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Is It A Good Idea To Outsource Your E-Commerce Customer Analytics?

When ecommerce businesses are asked about how they used their collected data and analytics, there seems to be a disconnect. More than half of the Fortune 500 companies deploy data analytics to understand their user behavior and user experience. Most of the small and mid-sized companies haven’t fully taken advantage of this field yet. A Forrester study found that 44% of B2C marketers are using big data and analytics to improve responsiveness.

Most of the e-commerce businesses use Google analytics that helps them generate plenty of reports; on the basis of these reports, they are able to form personalized strategies that help them connect with customers and understand them in a better way.

Most of the businesses do not know how to correctly use these reports to address the weaknesses in their business models. Small business owners also believe that they might have to hire data science experts or companies to analyze their customer analytics and then collaborate with the marketing teams to develop strategies. Such strategies can be used to address the issues that the website faces including bounce rates and traffic patterns. The data scientists or a data analyzing company would specific customer behaviors on the commerce websites that would be able to help solve the problems better than the humans can.

The truth is that any business, no matter how big or small, can take advantage of the data analytics and ramp up their customer base. It may also mean contracting with the service that has data scientists and the right tools to develop models and methodology to boost customer sales and make recommendations to the business regarding their business needs. They would also be able to help the business develop techniques to boost conversion rates.

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Outsourcing the data analytics for your ecommerce business depends on many factors that you should ask yourself:

  • Is the data analytics the core competency of your business? For most small ecommerce businesses, data analytics are not the core competency of the business. So it makes sense for most ecommerce businesses to outsource their data and customer analytics instead of hiring in-house recourses and increasing the fixed costs of the business.
  • Who can do the better job at it? You or a company that has the expertise to analyze the customer analytics? If you don’t possess the necessary skills it is probably better to outsource it. Keep in mind the quality of the product, communication, process and the timelines when you’re choosing the company to outsource your customer analytics to.
  • Are you protected by a contract? Clear service standards should be set with indemnifications for the breach of contract if you’re outsourcing the service. The pricing should be outlined and all the risks should be covered by the contract.

Let’s now discuss the reasons why and when a business should outsource their e-commerce consumer analytics:


If Your Business Is Growing Really Fast:

If your ecommerce business is expanding really fast and it is getting difficult for you to keep up, outsourcing would be the right solution for you. We’re living in a digital age where a product or service can go viral within the matter of hours and your business would increase exponentially. Outsourcing your customer analytics would bridge the gap between an ecommerce store to a serious online good supplier.

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You’re Looking To Expand But Not To Hire:

If you’re ready to scale your business but do not want to develop the infrastructure, outsourcing is the best solution for it and outsourcing comes at the fraction of the cost of having full time employees. There are several data analytics companies that have the expertise to automate your processes. There are plenty of services and companies out there in the market to cut down your growing pains. You just have to hire the right one.

Access To Skill In Short Supply:

Data analytics is a skill in short supply. It is a well-known fact that the professionals that hold an expertise in advanced data analytics, big data and data science. Outsourcing the work to these companies can bridge the gap between the expert level. Of course, when we speak of reasons why you should outsource your ecommerce data analytics, we must also mention reasons why you might not want to opt for it:

Con: The Risk Of Choosing The Wrong Provider:

“Vendor selection could be daunting with many touted ‘best in breed’ technologies,” says Alison Close, research manager of finance and accounting, BPaaS, and analytics services at International Data Corp.

“While cost is obviously a major factor in the vendor selection process, cultural fit and alignment of teams plays an equally important role.”

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Companies expect much more strategic and high-touch partnerships today where resources are well versed in every day operations and the communication channels are effective.

Con: Losing Control Of Data Storage And Of Analytic Models:

“For insight as a service, the customer has typically given the data to the service provider in order for the service provider to give the customer back the answer,” Ring says.

“In this model, the customer never owns the logic or the algorithm. Consequently, when the customer exits, all that is owned is the data and the recommendations, not the models, approaches, framework or configuration.”

Companies that are outsourcing customer analytics might face concerns about where their data is being stored and the safety of the data. The business might also lose control over the analytical models that they follow once the customer data analysis is outsourced.

Wrapping It Up:

Choosing whether to outsource your customer analytics is based on the above factors. You have to weight in pros and cons before you make the decision that will play a major role in determining your ecommerce business’s growth and development in the future.

Sohail RupaniAbout the Author:Sohail Rupani is a Senior SEO Strategist for an Orlando SEO Company He specializes in SEO and SEM techniques. He is passionate about technology and loves to analyze the tech industry in his spare time and stay in touch with the latest happenings. He also writes technical articles about SEO and digital marketing. Visit our website for more details.

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