How eCommerce Marketers Restore Their Profit Margins with SegMetrics

Keith Perhac
Founder @ SegMetrics

Ecommerce is brutal. Between climbing ad costs and narrowing profit margins, it keeps getting harder to turn a profit.

Facebook and Google might report a profitable return on ad spend (RoAS), but that doesn’t always translate into a bulging bank account. The source of your revenue ends up being a mystery, with both platforms taking credit for conversions, while lots of sales just appear from (direct). 

We’ll show you the blindspots that Google and Facebook gloss over, and how SegMetrics can bolster your profits.

1) Revenue data that matches your bank account

Most ad marketing tools can only look at the orders that have been placed. Because they focus on events rather than true connections, they can’t tell if an order was later canceled, unfulfilled or refunded. Plus, they might only report on sales that originated from their ads or emails.

What marketers need is a tool where a report showing $90k this month actually means $90k in the bank.

That way the task becomes to take that total and look at where each dollar came from. It might be a returning customer, a referral or an ad click, but it means you are using an accurate figure as your starting point.

With SegMetrics, you will finally get true sales reporting.

All the ad and customer data is connected to your payment provider. Even if a transaction happened offline, such as a recurring subscription payment or phone sale, it will be in your system. SegMetrics’ algorithm is able to connect those purchases back to the contacts and lead sources that brought them in — no matter where they came from.

The SegMetrics Way #1: Just authorize the integrations

You don’t need to mess around with a pile of code and custom triggers with SegMetrics. Just authorize the integrations for your tools and your revenue report will be right there waiting for you, ready to compare in different groups or criteria.

2) Find where your repeat customers came from

Big spenders are the lifeblood of any ecommerce. In fact, according to the Adobe Digital Index report:

“40% of revenue comes from returning or repeat purchasers, who represent only 8% of all visitors”

 Additionally, marketers must bring in 5 new customers to equal the revenue of 1 repeat purchaser.

Yet marketers are used to looking at isolated orders. The lack of easy lifetime value (LTV) data for lead sources has made it a blindspot when measuring if a campaign was successful. Ads are viewed as successful if they bring in immediate orders and that’s all.

That changes with SegMetrics.

With multi-purchase attribution, a customer’s entire purchase history is connected to the ad that attracted them or the emails they’ve received. You can start seeing whether certain campaigns were more likely to bring in valuable repeat buyers or if they were all just one-off buyers.

The SegMetrics Way #2: Compare how each cohort performs

When looking at longer term data in other tools you usually only get bulk averages. In SegMetrics you can choose how you want to break up the data, such as by the lead source or the product they purchased. That way you can easily compare the lifetime value of different groups.

3) See where your refunds and cancelations came from

Returns are expected for many ecommerce businesses, it’s just part of how it goes. So you might know what percentage of orders ended in refunds, but do you know where those orders came from?

An advantage of tying revenue to sources is you can compare data such as refund rates.

With SegMetrics you can compare the refund rates, revealing if there is a customer source that is particularly flaky. You can also compare how actions such as offering an alternative sizing guide affect the refund rate weeks later.

Your return on ad spend (RoAS) will also account for these metrics. You are able to see your ROI based on collected revenue, not just order value.

The SegMetrics Way #3: Automated refund reports

SegMetrics will tie all the payment transactions, refunds and cancellations back to the contact data, again without any additional code required. You can filter the data by any of the contact data in the Collections Report, to see how much of your sales revenue turned into collected cash.

4) Metrics for testing retention optimization

Maybe you have been wondering whether your customer newsletter really leads to more sales. Or if those past customers who used a sales coupon would have actually bought your new item at the full price.

Tools like email platforms typically only report on whether activities lead to an immediate sale. They are unable to see the impact that they have on behavior weeks or months later.

SegMetrics let’s you perform retention optimization tests and measure the impact on LTV.

You can compare aspects like the revenue from customers who have been through separate email series, or even if customers who received your premium packaging were more likely to buy again.

The SegMetrics Way #4: Analyze your top, middle or bottom of funnel

You can look at the data on any funnel stage in SegMetrics by using the contact tags in your email platform.By filtering and SegMenting the data using contact tags, you can compare details such as how the customer value compares for people going through two completely different funnels.

TL;DR Use SegMetrics to look past short term metrics

By connecting up the data from your ad platforms, email system and payment provider, SegMetrics lets you analyze how your marketing impacts the customer history and collected revenue.

You will be able to dive into details such as:

  1. Report on every dollar of revenue
  2. Find your source of long term customers
  3. Match your marketing to your refunds
  4. Test ideas for optimizing retention

Keith Perhac

Founder @ SegMetrics

Keith is the Founder of SegMetrics, and has spent the last decade working on optimizing marketing funnels and nurture campaigns.

SegMetrics was born out of a frustration with how impossibly hard it is to pull trustworthy, complete and actionable data out of his client's marketing tools.

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