Any company not leveraging their own data to make business decisions is at a serious disadvantage in the Internet economy. There are countless examples of data driven businesses becoming leaders in their industries, and any company that hopes to achieve that goal should incorporate data-driven decision making into their day to day life.
For eCommerce and Online businesses it is much easier to measure and analyse data by the use of advanced technology, Data driven tools and Data Crunching software as everything is measurable when it is digital.
It is now very important for Online Retailers to understand their customer and segregate them at various levels (Demographics, Spending Power, Buying Pattern etc.). This segregation helps in targeted marketing resulting in overall growth and increased margins.
Similarly different Key performance Indicators or KPI’s should be used to measure data to develop a pattern which ultimately serves in identifying the roadblocks at various levels. Basic KPI’s such as Sales Key Performance Indicators, Marketing Key Performance Indicators, Customer Service Key Performance Indicators etc are a must have.
After setting the basic standards, Online businesses should look to dive more deep into data for understanding important analysis like Customer Retention, Customer Experience, Incremental Sales, Average purchase value, Product relationship etc
RJMetrics, a Philadelphia based Business Intelligence software startup helps eCommerce and Online companies to understand their data needs. Founded in 2008 by two colleagues, Robert J. Moore (the ‘R’) and Jake Stein(the ‘J’) at a private equity and venture capital firm, RJMetrics provide SAAS based BI or hosted BI software and is competing with Tableau Software, GoodData, Domo and others in the same space.
Still RJM has managed to break the ice and has secured $6.5 million in funding up till now including the latest round a week back.
Iamwire caught up with the Founder, CEO, Robert J Moore for his thoughts over use of analytics and data and necessity for these services for Online based businesses.
What is RJMetrics? What problem does it solves? Which all industries does RJM cater to?
RJ Metrics helps online businesses make smarter decisions using their data. We do this through a powerful hosted data warehouse that powers an online dashboard, which our clients use to extract deep insights from the data. We’re currently focused on online transactional businesses, specifically within the online retail and SaaS verticals.
How important is analytics for e-commerce Cos? At what stage Online Companies should start thinking about analytics?
Analytics are the lifeblood of the modern e-commerce company. From marketing to merchandizing, data-driven strategy is the only way to ensure cost effective growth and predictable revenue in e-commerce. Companies who are at pre-launch, should identify which metrics will matter to their businesses, and what data should be collected in order to make those metrics available.
Where do you find, Cos face issues/challenges in starting / implementing an analytical function?
Recruiting the necessary talent to implement and interpret analytics has been a big stumbling block for companies. Now analytics based products have significantly lowers the barriers to building an analytics-driven enterprise.
What else do the companies (Cos) need, other than Software for a successful analytics function?
Companies need to be willing to incorporate data into their everyday workflows and decision-making processes. No amount of metrics can help a company that doesn’t actually use them to make smarter decisions.
What is key consideration they must keep in mind before thinking of analytics?
Data collection is critical, which is why it’s important to get started as early as possible. When in doubt, store as much information as you can about your customers, your prospects and their behaviour.
On which key areas should Cos learn using analytics?
Analytics can provide deep insights into customer lifecycle metrics such as customer lifetime value, cohort analysis, churn rate and repeat purchase probability. All of these metrics are critical to understanding the true value of your customers and the strategies that will allow you to grow profitably.
Can you specify 2-3 analyses that MOST of the companies miss and are very important? Also if you can highlight some important analysis and its use for e-commerce companies as example?
1) Repeat purchase rates: many retailers don’t consider incremental purchases when thinking about the value of new customers. This can change customer acquisition models substantially.
2) The correlation between engagement and purchase probability: understanding how user interactions with your website correlate to purchasing behavior can help you encourage the right activities among your users to drive future sales.
We’ve built a site called cohortanalysis.com that provides a number of great examples of how cohort analysis can be used by e-commerce companies to make smarter business decisions.
Most of the companies start their analysis program with hunting for technology to do it? Is this the correct approach? How should a they approach its program, what are the steps involved?
This can be a common misstep. Instead, I would recommend that companies try to write down the exact problem that they are trying to solve. This will make it easier to compare different product offerings, and ensure that a real problem is being solved.
Who are your competitions, or other similar software’s available in market? What advantage does RJM brings as a technology / Model for Cos over other software’s available?
Our main competitor is an inhouse analyst, who is calculating metrics using SQL and Excel. We offer tremendous advantages in terms of cost, reliability and scalability when compared to this others.
Are their some ready ecommerce analysis frameworks available?
Out of the box, we provide a standard set of best practices that have been learned from industry leaders at hundreds of online companies. This is a proprietary blend of metrics that is constantly being updated to reflect the state of the art.
What is the typical Cost of Owning an Analytical function for online Cos? On what factor does the cost vary?
There are several products which allow this cost to drop considerably, because a full time analyst or data scientist is no longer a necessity. At RJ Metrics our package start at US $500 a month and scale upward with the number of customers that our clients have. That way, our clients only pay us more when they become more successful.