Magento is an awesome platform not only for selling stuff, but it’s also a great tool to learn more about your audience, their tastes and behavior.

Even though Magento is not a dedicated analytics platform, it uses a decent Magento Reports system that collects, analyzes, and displays the most interesting data about who your customers are, what they do on your site, and what they buy.

It’s a nice addition to other marketing channels such as social media and web analytics.

Key Magento Reports You Need to Understand

Magento metrics reports offer a decent amount of data. They are not the prettiest by any means. Nor do they create any visually appealing graphics for you to see. But even though Magento 2 shows almost exclusively bare numbers, this data still offers insights for an inquisitive Magento store owner.

From average order amount to seasonality, order stats offer an interesting overview of when your shoppers are most active, which items they look at the most, and which they actually buy.

Take a long look at what your customers view most often and what they actually buy. Compare these two groups between themselves. Are there a lot of similarities? Make your bestsellers more visible. Move them to the spots which are now occupied by your most viewed items.

You should also take a closer look at how your customers search at your store. Do they find what they are looking for quickly? Are there any popular items that you see over and over again? Make them more prominent and place somewhere closer on the page.

These are the most impactful changes that Magento Reports can help you with. Once you are done with simple reports, though, let’s move on to Advanced Reporting to understand all the Magento metrics in there. Magento Business Intelligence offers you the opportunity to see all you data in one place. But is it worth the money?

Is Business Intelligence Just a Buzzword?

For the uninitiated, business intelligence is chock-full of buzzwords and marketing hype. For someone new to this field of knowledge, “customer-focused improvement analysis” doesn’t explain much about what BI does and how it can help their Magento store sell and grow.

If you feel you get lost in the meaningless jargon of these BI tools, we know how to help. BI is basically 3 things: Technology, Processes, and People.

BI Technology can be as simple as Microsoft Excel spreadsheets, manually filled in workbook entries, and homemade reports or as complex as an R-based data visualization, master data warehousing, and predictive modeling.

When we look at BI Processes, they range from simple data management tools to single-version-of-truth solutions, data-driven decision making suites, enterprise-wide KPI-based performance evaluation, and employee feedback systems.

One of the cornerstones of business intelligence is proper BI People management. Without the necessary data scientists, modelers, visualizations developers, and business analysts the collected BI data is hard to analyze and use to your business advantage.

At the top of this BI pyramid are real-time reporting, web data streaming, predictive analytics, and machine learning. So despite the marketing buzz, business intelligence consists of real tools and skills that experts have been accumulating for over 50 years. Previously business intelligence was just known under different names. The most popular were decision support systems (DSS) and management information systems (MIS) which described the same idea as BI: collecting data and using it to make decisions based on real life knowledge and not on intuition.

Does Business Intelligence Have a Place in Your Magento Store?

Okay, so let’s say we’ve convinced you that business intelligence is not just a buzzword and you should probably look into it. Let’s see what Magento has to offer those business owners who want to really work with their hard-earned customer behavior data.

Magento Business Intelligence is a rebranded RJMetrics toolset. The general public might remember RJMetrics team for their famous analyses of Airbnb, Crunchbase, ALS Ice Bucket Challenge, and Chatroulette that appeared in 2012-2014 in the Wall Street Journal and other popular resources.

In 2016 Adobe made an acquisition of RJMetrics to complement Adobe Experience Cloud with a strong business intelligence analytics tool. At the time Adobe was already in a race with Salesforce, Microsoft, SAP, and other business giants who were frantically collecting appropriate tools to build a comprehensive suite that would contain everything a business needs: from ERP to CRM to customer care to analytics to supply chain management.

Adobe had no time to develop a hugely complicated analytics system themselves. So in order to compete, they had to buy something off the market. RJMetrics was a good choice. It got integrated into Adobe – and later into Magento Advanced Analytics – and renamed to Magento Business Intelligence (aka Magento metrics).

Right now Magento BI comes either as a free add-on for Magento Commerce Edition customers or as a paid subscription for Magento Community store owners. It’s a powerful tool for analytics, BI, and reporting – offering insights into where your store needs to improve to sell more.

Magento Business Intelligence suite is not cheap. Magento BI Essentials starts as a flat $100/month fee but grows quickly based on your GMV or monthly Gross Merchandise Volume. Within the $5 million dollar range GMV though, you pay $100.

Magento BI vs Google Analytics and Magento Reports

An important question is whether Magento BI is the right tool for you. First of all, MBI is not the same thing as Google Analytics – although Magento BI uses Google Analytics data to complement their own Magento data silos.

