements. You can do this by sending out surveys that simply ask customers to state how satisfied they were with a service or interaction, but you can always play around with the wording and use more interesting language if it makes sense for your brand. Online surveys are quick and easy, but a dedicated telephone or SMS campaign can yield higher response rates. Satisfaction surveys can be further targeted for analyzing separate elements of your CX (product, delivery, customer service etc.).
  3. First response & call handle time: Nothing annoys a customer like waiting around. Make sure that you have competitive first response times across the board, and that you deal with customer issues promptly. Trailing support calls and support tickets aren’t great for customers, and cost your business time and money.
  4. Customer effort score: A fast and smooth ecommerce experience ensures that your customers aren’t all hot and bothered by the time they make it to the checkout. Ensure that your customers aren’t being asked to partake in unduly laborious data-entry (like giving their date of birth to download content), or that they aren’t being sent on a wild goose chase around your product categories. Your CES score will be determined by your customers’ view of this one crucial question: “the company made it easy for me to handle my issue/make a purchase etc”. Answers will come back to you in the form of real-time data if you invest in CES analytics, but I always recommend that you give customers a sliding 0-10 scale to accurately reflect different customer experiences.

Data integration is an ecommerce must-have, and will especially help businesses operating in a multichannel environment who want to improve their CX scores.  You need to know your in-store experience compares with your online one, or whether certain offers or deals do better online. Use these insights to decide which elements of the customer experience are going to be ‘exclusive’ to each environment.

Fight the churn

Calculating your churn rate can burn — but you need to know it in order to improve it.

Calculate your churn rate and see whether you can build better brand loyalty and decrease churn. (How is your churn rate calculated? It’s basically the % of people who don’t make a repeat purchase, or cancel their subscription.)

For a subscription-based business, it’s the number of customers who canceled that month (or quarter), divided by the total number of customers.

Recommended Dashboard: Stripe MRR + Churn

For a traditional e-commerce business, calculating your churn rate is easy but you need to first decide on a ‘churn event’. One example: a customer that does not make a repeat purchase within a few months.  Once you have found your churn event, the calculation is the same.

Your churn rate will tell you how well you are doing at keeping customers happy, and whether they are likely to become repeat ones.

  1. Community managers can help galvanize customers into advocates and increase loyalty. Start investing more money in content marketing, blogging, and influencers in order to build a culture around your products.
  2. For subscription-box churn, a freeze or skip model may help you eliminate any hard cancels. Give consumers the option to skip a month here or there and you may increase your customer lifetime value.
  3. Consider your different customer stages, from awareness to advocacy. How can you make a difference during these different stages? Are you doing all you can to keep people engaged with your brand? Copywriting plays a big part in engaging customers and prospects.

Utilize data for improved personalization

Your customers want to feel like you know them and care about them. Personalization is a great way to improve customer experience. Being personal with customers is about listening to their needs and feedback, and using the data they give you to improve customer interactions.

  1. Use data to improve your email marketing. Previous purchase history can help you inform customers when their favorites are back in stock, go on sale, or release a new product line. You don’t want to go overboard with product alerts, but a few ones every now and then won’t go amiss.
  2. Everyone hates the feeling of getting a ‘personalized’ email that hasn’t gone beyond the editing of “FNAME”. Up your game and segment out your customer data so that you can send people emails they will actually find interesting. There are many ways to slice and dice customer data. You could start with gender and location, but purchase history and social media data can help you step up your game and target people on a niche demographic level.
  3. You are competing with the likes of Amazon, who display pages and pages of relevant product recommendations to people. Why not start doing the same? Start collecting product recommendations into personalized lookbooks or pages, and ask users to feedback on them so that you can keep improving them.
  4. Mobile selling and personalization go together. Mobile push notifications and SMS marketing can be a great way to interact with loyal customers in a fun and relatively non-invasive way. Remind them that they still haven’t spent their voucher, or that they haven’t registered for exclusive access yet — but make sure that it’s easy to turn these messages off. No one likes a mobile that’s constantly buzzing!
  5. When it comes to multi-channel selling, use mobile as your bridge between online purchases and in-store pickups. Keep the customer updated on the arrival of their package and make collection convenient for them.
  6. A tool like Evergage can really help you scale your personalization efforts. It gives you a central place to store and interrogate customer data, allowing for quick dissemination across your sales channels. Start seeing your customers like clients. Save any relevant information you can on them, and bring it up the next time you see them (but don’t be too creepy).

Be on ‘high alert’

Customer experience issues are pretty hard to fix once they’ve spiraled out of control — so be on high alert for your brand at all times. Accurate data tracking will enable you to get a handle on customer issues pretty fast. Unfortunately (or fortunately), this is a 24/7 job that never sleeps!

