Browsing CustomerIt used to be that, when it came to marketing metrics, there was only one that mattered: purchases. A purchase, after all, means revenue. It’s trackable, traceable, and attributable. Other metrics? Not as much. But the new metrics (and mindsets) arising from e-commerce have given us a genuine appreciation for “non-purchase” activities as well.  Even if non-purchase behaviors don’t track to immediate revenue, they do provide us with something that can be equally as important: clarity about our customers. In its latest Ecommerce Quarterly (EQ1 2014) Report, Monetate highlighted some of these non-purchase behaviors and translated those statistics—like traffic, page views, bounce rates referral traffic market share—into an increased understanding of a customer’s context and behaviors. While many of these metrics are now well understood by e-commerce experts, it’s worthwhile to take a step back and put all of these (and other) non-purchasing metrics into their proper context. Whether it’s contacting customer service, interacting with a brand on social media, or checking out product ratings and reviews, these types of metrics help us get a clearer picture about who’s doing what (and why). That can have an impact on our business in two ways:

  1. These behaviors are often precursors to purchasing.
  2. Even when they’re not precursors to purchasing, they’re strong indicators of a customer’s potential value.

Having that data gives you more insight into which customers are the right customers for you to invest in and which products you need to invest in to better serve those customers. For the marketer, that’s a welcome development. It’s also a welcome development for the CFO, because it means marketing is building a more valuable customer base.  All of these are key “building blocks” in creating a customer-centric business strategy—something that would be hard to do if you only look at aggregate purchasing.data. But as we move toward a greater acceptance of (and reliance on) these metrics, it’s important to recognize that there are limits in collecting and leveraging too many non-purchasing metrics.  There is a fine line between those that can be useful (for the reasons stated above) and those that are just “nice to know.” After all, e-commerce websites aren’t around to simply create community; and generate reams of data for the fun of it—they’re around to foster activities that will indeed lead to purchasing (and overall firm profitability). The real skill for an e-commerce firm is figuring out early which non-purchase metrics are—and which ones aren’t—genuine indicators of purchasing and long-term customer value. Download EQ1 2014 Now Peter Fader is the Frances and Pei-Yuan Chia Professor of Marketing at the Wharton School of the University of Pennsylvania and the co-director of the Wharton Customer Analytics Initiative. His expertise centers around the analysis of behavioral data to understand and forecast customer shopping/purchasing activities.