Compared to Magento BI, Google Analytics works as a powerful filter (especially if set up properly) that can tell you a lot of valuable high-level data:

where your customers go (page views),

which pages they like and dislike (bounce rate),

which products they buy (transactions),

how they interact with your store (heatmap), etc.

Magento BI shifts the focus from user behavior to a purely business perspective. Instead of users, Magento Business Intelligence will show you different online shoppers, help you understand and segregate them based on a ton of new segments and even give advice on campaign management:

which products people buy on a regular basis,

what kind of customer lifetime value they have,

which groups of shoppers exist, how differently they behave from one another and how to work with each of these groups effectively.

Where Google Analytics only works with its own data, Magento BI collects from Google, ERPs (Salesforce, SAP, Microsoft Dynamics 365, etc.) and CRMs, and integrates with accounting and marketing tools either natively or through third-party extensions.

MBI offers ecommerce things Magento Metrics or GA are incapable of. The benefits will heavily depend on your business size, though:

MBI accumulates data into special data warehouses,

MBI transforms and visualizes data to make it easier to interpret,

MBI works with multiple data sources at once (GA, Mixpanel, AdSense, Facebook Ads, Zendesk).

In addition to that, MBI uses complex filter logic to create detailed reports – down to the individual level.

In contrast to Google Analytics and other online trackers that strictly forbid any elementary analysis of data (e.g. individual customer records or habits) and user identification, Magento BI can use any data to show interesting insights or even create personalized email lists for tiny customer groups.

Mobilizing Magento BI for Your Needs

Some data you have to work for to obtain. Other pieces lie on the surface waiting to be seen. Others still are hard to find and hard to analyze by a human. Unfortunately, the Reports section of your Magento store doesn’t exactly show actionable stuff.

You either have to export and compile reports together by hand or look at dozens of separate data pieces and create from them a meaningful picture in your mind.

Any business needs data to make informed decisions. The more data you have the harder it is to do. It becomes especially challenging when you need to work with data in cohorts. We’ve helped dozens of stores setup and customize Magento BI in a way that allows us to see more and act on this new knowledge.

Case 1. Increasing Google Ads Sales

Magento BI offers nice segmentation options. They provide insightful data – especially when they are based on key store events such as Checkout or Product View.

One of our customers, a smartphone store, uses this data as a good source of audience segmentation for Google Ads and email remarketing campaigns. Using a third-party extension, the store managed to target customers more precisely and improve Google Ads efficiency staying within the same budget.

Implementation results:

20% better engagement thanks to precise targeting,

10% more clicks on Google Ads,

+2% conversions for remarketing email campaigns.

Case 2. Seeing the Big Picture for the First Time

A major customer started to integrate data-driven store performance metrics into their business. The store tended to make a lot of sales during the holiday season. Traditionally, the holiday season is the biggest earner of the whole year in the US. From autumn to winter Halloween slowly turns into Thanksgiving and then right into Christmas.

The traditional strategy of the store was to entice customers with huge deals and discounts. In an extremely competitive environment some discounts slowly came to the point of zero margin.

So even though the volume was there, the actual revenue was low-to-none. In order to escape this vicious circle, the store needed our help to see that:

during the holiday season new customers buy on discount and seldom return,

regular customers make 30% more purchases and remain loyal to the store,

deals and discounts attract the wrong crowd where it’s hard to make a good profit.

Implementation results:

a sharp change of marketing efforts towards customer retention,

a shift from highly competitive positions to more niche products with better margins,

all-around KPI growth.

Summing Up

Magento Business Intelligence is a good opportunity to augment your Magento Reports data with even more data sources.

Top 5 interesting BI reports to look at:

average customer lifetime value, frequent purchases by new customers, lifetime value by acquisition channel, customers (or companies) by revenue, average order value.

Top 5 insightful but more in-depth reports:

retention rate correlation with customer support tickets, negotiated quotes by status (plus their success rate) time-to-last-order, bestsellers by volume and revenue, repeat order probability.

In addition to that, as Bob Moore, head of Magento BI, said during Magento Imagine 2017, the top 3 growth KPIs are customer acquisition, customer retention, and customer lifetime value. This is what you need to concentrate on.

Whether you use Magento Business Intelligence or prefer to stick to the good old Google Analytics and Magento Reports, always keep these 3 KPIs in your crosshairs. It’s doable even if you don’t want to invest in Magento BI Essentials. MBI will just give you a more detailed picture.