How 3 Startups Use Data to Improve Ecommerce Sales

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By Tracey Wallace2013-12-02 22:46:30 UTC

Marketers pay attention to many metrics, from traffic and bounce rate to referrals and user profiles, but perhaps none is more important than conversion — you can keep the lights on if you're not bringing in revenue. But conversion metrics aren't just about how many people clicked "purchase." There's data within conversions that can help you determine which products your consumers want more of, how to surface recommendations and even how to better market your products on your own site.

See also: Marketing 101: The Importance of Conversion

We spoke with three founders and data specialists who use product conversion information to drive customer satisfaction across the board. To them, these metrics point out which products are doing well and which aren't, but they also highlight copywriting problems, search difficulties and customer issues in real time.

Below, we highlight three ways their companies use product conversion metrics to improve the ecommerce experience, drive revenues and build customer loyalty.

1. Talk to Consumers

Morgan Lynch, CEO and founder of Needle, a site that powers online engagement for ecommerce sites, says low conversion numbers often point to a lack of communication between a brand and their potential customer.

"Let's say I'm trying to purchase a digital camera as a gift for a family with young children," says Lynch. "I'm looking for a waterproof and shockproof camera. Most of the cameras make it very clear that they are both waterproof and shockproof. One camera, though, doesn't convert well. It has a well-respected brand, so what is the cause of the lower conversion? A marketer could start to move the placement in the category, or could try highlighting product specifications — but these are all guesses."

His solution? Don't make any assumptions –- and talk to your consumer directly and immediately.

"Conversion numbers are helpful, but they only indicate a potential problem. The good news is that customers will generally tell you what those problems are if you engage them in a dialog that's conducted with someone credible," says Lynch. "There are good tools out there to quickly learn from your customers via your website. The first is social Q&A, which allows customers to post questions and receive answers from customers, brand representatives and enthusiasts. The second is real-time chat that provides conversation with experts who know the products.

If those customers shopping for cameras were having hundreds of conversations with camera experts, their questions would highlight the true concerns of this particular digital camera. They might often ask, 'Are you sure this camera is shockproof? It looks like it's made of plastic,' or 'Does this camera shoot video as well?' These types of questions highlight the product concerns quickly. Mining these dialogs will deliver actionable insights."

2. Serve Better Recommendations

When YouBeauty launched an ecommerce brand BeautySage, the mission was the same as their content site: to offer customers medically proven and expertly sourced products. In doing so, the engineering team was tasked with creating a back-end solution to serve product recommendations for each individual customer.

"In creating BeautySage, we endeavored to change the paradigm around merchandising products," says Stuart Bogarty, CMO at BeautySage.com. "Our goal was to start with a highly curated selection of products that our team of chemists proved delivered on their promises and claims. We wanted to create a brand that allowed consumers to discover new products that worked for them."

See also: 8 Landing Page Remedies to Boost Conversion Rates

Traditional ecommerce sites see higher conversion best-sellers, but for a site that places a premium on personalization, the sign of a working strategy is when product conversion metrics even out. Conversions are spread across many products, since people have different preferences and beauty needs.

"We are constantly monitoring our metrics across all ecommerce variables to ensure we are maximizing overall conversion and sell-through on individual products. Like most retailers, we promote our best-selling products to consumers, but we also factor in what we have learned about individual consumers. A consumer who has browsed or shopped for a particular product or group of products in the past may or may not see a best-seller recommended, based on whether we think it is right for them or if they had already purchased it."

3. Rethink Your Marketing

In the end, if a product isn't moving despite being recommended often and no complaints from customers, you need to look at your marketing efforts surrounding the product. Christopher Penn, vice president of marketing technology at SHIFT Communications, says that in these cases, the marketing team can benefit tremendously from product conversion metrics.

"Conversion information on individual products is useful for product managers and marketers who are looking to maximize overall conversion by offering the best things first, no matter what they are. For example, if a product is not converting well, a marketer has to ask whether it's a placement or awareness issue, or whether it’s a product value issue." If it's the former, the marketer can use A/B test for increased awareness through promotions and campaigns. If it’s the latter, the product might need to be redesigned or reimagined so it's perceived as more valuable and appealing to the target audience.

In all, low product conversion numbers point to a problem, not a solution. Rather than removing products that don't perform well, test, talk, re-envision and recommend items to your customers in a way that betters the on-site experience. In doing so, you'll increase brand trust, boost ease of use and improve product visibility to drive product conversion.

How does your company use product conversion metrics? Tell us in the comments.

Mashable composite. iStock, akindo

Topics: Business, Marketing, Metrics That Matter, product conversion