Customer Behaviors: How to Track Your Best Customers
This is the third in a series of posts about e-commerce and beverage alcohol. The previous post provided an overview of the customer acquisition process, and the necessary metrics to keep track of your brand’s acquisition journey: Customer Acquisition: Understanding the Basics.
We previously discussed the process of attracting new customers towards your business and turning them from browsers to paying customers. Now that you are more familiar with how beverage alcohol for e-commerce works, and the different aspects of the customer journey, let’s dive into understanding your customers better and leveraging the benefits that e-commerce has to offer in analyzing customer behaviors.
Not all customers are the same, and as a result, customer segmentation and grouping based on their behaviors can release valuable insights. Tracking customer behaviors is an essential part of developing a targeted and effective marketing strategy, since you can group customers based on common attributes and interests that they possess, and develop your e-commerce strategy in accordance with their behaviors.
Why Are Demographics Important?
Demographic data is socioeconomic information, including age, gender, income, marital status and more. Gathering demographic data on web users and customers can be difficult, but is possible through surveys or third party tools, and can also be determined statistically through some web analytics tools, such as Google Analytics.
Understanding your customer’s demographic is an essential part of any business, because no matter what product or service you are trying to sell, the end goal is to increase your acquired customer base and turn potential browsers into buying customers, and thus you want to use data to optimize your acquisition strategies. For the beverage alcohol industry in particular, there are several demographic factors that not only play a huge role in deciphering your target market, but help you strategize on different aspects of your business. These include website design, the curation of images, the checkout process and overall promotion to understand what appeals to your best customers.
If your brand has a better understanding of where your customers are located, how old they are, whether or not they have greater access to mobile devices as compared with desktops, you will be able to hone in on who your customers really are, and understand how they search for information that leads them to your product. Since demographics are measurable characteristics, you can keep track of them over time.
Key Metrics: Establishing Your Own Baseline
Given that alcohol e-commerce has shifted traffic from traditional brick-and-mortar stores to online retailers and marketplaces, there is a wider variety of data points available to track the customer journey. Given that customer demographics vary so heavily, it is important to note that even though there are certain industry benchmarks for these metrics, it is preferable to look at a range instead of a fixed number, as behaviors will tend to vary. It’s important to put all these metrics into context as well. A number outside or at the ends of a range is not necessarily a bad thing or cause for alarm; these metrics exist to allow you to further think about your brand and online experience.
Bounce rates are a great example of an industry benchmark that tends to vary quite heavily. A bounce occurs when a user comes to your website and leaves without further interacting with the site. Benchmarks differ by website type, channel, device, landing page, so it is difficult to establish a baseline bounce rate. For instance, if a user lands on your product catalogue page as compared with your main landing page, their decision to stay on that page will differ based on the information they see. It’s possible that a bounce may be higher on a product page than a home page, because a user can gather information without needing to take any further action. Or it may be the other way around, depending on your website. Thus the bounce rate of your site can vary depending on what page a user lands on. Instead of asking yourself if your bounce rate meets the industry benchmark, it might be better to ask yourself if it compares to similar web pages instead. A general rule of thumb is to aim for a range between 26 percent to 40 percent, but it is important to set your own baseline in relation to your brand’s performance.
In addition to the bounce rate, using a shopping behavior analysis can help demonstrate where you end up losing customers, and which sessions actually end up translating into a transaction. The add-to-cart rate, which is the percentage of items added to cart after product views, will also vary depending on demographic factors such as device type, as it is usually lower on smartphones as compared with desktops. Observing this rate will not only give you a better picture of how to improve your overall sales, but also identify your top-performing products and holdup in your checkout process. In general, an add-to-cart rate within the range of 2.7 percent and 8.6 percent indicates an average performance for a website.
In addition to these metrics, analyzing other data points like the most popular time of day your users are on your site, and the day of the week helps you tailor your marketing and promotions in accordance with your desired traffic.
Which Demographics should I be tracking?
Now that we discussed some different metrics, the next step would be to integrate demographic information to observe trends in customer behavior. Thirstie Access’s data solutions provide you with a wide variety of demographic information that can be leveraged in order to understand how different demographics portray different online behaviors throughout the e-commerce shopping process. With the help of web analytics, you can use this information to understand who your customers are, and what brings them to your site.
First and foremost, it is crucial to determine the type of users that are coming to your site and purchasing your products. Users are those who have initiated a session with your website for a specific period of time. New users are those who have never been to your site before, whereas returning users have visited your site before and are starting a new session. By segregating your users into these two groups, you can compare their behaviors across different levels such as the number of page-views, average time spent on the website, conversion rates, bounce rates, and so on. Analytics can really help you investigate the why behind why certain users drop off from your site, and others do not.
Factors such as age, geographic location, gender and the types of device used for the purchase are also key demographic indicators for alcohol e-commerce.
Age demographics help classify your customers under different brackets, and this allows you to gauge their familiarity with technology, how they perceive your marketing, and what their preferred mode of communication is. This gives you a good idea of how customers end up searching for your product and what influences their final decision to buy it. For example, research has shown that millennials portray lower levels of brand loyalty and respond to social media marketing and interaction at a greater level as compared with other age groups. Having information like this can allow you to predict customer’s online behavior better.
Gender plays a key role in determining your customer base as well, because there are not only differences in e-commerce behaviors across genders, but also the type of alcohol consumed. Research has shown that about 43.2 percent of female respondents claimed wine as their favorite alcoholic beverage category, while 39.3 percent of the male responders picked spirits / liquor as theirs. Understanding these different tastes and preferences will help you tailor your marketing strategies and make sure that your brand appeals to its target audience.
The type of the device really determines the way in which users interact with your website, since there are variations in screen sizing, resolution, display and so on. By segmenting your users through device categories, you can analyze your traffic better and how it impacts the outcome of the visit. For example, the U.S e-commerce conversion rate for desktops was 2.1%, while it was 3.32% for tablets for the second quarter of 2020. Key metrics like the user conversion rate, bounce rates, average order value and pages per session can give you a better picture of how your customer journey can vary by device type. According to the 2019 E-commerce Year in Review, 65 percent of all e-commerce traffic was driven by mobile devices. If the majority of your traffic is mobile, you have to make sure that your product images are clear, and that your site is easy to navigate through. Information like this is extremely important in making sure that your audience is viewing your website in a way that speaks to them, and makes their decision making process easier.
Beyond Demographics: Building Personas
Marketing personas are used as an essential tool in marketing to capture more than just your target audience’s demographics, but also their motivations and key characteristics that help you better envision a customer. If you currently have a strong customer base, you can establish common characteristics into a persona that will help go beyond simple demographic information. For example, if you are aware that the majority of your customers are geographically located in the state of California, then building a persona will help you gather information regarding whether they live in an urban area versus the suburbs, how much income they make, their hobbies, and so on. This way, you have a better understanding of how customers spend their money, and you can improve your marketing efforts to help reach those particular audiences.
Knowing your audience will help you pick which demographics to target with your ads, and how to frame your marketing strategy. A future blog post will go into details about different ways to track your audience using UTM parameters, and various social media pixels.
