Why are Analytics Important?

Tanya HCatalog

Many company marketers have been wise enough to recognize that analytics are a key part of managing their e-commerce and catalog businesses. But analytics are just one component of the equation.  You need to start with clean data before you execute a test because without good data as the foundation, the analysis is flawed. The way you analyze and interpret the catalog data is important too.  Attention to detail is critical.  Future marketing strategy often rides on the test outcome and test interpretation.  It is important to get it right.

We often get asked about analytic services as a complement to the typical catalog circulation planning, strategy, and management services that we offer. Very few other catalog circulation consultants offer analytics, especially if it is not catalog-related.  At Hansel Group Marketing, we believe in the power of data-driven marketing and looking at overall business performance from all channels, not just catalogs.  If we think you should mail fewer catalogs then we will tell you that.  Of course, if we believe increasing your catalog frequency will generate incremental, profitable revenue, we’ll let you know too. Bottom line —  our decisions are based on what’s best for YOU.

What other metrics are important? A free-shipping offer example.

Our client wanted to analyze all of their online free shipping promotions to determine which, if any, to use in the future.  Marketers have traditionally looked at the bump in sales and calculated whether the lift in sales covered the free shipping expense.

But this is not always the best approach.  You should analyze other metrics.  Instead, consider the idea of examining orders in the weeks leading up to the free shipping event and orders in the weeks following the event.

  1. Did the free shipping offer cannibalize future sales? In other words, did your customers buy one or two weeks earlier than they planned because of the free shipping offer? (This is common.)
  2. Next, look at how the promotion may have impacted customers’ behavior and the average order value (AOV).
    • A best practice is to segment AOV into multiple tiers and look at the historic data.
    • How has the free shipping offer impacted behavior by migrating customers up and down between the AOV tiers?

We know that setting a free shipping level is a delicate balancing matter.  If it is too much lower than your typical free shipping standard, then you might be generating unprofitable incremental sales.  

 You want to set free shipping at the right level.

  • It could be close to your average order or your median order.
  • We know that customers will spend more to attain free shipping but if the minimum order is too high, it could actually hurt your response rate.
  • On the contrary, if the free shipping threshold is too low, many customers with higher AOV might spend less because the free ship threshold is now much lower than before. (They don’t need to spend as much as they usually do because they now qualify for free shipping on their order.)

Seeking some fresh thinking for your catalog and ecommerce business? We offer both marketing and circulation planning services, with exceptional analytical insights into customer behavior. Our visionary approach to circulation strategies, along with the comprehensive data analysis and customer insights, have helped set us apart from the typical catalog consultants.  Contact us today for a free consultation.

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