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There’s no way around it: Customer acquisition is expensive. According to an Econsultancy survey, just 22 percent of digital marketers and e-commerce professionals are satisfied with their conversion rates. And boosting those figures is easier said than done.
Businesses have long applied anomaly detection to surface potential glitches and incidents. Anomaly detection – a data mining technique that identifies outliers in data in order to illuminate insights – goes beyond damage control. It has the capability to also spot opportunities, especially in conversion rates. When done manually, however, it’s humanly impossible to keep up with the sheer quantity of data that businesses currently manage.
The advent of augmented analytics, a disruptive wave of AI-based analytics techniques, is transforming the way the world is monitoring and understanding data. For one thing, AI-based anomaly detection delivers results in real time. It’s autonomous. And it’s scalable. By adopting AI-driven anomaly detection, you gain six key capabilities for increasing conversion rates.
1. Preventing conversion-killing glitches
In the high-speed e-commerce environment, glitches are a fact of life. But that doesn’t mean you can’t control their impact.
One study found that 36.3 percent of critical e-commerce bugs are payment-related. Even if a glitch impacts only a small subset of your customers, it can significantly affect your revenue.
Manually spotting small glitches in massive e-commerce data is statistically unlikely, no matter how talented the employee. It often takes teams days or even weeks to locate the incident and the source.
Recruiting the help of AI-driven anomaly detection makes it exponentially easier to discover issues and identify root causes. AI and machine learning technology learns how your KPIs normally behave to spot anomalous behavior. Best of all, there are solutions trained to do this automatically and in real time. This cuts down on time to detection and time to resolution, so small problems don’t become catastrophic.
By preventing glitches early on, you create the smoothest possible customer experience and avoid losing sales opportunities.
2. Avoiding downtime across e-commerce sites
Every year, analysts release reports explaining just how costly downtime is for businesses. Generally speaking, downtime costs organizations $5,600 per minute and well over $300,000 per hour. But for an e-commerce business that relies entirely on uptime, those numbers can be significantly higher.
And yet, downtime is often one of the most overlooked problems in conversion rate optimization. Downtime isn’t just something that major brands experience during the holiday shopping season. It’s a year-round issue that must be proactively addressed in order to maximize conversion rates.
Anomaly detection helps you avoid downtime by continuously monitoring the performance of your e-commerce site. When an irregularity is detected, anomaly detection solutions alert you to the issue in real time. There are some solutions that actually correlate related anomalies and related events, as well as other contributing factors, to help you identify the root cause.
3. Detecting slow leaks in e-commerce revenue
Spikes in your churn rate are easy to notice. If you suddenly saw a 50 percent drop in purchases one day, you’d quickly take action to resolve the issue.
But what happens if you experience small, steady declines for a short period of time? It’s easy to miss a steady sequence of one-percent drops in e-commerce purchases that occur over the course of a day or a week. If not detected early, these declines can accumulate into the same losses as widespread outages.
Whether small leaks are the result of business process bugs, unsuccessful marketing campaigns, competitive forces or ineffective UI/UX changes, you need to be able to accurately assess granular trends in time-series data.
The right anomaly detection solution should capture a baseline of normal behavior for your e-commerce site. With that contextual data, the solution can surface small changes in performance. Anomaly detection based in AI can do this as soon as the leak starts.
Don’t wait for significant drops in conversion rates to take action. With real-time anomaly detection, it’s much easier to proactively prioritize and address issues of all sizes.
4. Capturing opportunities to increase revenue
Too often, anomaly detection is discussed in negative terms – eliminating glitches, avoiding downtime, etc. But it can also help you identify and capture opportunities to increase conversions and boost revenue.
One example is in monitoring marketing campaign performance. Let’s say you’re running a campaign for a particular product, and anomaly detection indicates the campaign led to higher conversion rates than past efforts. You could use that insight to double down and increase revenue.
This approach also works for social media. It’s difficult to manually track all social media mentions 24/7 (and their revenue potential). However, real-time anomaly detection solutions alert you to unprompted instances of positive buzz around your products. For example, if an influencer promotes one of your products on Instagram, you may need to be ready to fulfill an unusually high number of orders for that product. Time is of the essence because a missed opportunity is lost revenue.
The faster you can act on positive social media activity, the more you can increase conversion rates and revenue.
5. Understanding your business ecosystem
You can’t measure conversion rates in a vacuum. In reality, e-commerce conversion rates depend on your other key performance indicators and how you pursue your business goals.
Traditional KPI analysis doesn’t automatically gather and correlate metrics to create a holistic picture of your business. AI-driven anomaly detection breaks down silos in your business and learns the complex patterns between metrics, such as seasonality, related events, and signal types.
When you can visualize your business as a whole, across departments and data silos, you can better understand how a variety of factors play into conversion rates and revenue.
6. Correlating anomalies in social media data
One of the greatest challenges for any business is dealing with dirty data results. According to Gartner, poor Data Quality costs the average company $15 million per year.
One way that bad data impacts your e-commerce business is by reducing the effectiveness of marketing activities. CRM data can quite easily be entered incorrectly. Contact profiles can get left unchecked for far too long. This issue is made worse by the fact that many marketers can’t correlate CRM data with customer social media activity. Social media monitoring becomes ineffective when you don’t have the proper insights into changes in demand and sentiment around your products.
Correlating anomalies in social media data with your internal data will help marketers and sales teams create more personalized messages and offer relevant promotions.
Behavioral trends among your e-commerce customers change rapidly. And with anomaly detection correlated across social media, you’re able to keep pace with market trends and gain a clear advantage over your competitors.
The Importance of Anomaly Detection
Your goal should be to take a proactive approach to customer acquisition. Doing so requires the ability to act quickly and respond to consumer demands effectively.
It all comes down to generating real-time, correlated insights into e-commerce consumer behavior. When you have these at hand, you can maintain competitive advantages rather than falling behind other e-commerce sites that are capable of seizing profitable trends.
Don’t leave conversion rate optimization entirely to things like design, copywriting, and technical website improvements. Take advantage of your data collection with AI-driven anomaly detection and capitalize on trends as they happen.