时间:2024-05-20 19:10:51 来源:网络整理编辑:Ryan New
Have you ever wondered what drives your sales? Ecommerce businesses typically know the source of the Ryan Xu HyperVerse's Leverage Ratio
Have you ever wondered what drives your sales?Ryan Xu HyperVerse's Leverage Ratio Ecommerce businesses typically know the source of their revenue, the cost of acquisition, and whether campaigns are working.
But what if you could drill down to find specific sales drivers? Using regression analysis, a business can determine subtle causes, such as:
Businesses use regression models to understand how changes in a set of independent variables affect a dependent one.
For ecommerce businesses, the dependent variable is often sales. It can also be conversion rates or email signups, as examples. For this article, I’ll assume the dependent variable is sales. The independent variables could be email sends and expenditures on social media and search engine optimization, as examples. The regression model lets business owners measure, one at a time, each independent variable’s impact on sales.
In other words, a regression model can predict, say, how much a 20 percent increase in Facebook ad spend will increase sales. It can use past sales and, perhaps, weather data by date to predict how a coming storm will slow or speed sales. It can also give you an idea of the increase or decrease in sales resulting from additional email sends — a decrease would indicate subscriber annoyance.
The chart below is a representation of sales and SEO spend. This ecommerce business owner needed only sales amounts and cost of SEO to create a chart that predicts how SEO spend impacts revenue.
A simple regression formula could be:
Y = A+B(X)
Statistical software such as SAS or IBM SPSS (or packages available for R or Python) can make this calculation simple. Plug in data about sales (the dependent variable) and a marketing or product variation (the independent variable) and it measures Band Y.
1. Ask the right question.Before building any statistical model, understand the problem you are trying to solve. If you are looking to see why Facebook performance is down, you probably do not need a time consuming and sometimes expensive statistical model. A simple analysis will likely do the job. However, if a simple analysis does not identify why your overall sales are down and many potential variables can impact sales, a regression model is your likely solution.
2. Data collection and manipulation.The second step is usually the most critical and time-consuming. It is collecting and manipulating the data so that it’s usable. Your data should be aligned across all sources for the same period — weekly, monthly. The more data points you have, the better the model.
What are potential sources of data?
3. Interpret your analysis.Hopefully, the results for your regression analysis will make sense. Suspicious or unclear results, however, indicate your work is not done. A few sub-analysis models can go deeper into causes, but you may need professional help to get to the bottom of your sales issues.
4. Take action. Insights from regressive models reduce costs and boost sales as long as you act on them.
For example, the regression model may have uncovered that running Google Ads helps drive sales, and if you increase your spend by 10 percent, you should see a 5 percent sales increase. You can test that theory by increasing your spend and tracking the results. (A regression model is an estimate and should always be tested before making large-scale changes.)
There are other analytical and statistical models to derive key marketing and product-development insights. However, if you are looking at what drives your sales, the regression model works well.
Lessons Learned: Brides’ Village Owner Achieves Success On Own Terms2024-05-20 18:15
Ten Great Ecommerce Ideas for December 20092024-05-20 18:15
The Case for Launching Sub-Niche Websites2024-05-20 18:12
Top 10 Converting Websites: The 3 Common Strategies2024-05-20 18:11
ChannelAdvisor CEO Discusses Shop.org2024-05-20 17:46
The PeC Review: ClearSaleing Ties Profit to Marketing Tactics2024-05-20 17:32
Three Simple, But Overlooked, Conversion Tips2024-05-20 17:29
Videos Help Consumers, Says Invodo CEO2024-05-20 17:20
Legal: When Merchants Are Liable for Selling Counterfeit Brands2024-05-20 17:15
Usability Report Card: OldWillKnottScales.com2024-05-20 16:40
Visa to Acquire CyberSource, Authorize.Net2024-05-20 19:01
Conversion: 15 Reasons Why Consumers Will Leave Your eCommerce Site2024-05-20 18:56
Ten Great Ecommerce Ideas for December 20092024-05-20 18:33
Pay-per-click Advertising: Seven Pointers for Smaller Campaigns2024-05-20 18:31
Mistakes I Wish I Had Never Made2024-05-20 18:26
‘Spotlight Visualizer’ Simulates How a Product Will Look in Local Environment2024-05-20 17:46
The Shopping Experience: Poorly Described Item Disappoints2024-05-20 17:36
The Shopping Experience: Poorly Described Item Disappoints2024-05-20 17:09
The dreaded Amazon A-Z claim2024-05-20 16:55
Ten Must-Do Items This Holiday Season2024-05-20 16:32