  1. Your response time metric will be key to analyzing how fast you are able to jump on customer queries. Look at your response times across chat, email, and phone and review any channels that are falling short of the benchmark.
  2. Tracking mentions of your brand or new reviews can be automated with services like Talkwalker. Using a service like this will ensure that you are always one step ahead of any Internet trolls or disgruntled customers venting on social media.
  3. You need a responsive and agile team in order to deal with customer experience issues fast. Make sure you have customer service in-house capability. Review any negative interactions as a team and see how you can improve your responses. It’s a good idea to create a ‘bank’ of previous interactions for training and improvement.
  4. Use live chat logs and support tickets as a source of customer experience data mining. If you are selling software products, track the number of support requests logged vs. the number of active user hours, to see how easy people are finding using your product.

Recommended Dashboard: HelpScout for Customer Support

Implement a great UX for an even better CX

“Customer listening […] can help you see and adopt their view of your world, creating the understanding and empathy that can help drive customer-centric decision making.” (Source)

As a business, you need to develop empathy in order to create a website experience that’s intuitive and easy for users to navigate and use. If your site is not focused on the user, then none of your other fancy customer experience strategies will work.

  1. Don’t make assumptions — they are dangerous! Data will help you determine whether your web environment is working for you. It’s easy to get attached to a design or a feature, despite what it may be doing for your conversions. Look at your web analytics — see whether high bounce rates or low dwell times are indicative of pages that users find confusing or unappealing. Look at your on-site search data and server logs for any further clues as to what customers are looking for on your site, and whether they find it fast enough.
  2. User testing is a great way to get ‘live’ feedback from your site. A service like UserTesting can help you manage some of the testing in-house, but you can also outsource this stuff pretty cheaply. (Though remote user-testing can be slightly less accurate). Whatever you do, don’t substitute actual customer data and knowledge for ‘expert’ or colleague input!
  3. Choose an ecommerce builder that will not only allow you to easily manage customer data, but will also enable you to make rapid changes to usability and web experience in a continuous loop environment. Store builders like Shopify give you a lot of UX features out of the box, but you can also build your own store using professional WordPress templates from Themeforest, or build a store on Magento. Whatever you go for, choose something that’s fast and flexible that integrates with all the essential business and marketing tools. Customer experience considerations need to be taken into account during the early stages of web development, not as an afterthought.
  4. Small incremental changes to online customer touch points (removing a rogue typo, improving a contact form by making a field non-compulsory, or sending out better order confirmation emails), should not be ignored and devalued. Small changes will contribute to larger changes.

CX feeds your marketing strategy

CX data should feed into your marketing strategy in a multiple of ways, not the least in:

  1. Where do we want to be seen? (platforms, channels, tactics)
  2. Who needs to see us? (audience, buyer personas)
  3. Are we hitting the right notes? (engagement)

Most social media channels and advertising platforms spit out tons of data — use these to your advantage to improve your reach and conversion rates. The old ‘see what sticks’ methods don’t fly anymore — every marketer worth their salt needs to get comfortable with data mining.

  1. A managed CRM and marketing tool like HubSpot has saved many businesses from the marketing black hole — consider whether a similar solution would be useful for managing customer data more efficiently.
  2. Data will also help you manage your inbound content strategy — telling you what questions need answering, and where your customers are consuming online content. Creating the right sort of content will help you support customers on their buying journeys, without being pushy.
  3. Make your awesome CX a marketing talking point — many brands sell their products and services on the strength of their customer service and support. This can be a game changer for nervous consumers.

What data won’t tell you

Finally — it’s important to acknowledge that staring at graphs all day isn’t going to solve all your customer experience issues. You need to think about your brand USPs and how you are going to go the extra mile.

Here are some CX considerations:

  1. Packaging — stand out from the crowd with luxury or quirky product packaging
  2. An awesome phone manner — greet customers like old friends
  3. Unique brand tone-of-voice — become known as a genuine ‘voice’, not another corporate drone
  4. Loyalty programs & perks — what can you do today to make a difference to your loyal customers?

Dig into your CX data today

It is never too early to integrate data into your small business operations. You don’t have to be a tech-savvy digital start-up in order to benefit from data tracking! Data is the friend of any ambitious e-commerce entrepreneur who wants to grow their business fast, and please their customers in the process.

What’s your number one customer experience metric that you always track?

About the author
Patrick Foster
Patrick Foster Ecommerce marketer with 10+ years in the industry. I’m currently writing as a side project. I love to create content for entrepreneurs and help them grow their businesses, no matter what stage they’re at!
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