Evaluating Ecommerce Analytics: A Fractional CMO’s Guide To Measuring ROI
Many e-retailers face an overwhelming amount of data and do not know what to do with it. How can they make these pieces of information useful? What metrics should they track?
An e-commerce fractional Chief Marketing Officer (FCMO) is an analytics master who helps businesses define their marketing objectives and maximize their returns through calculated, meaningful approaches. This guide walks you through the five fundamental steps of working with an FCMO. It also:
- Tells you the most ideal key performance indicators (KPIs) to track,
- Explains what some of the analytics results mean, and
- Highlights the benefits of multi-touch attribution modeling.
Use data to your advantage with an FCMO as your partner. Learn the basic steps to analyzing and interpreting e-commerce metrics below.
Wondering what a Fractional CMO can do for your business? Watch this video below.
1. Define Goals and KPIs
Sound analytics always begin with two essential factors:
- Marketing or business objectives
- KPIs to determine progress (or failure)
To get both, a fractional CMO begins each new project with in-depth discussions with other C-suite executives. These range from the board of directors to marketing heads, sales managers, and even the business owner. The purpose is to align the succeeding steps with the goals all parties want to accomplish.
These priorities vary. They might include driving acquisition by attracting new customers, optimizing conversion, or boosting retention by nurturing loyalty and repeat purchases.
Either way, the goals should map to overarching business needs. Examples include growing market share, entering new markets, or increasing average order value.
Once the stakeholders identify their objectives, the fractional CMO proceeds to identify the KPIs. Based on the example,
- If acquisition is the focus, key metrics are overall site traffic volume, number of new user sessions, and cost per lead or customer acquisition.
- For optimizing conversion, critical KPIs are bounce rate, pages per session, average time on site, and conversion rate.
- When tracking retention, the primary metrics are often repeat purchase rate, churn rate, customer lifetime value, and share of wallet.
The best FCMOs know how to sift through various types of benchmarks. They know to avoid vanity metrics, which sound impressive but rarely influence business outcomes. For example, social media following matters if you want to measure demand generation, not conversion.
With actionable KPIs directly tied to goals, the fractional CMos can then regularly pull analytics reports. They can now analyze the data and tweak strategies as needed to improve future results.
2. Track the Customer Journey
Not everyone who engages with your brand becomes a customer. However, understanding how customers move through your e-commerce funnel offers insights into the following:
- Friction points or barriers that delay or prevent conversions
- The channels that deliver the best returns
- Types of content your audience prefers
Leveraging analytics to map the customer journey allows FCMOs to uncover areas for optimization at each touchpoint. Here is an example:
|Content Analyzed||Metrics Analyzed||Interpretations of Results|
|Product pages||Page views, unique views, bounce rates, and time on page||High bounce rates often indicate user-experience issues. These might be low-quality images, unclear descriptions, or missing information.|
|Homepage||Traffic volume, bounce rate, and on-page interactions||These metrics determine whether the homepage drives the right traffic deeper into the website.|
|Category or collection pages||Unique page views, average time on page, and exit rate||Poor performance usually signifies suboptimal navigation, filtering, or merchandising.|
|Cart and checkout||Abandoned cart rate, on-page duration||Longer times on these pages could signal a tedious checkout process. Monitoring abandoned cart rates tied to each step illuminates drop-off points.|
|Blog, offers, and key landing pages||Conversions, bounce rates, and traffic sources||These KPIs show how well these pages attract and convert target segments.|
Continually analyzing the customer journey across these key pages unravels certain buyer behaviors, such as webrooming.
Most of all, it shines a light on the pain points and barriers in the user experience. For example, the FCMO might detect a high abandonment rate on the shipping options page. It might mean the business should do better at simplifying the process or explaining the choices. It might even have to add more options.
3. Leverage Cohort Analysis
Cohort analysis is a powerful technique that segments users based on shared characteristics and analyzes their behavior over time. Usually, an e-commerce fractional CMO breaks them down by the following:
- Traffic source
- Time of acquisition
- Sign-up date
- Other factors such as channels and mobile devices used
Comparing cohorts reveals insights such as these:
- Which traffic source produces customers with higher lifetime value?
- Do users acquired via mobile convert better than desktop users?
- How does retention differ between email and social media subscribers?
The data lets fractional CMOs double down on acquisition channels that drive valuable customers. To further maximize the purpose of these cohorts, these part-time C-suite leaders also perform A/B testing.
In summary, one can statistically determine the better-performing option by comparing two versions of a page, email, ad, or other asset.
For instance, a test shows that a simplified one-page checkout increases conversion by 12% compared to a multi-page flow. The information then enables the marketing team to refine pages to maximize KPIs such as conversion rate, revenue per visit, and average order value.
4. Optimize Attribution and Track Trends
With so many ways to shop, including virtual reality, customers rarely deal with only a single touchpoint. For this reason, an expert e-commerce fractional CMO uses multi-touch attribution modeling.
Attribution modeling analyzes the influence or impact of every channel across the buyer’s journey. It also gives a more accurate picture of marketing returns. Examples include the following:
- Email generates over 50% of revenue, despite other channels getting the last click.
- Paid search dramatically boosts conversions when coupled with organic.
- Referrals yield three times higher conversion rates but lower average order values.
Fractional CMOs diligently track KPIs over time to monitor trends and seasonality. E-commerce data naturally fluctuates based on the following:
- Seasonal peaks
- Testing cycles
- Platform changes
- Factors such as new product lines and consumer behavior
Because the fractional CMO understands the customer cycle better, they can shift the budget toward the channels and campaigns driving the most valuable actions and sales.
5. Synthesize Insights to Drive Strategy
One of the key skills of an e-commerce fractional CMO is taking raw analytics and synthesizing the most important data to inform strategy and planning.
Let us say you are a home-decoration seller. Analytics revealed that repeat-order rates were higher among mobile app users than desktop buyers. It also showed significant spikes for “table settings” before Thanksgiving.
Based on these, the fractional CMO offers the following recommendations based on those analytics insights for a home decoration seller:
- Invest in mobile app development to enhance personalization, recommendations, ease of reordering, etc.
- Run targeted promotions before Thanksgiving timed to user search behavior for “table settings” and related seasonal products. Offer discounts or incentives for holiday-themed items.
- Leverage push notifications before Thanksgiving to capture peak demand. Remind mobile app users about deals on table settings, dinnerware, linens, etc.
- Develop an email nurture campaign focused on tablescape ideas and holiday entertaining that culminates in a Black Friday or Cyber Monday promo code.
- Shift a portion of the marketing budget toward channels that effectively target and acquire mobile users. Examples are paid social and search campaigns optimized for mobile.
- A/B test a dedicated mobile landing page for holiday tableware compared to sending all traffic to the main website.
- Analyze historical seasonal demand to forecast inventory needs for table settings and related categories to meet expected spikes.
- Compete in post-holiday customer surveys to capture feedback on tableware shopping experience and improve relevancy for future events.
E-commerce will only get more competitive. How businesses use their data can spell the difference between thriving and folding. Fortunately, an e-commerce fractional CMO can unlock greater value from analytics to accelerate or sustain growth.
Do you need a marketing leader for your business? Digital Authority Partners (DAP) provides seasoned FCMOs to leading e-commerce brands. Our data-driven experts specialize in translating analytics into strategic insights to boost acquisition, conversion, and loyalty.
Contact us to schedule a free consultation.
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