The data driven e-commerce framework

A blueprint for e-commerce according to a lean analytics framework

What is Ecommerce Marketing?

A super cool description of marketing that has always stayed with me is the following. I think this describes marketing in its “ core function ”;

Marketing is about selling more stuff to more people more often for more money more efficiently.

In other words, marketing is selling more products more efficiently to more people for more money per customer.

You may find this too basic. If so, I ask you to think about it again. Marketing is definitely this.

I also see marketing as a data-driven profession. They call it Lean analytics, something I often refer to myself.

If you have the right data, then you know exactly what to do, when and how.

Of course there are a number of things to consider here. A number of elements from marketing specifically for e-commerce that I am going to tell you in this article.

If you prefer to have the document in PDF, download it below.

Marketing is about selling more stuff to more people more often for more money more efficiently.

Lean analytics (data driven marketing)

Lean analytics is following a framework in which you make choices based on data. Without this data, the choices you make are unfounded and more of a gamble.

Of course you can gamble well, but it is much more interesting to make well-founded choices.

Making sure you make targeted choices allows you to do short 4-6 week sprints toward small goals that are all toward your big goal.

This has to do with your so-called True North and One Metric That Matters. More on this later.

You should already have a product that makes people fall off their seats. A product that offers so much value to people that there is no choice to take / purchase it.

true north

But I don't have a product / service yet

Then you have to find it first.

When explaining lean analytics to people, I always start with an anecdote, something I like to do.

In my previous life I guided people in creating a healthy lifestyle. I always used Maslow’s theory for this. No, not that pyramid, that’s Pavlov, Maslow is from the following.

If you are not aware of what you are doing wrong, then you do not know that you are doing it wrong because you are not aware of it.

If people are aware of what they are doing wrong, they can make a conscious choice to adjust it.

They then have to consciously make the right choices for a very long time to obtain a pattern so that they can let go of the conscious and unconsciously do it right.

This gives the following stages;

  • Unconsciously incompetent
  • Consciously incompetent
  • Consciously competent
  • Unconsciously competent

In marketing we have exactly the same phases and it is the phase where you have a unique product that solves an unknown problem for people known as the golden egg.

If you have this, you can start creating a framework.

The e-commerce framework

Many different frameworks exist. There is the traditional funnel, the pirate funnel, but also the lean analytics funnel. I myself am a great supporter of the latter, although they all come down to the same thing.

The funnel shows all facets that you can use. The following stages exist;

1 | empathy phase
The phase in which you determine what kind of product you are going to launch. This is probably a phase that you have gone through unconsciously.

The great idea you got when you were walking or driving in the woods.

I have described this in detail above at “I don’t have a product yet”.

2 | stickiness phase
You have found a product that is going to help a large group and it gets noticed. So you have come into the field of interest of a large group and they are stuck. The great thing is that this group is already buying.

3 | viral phase
You convert the buyers into true fans. In other words, the users will start sharing your product and you will receive so-called “ambassadors”.

4 | turnover phase (customer lifetime value)
Do you remember the quote from what marketing is?

Marketing is about selling more stuff to more people more often for more money more efficiently.

The goal with a lot of e-commerce is whether to reach the viral phase, or the revenue phase and even better, both.

5 | scale up phase
The phase in which the start-up progresses to scale-up. The teams are getting bigger, the turnover is higher, the customers are multiplying and big players are coming into play.

The phase that you go from start up to established company. Please note, many companies think too quickly that they are in this.

Consciously incompetent

The growth framework

Steps 2, 3, 4 and 5 are the so-called growth phase, better known as the growth framework or growth hacking. Two terms that are gaining more and more ground.

Now it is not the case that every type of company goes through these phases before they are a scale up. Every e-commerce company is different. For example, you can imagine that an e-commerce company in the window decoration attracts another customer with a different “Annual Repurchase Rate” than an e-commerce company that is in the masks.

You can roughly distinguish 3 types of e-commerce and which one you are determines the route you take on the framework and the metrics you are going to measure.

What kind of e-commerce company do you have?

As you have just read, there is an essential difference between the different e-commerce companies.

Below I give you the 3 flavors;

1 | acquisition model
The acquisition model is for e-commerce companies that need to attract many new customers. The product is not quickly bought again in the same year (Annual Repurchase Rat) or there is no variant of the product.

