While there are countless types of online businesses and an infinite number of product categories, there's one common goal that every e-commerce owner shares: to make more money.
Let's go over a few ways that you can actually get this "making more money" thing done!
While most of us use the term "churn rate," it's shocking how many different definitions for this data point there are floating around.
We enjoyed Shopify's take on this:
Unfortunately, churn rate is actually an extremely important metric. Why? To put it in modern startup terminology, churn rate is an ideal actionable (non-vanity) metric. As Eric Ries describes in his classic blog post, understanding your company metrics at a customer level is key to understanding the effects of your actions. It is your customer level metrics that will inform you if you are currently on a path to profitability, or if your current profits are sustainable. And at the heart of customer level metrics is churn rate: the measurement of the likelihood of your customer to become an ex-customer.
Read more over on the Shopify blog.
A week after launch, we have already added a great new feature: Filters.
In a nutshell, filters will let you break down primary data sources into component parts. Our first filter (with many more to come!), lets you pull out new customers vs. old customers from a data source like revenue, sales volume and discounts. We felt this was a critical data point to pay attention to for e-commerce business owners, as seeing trends in those customer groups is very valuable when making marketing decisions, choosing who to you should send special offers to, or launching email campaigns.
Large businesses have always known the value of business intelligence in making decisions and Sum(All) is making it possible for small businesses to tap into these metrics in order to make smart, profitable decisions.
The short answer is that it depends. Having both are critical to your business, but depending on the nature of your business, margins, and target market, the focus on customer and revenue may shift in priority.
If your product is a high margin niche product (e.g. airplanes), then a few large customers who drive a lot of revenue will suffice to sustain your company's cash flows.
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