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

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.

Join PayHelm at the Ultimate D2C Stack

We’ve partnered up with BigCommerce and skubana to put on a webinar featuring speakers from BigCommerce, ShipperHQ, Happy Returns, and PayHelm of course!  

It’s a live webinar on June 3 and 4 featuring several other major companies all offering input and strategies on how eCommerce companies are using technology to optimize and scale their business – and we would love to see you there!

This webinar series focuses on best practices for growing and operating a lean and resilient e-commerce business in the post-COVID economy.

Ecommerce operators are often overwhelmed by the endless ecosystem of software providers. Many of these technologies are nice “add-ons”. But your operational tech stack is fundamental to building and running your business. 

These tools can often make or break a brand especially during times of economic downturn. Without the correct systems in place, you run the risk of failing.

This virtual summit focuses on key operational technology to grow and future-proof your brand.

Taking Care of (Online) Business: eCommerce Workflows

If this is the workflow for your ecommerce business, it’s time to clean up your act!

Whether you’re an accidental entrepreneur whose hobby selling on eBay became a full-time occupation or a purpose-driven e-tailer who deliberately set out to build an ecommerce empire, you’re in business now.

But are you running your business, or is your business running you…ragged? If it’s the latter, then it’s time to review your procedures with an eye towards streamlining and automating whatever you can.

Because when it comes to your ecommerce business, it literally pays to mind your Ps and Qs. Here’s how the workflows boil down, step by step:

  1. Product sourcing
  2. Post items for sale
  3. Promote your listings and store
  4. Quick shipping
  5. Prompt and professional customer service
  6. Quantify your business’ success via key metrics

Let’s take a closer look at each of those workflows.

Product Sourcing = Homework + Legwork

Before you can start selling anything, you’ve got to have something to sell. Time to go product sourcing! But where to start?

You’ve got plenty of options. Many online sellers swear by thrift shops and garage or estate sales, because they love the thrill of the hunt. But scaling a business based entirely on unique items — “one-offs” —can be brutal; you’ve got to list items as fast as you sell them just to keep your virtual store stocked. Unlisted inventory is your tied-up cash just sitting on the shelf, laughing at you.

Another viable sourcing option is retail arbitrage: buying marked-down, limited edition, and/or hard-to-find merchandise at brick-and-mortar shops or online, then flipping it for a profit. The drawback to this business model is that it’s unpredictable.

Ditto for buying liquidation goods; you can never be sure where your next hot product is coming from or what it may be.So start at the very beginning (a very good place to start!) by doing some market research. Maybe you’ve already got a product category (or categories) in mind; maybe you’re wide open to suggestion; or maybe you just want to find your next hot niche. Or maybe all of the above. Whichever it is, make sure you do your homework!

List More, Sell More

Once you’ve settled on a saleable and sustainable product mix, you’re ready to start listing. That can be the most challenging part of your business to scale, and you can’t do it manually — or singlehandedly.

So start automating whatever you can — the sooner, the better. Eventually, you’ll also need to add somebody else, or even several somebodies, to your payroll. Because even with stock photos, listing takes time. And if you’ve got to do your own product photography to boot, forget going solo. You’re going to need help from third-party tools and/or human employees.

The best third-party ecommerce tools offer multiple plans to accommodate your growing business. Most offer free trials, too, so don’t hesitate to shop around until you figure out what feels right for your business.

Then choose the tools that can best handle what you need them to do, whether it’s importing/exporting listings across platforms, keeping tabs on your inventory, streamlining customer relations management, or shaping up your shipping. Whatever tool(s)’ you use should include some kind of reports or metrics.

Keep Calm and Leave Feedback

Speaking of customers, you’d better be prepared to deal with them — preferably promptly and professionally. One word: Communication. Answer questions ASAP; manage buyer expectations whenever possible; and focus on each customer’s complete satisfaction as your bottom line.

Start each customer on the road to happiness  — and set yourself up for reciprocal feedback — by leaving feedback for buyers as soon as payment is received. The buyer’s job is to purchase and pay; once they’ve done that, show them some feedback love. (Hint: You can automate it.)

Of course, if they don’t pay, you’ll need to have a system in place to deal with that as well. For example, on eBay, you simply open an Unpaid Item case — or let Unpaid Item Assistant do it for you.

But don’t just sit back and wait for shoppers to stumble across your listings and store. Get out there and promote them via social media, Facebook ads, or marketplace tools such as eBay’s Promotions Manager and Promoted Listings. Consider rewarding repeat buyers in some way. Set up volume discounts. The more traffic you can drive your way, the bigger the boost in sales.

Fast Shipping and Happy Returns

Once you do make a sale and receive payment, that’s your cue to ship quickly. Ideally, your shipping solution of choice should allow you to purchase and print shipping labels; generate packing slips and customs labels; upload tracking; and notify buyers that their item has shipped and when they can expect to receive it.

Your job doesn’t end there, though. After-sale customer care is critical to your ongoing success. If they’re happy, great; if not, you’ve got to negotiate an amicable resolution. You might also have to process a return and/or issue a refund. Just don’t ask for feedback! Take care of your buyers, and your feedback will take care of itself.

Know Your Numbers

You can’t manage your business unless you can take its measure via certain key metrics. You’ve got to keep tabs on gross profit versus net profit; cost of goods sold; and overhead expenses.

Drilling down, you need to know how well each product is performing along with what’s selling best on which channel(s). It’s also useful to analyze sales by SKU; by buyer location; by price point; by order size; and more. Quantifying this information enables you to see what’s working versus what’s not working and allows you to gauge your success (or lack thereof).

Each marketplace provides sellers with a certain amount of data and some type of sales reports, but to really keep your fingers on the pulse of your ecommerce business, you’re better off using a third-party analytics tool that you can tailor to suit your needs.

Remember: You can’t manage what you don’t measure. If you don’t know your numbers, sooner or later, your business is going to crash and burn.

So there you have it, the soup to nuts of ecommerce:

  • Source products that will sell and enable you to scale
  • Post listings as quickly as possible
  • Promote your products and store
  • Ship quickly (and cost effectively)
  • Communicate with customers every step of the way
  • Streamline and/or automate as much of the above as you can
  • Monitor your business’ health via key metrics

Now go forth and sell!