2 | Loyalty model
The loyalty model is for e-commerce companies that should not attract many new customers. The product is often bought again in the same year or there is a variant of the product that the consumer also wants.

3 | Hybrid model
The hybrid model provides the middle ground between the acquisition and loyalty model.

How do you determine what you are in with your e-commerce business? Very simple, you can calculate it.

You are in the acquisition model if both or one of the following two statements is correct;

  • Less than 40% of your customers buy again in the same year.
  • 1-15% of your customers buy again in 90 days

You are in the hybrid model if both or one of the following two statements is correct;

  • Between 40-60% of your customers buy again in the same year.
  • 15-30% of your customers buy again in 90 days

You are in the loyalty model if both or one of the following two statements is correct;

  • More than 60% of your customers buy again in the same year.
  • More than 30% of your customers buy again in 90 days
E-commerce model

True North and One Metric That Matters

You understand, I assume that the metrics (the variables) that you want to measure whether your product is a success is different for each model.

With the acquisition model you can focus on “Transaction Rate” or “Sharing Rate”, but with a loyalty model that is, for example, “Returning rate” and “Customer Lifetime Value”.

These metrics are all in line with the so-called True North. A term that is widely used in growth hacking and lean analytics.

Your True North is the big goal of your company. In many cases this is more turnover. I can tell you a lot more about this, but for the purpose of this article that will only create confusion.

The metrics that you will measure using your model go under the name “One Metric That Matters”. So this is the one metric that matters right now to achieving your overall goal.

You understand that you can only achieve this if you know what your goals are, but more importantly, if you have your data in order.

Your True North is the big goal of your company. In many cases this is more turnover. I can tell you a lot more about this, but for the purpose of this article that will only create confusion.

In short;

  • True North is the big goal of your business, usually in the form of conversions or revenue.
  • One metric that matters is that one variable which will be the measurable element in the coming sprint to determine what we do, is also correct.

Put everything together into a lean analytics e-commerce framework

You have already seen the word framework or model so often and that has a reason. In lean analytics marketing you don’t have to reinvent everything. Much has already been done at large companies and they have put all their plans into beautiful frameworks.

You only have to enter your own data and of course put it into practice. This involves all marketing aspects such as social media, seo, sea, copywriting and much more.

In short, you can use the following framework;

1 | determine where you are in the funnel (which I described earlier)
Once you’ve mapped out your customer journey, you know where things go wrong in the funnel. Are not enough eyes on your website or do people step out of the payment process?

2 | understand your user
Here you determine what kind of e-commerce company you are. If you already have data, you do this using data. In the case of no data, make an estimate.

3 | collecting ideas
With the first two steps you can start brainstorming ideas. use as many different types of people from your organization as possible to avoid a small “confirmation bias”.

4 | arrange the ideas
After a brainstorming session you have many new ideas, now it is time to arrange them. Basically you just make a selection of which idea you will implement in a test in the coming period.

5 | develop a test
You have to have some form of hypothesis. An idea in the sense of “If I… then happens…”. You can then develop the test and here other specializations such as social media marketing and SEA marketing come into play.

It is important in this phase that you clearly state what you want to achieve and when. This is data that cannot change once the test has started.

6 | to work
You are going to perform the test. This usually lasts around 4-6 weeks but can be longer or shorter for a variety of reasons.

7 | analyze the outcome and determine
You analyze the outcome and can come to 2 conclusions;

  • What you do works, so you are going to implement it
  • What you are doing is not working, so you are not going to implement it

In both cases, you took a huge profit.

You can then start the entire cycle again from point 3.

The grows process

Conclusion for the e-commerce lean analytics model

Data is perfect for determining what you are going to do and when you are going to do it. It gives you facts about your current situation and what you need to do to make a profit.

With e-commerce you have to keep an eye on what kind of e-commerce company you are. What mode are you in and what data do you already have available.

If you know this, you can use the growth framework to take steps. Every 4-6 weeks you will do a short sprint to pursue a “One Metric That Matters” that serves to reach the big goal “Your True North”.

Of course, with large organizations, several of these types of processes can run side by side.

Hi, my name is Jan Willem

Hi, my name is Jan Willem

I am always looking for ways to grow businesses through data-driven marketing. I do this freelance, but also as a coach and speaker.

In addition to these topics, I actually write about a lot of things that concern me, just because I think this is cool to do. Do you want me to tell you stories to create movement? Then just contact us by clicking on the picture.