Maximizing Profits in Ecommerce: The Power of Data

– It takes 90 days to determine if changes made to a website are effective in attracting repeat customers.
– Holding variables consistent, such as pricing, stock, and sales, is necessary to understand the impact of changes.
– Having clean data and analyzing repeat purchase rates can help optimize strategies and maximize profits in ecommerce.Hold all variables consistent for 90 days, specifically around pricing, stock, and sales, to understand the impact of changes made to your website and attract repeat customers.It takes 90 days to understand if a change you made to your website is actually working and attracting customers likely to come back and shop again. You need to hold all variables consistent for 90 days, specifically around pricing, stock, and sales, to understand the impact. That means no changing sales, no releasing new products, no chasing people with email sales, etc. You need clean data to understand repeat purchase rates. The problem is most companies don’t do this because they are always chasing more revenue. Weekly revenue, monthly revenue, quarterly revenue, last-minute sales to hit targets at the expense of profit margin. The amount of short-term thinking in e-commerce is probably worse than in almost any other business sector, largely because of its dependence on cash flow. We’ve been running a store with all variables controlled now for nearly 3 years, and things are night and day. By holding variables consistent, we were able to build an engine that just requires more fuel. We know statistically what works and what doesn’t, we’re able to spend time evaluating the overall impact. We were able to run a year-long campaign to understand repeat purchase rates from the first purchase early on, which has created the best practices for the business moving forward. It’s tuned, operates efficiently, doesn’t rely on sales, and is able to grow strategically and profitably. This year we’ll 5x last year’s growth while maintaining profit margins. But we were only able to do it this way because we had the data necessary to make the proper decisions and built the processes necessary to know which levers to pull. If you look at the image attached, you’ll see the percentiles between signup and first purchase, as well as the time between 1st and 2nd purchase. In these days of profit first, excluding your recent purchasers from sales offers for the first 30 days post-purchase will, in most cases, maximize your revenue. 75% of repeat purchases will happen in the first 40 days for this business. All of these are dynamically populated and variable based on segment as well. Because not all customers are equal, imagine knowing that one segment doesn’t need to be chased while another one does? How would that change your approach to maximizing profits? #data #ecommerce #marketing

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top