Leverage your customer insights to find hidden opportunities

Understanding your customers is a key to growing your Shopify business.

Done correctly, you can convert customer data into information about their behavior and preferences. Then you can use that to better tailor your store and products to them, letting your customers help you succeed.

Since there are innumerable different customer behaviors you can measure, oftentimes you'll need to figure out one or two metrics to start tracking. I like picking two metrics to focus on, that why you have more options without getting overwhelmed.

For new Shopify stores I'd recommend:

• Average Order Value
• Repeat Purchase Rate

For stores with at least three years of operating data:

• Customer Lifetime Value
• Average Latency

For stores who struggle to keep customers:

• Repeat Purchase Rate
• Customer Lifetime

You might fall into multiple groups or have your own pair of metrics you'd like to track. Whatever you choose, pick two metrics to get started.

Now you'll want to calculate how you're performing in both metrics for the current year, current quarter, and overall. You'll also want to grab some historic metrics: last year, last quarter, and this quarter last year.

Take your time with the calculations (or use my app). You want to make sure you have the correct values, otherwise you'll end up on a wild-goose chase and misoptimize.

Once you have your performance (and not before), it's time to read up on each metric to understand what they mean. Use the links above and search for how other businesses use each metric.

Your goal is to deeply understand what the metric is telling you and what it can't tell you.

Finally, the customer insights portion. Using each metric, benchmark your store:

• against any industry-wide figures (least useful)
• against other stores
• against yourself (most useful)

If you're under-performing, use your research to try to figure out why. What's different about your business, marketing, or customers that causes them to under-perform?

If you're over-performing, also ask yourself why. You need to make sure you don't lose your advantages.

You should aim to have one or two ideas on what you can do in order to improve. They don't have to be perfect or a major project, even something simple as changing your free shipping threshold might be all you need.

This process can help you understand how your customers are behaving and begin to have ideas on how to improve it. You have to do it regularly. Re-calculate how you're performing, benchmark your store, and then question why you got those results. Skip a step or ignore part of it and you'll risk long-term failure

And if you want help doing this along with advice on benchmarking, Repeat Customer Insights can automatically analyze many customer metrics coming from your Shopify store.

No matter what your metrics tell you, look at them as opportunities for you to improve.

Eric Davis