A deep dive into Shopify's Google channel for GA4

You might have seen the message below in your Shopify store settings about setting up the Google Channel app. What should you do when you see this message? Shopify offers a number of sales channels to make it easy to sell products on different online channels like Facebook and the Shop app. The Google sales channel is a bit different, since 1) it now also includes Google Analytics 4 (GA4) tracking, and 2) it is now managed directly by Google. Although we work with larger merchants at Littledata, who typically use external apps and agency partners to manage sales channels and analytics, we’ve been getting a lot of questions about the recent updates. Here’s a first look at what the Google Channel app does, and how that compares with other ways to set up Google Analytics 4 (GA4). What is the Google Channel app? Shopify launched the Google Channel app back in 2017 to provide an easier way for stores to sell on Google, using Google Ads and Google Shopping. It’s free to install, though of course you pay for the Ads ;) “Sync your products to Google Merchant Center, list products for free on Search, YouTube and more and even run paid Performance Max campaigns.” In the relaunch in March 2023 Shopify/Google added tracking for GA4, along with better support for Google PMax (Performance Max) campaigns. Shopify wants to offer you with a no-code install process for GA4, but adding the Google Channel won’t “avoid any data disruptions” for all stores. [subscribe] Why Shopify is moving GA4 tracking to the Google Channel Universal Analytics - the previous GA version - will stop collecting data on 1st July 2023, so Shopify was under pressure from customers to offer in-built GA4 tracking ahead of that deadline. GA4 is also Google’s preferred way of tracking conversions in Google Ads, and PMax campaigns need conversions (purchases) tracked to maximize Cost Per Acquisition (CPA). I also think Shopify wants to push support for GA4 onto Google by moving all of the Google connections out of their core platform and into a ‘third party’ app. What’s included in Google Channel tracking? The Google Channel app allows a store to pick a GA4 property and copies most of the ecommerce event tracking available from Shopify to Universal Analytics: Page views Product views (including product name and price) Add to cart Checkout started Purchase (Order completed) [note]Are you tracking conversions in GA4? Find out in 5 minutes with our free order checker app[/note] What are the limitations of Google Channel for tracking GA4? Firstly, the Google Channel is built to work with Google Ads. However, there’s many other reasons to use Google Analytics other than for Google Ads targeting: tracking all marketing channels, understanding on -site conversion, checkout conversion, product performance and more. Shopify hasn’t optimized the tracking for that. So there are some limitations with the events sent to GA: No tracking of product list views or clicks No checkout steps, beyond begin_checkout * No currency field on Product Detail views No reporting on product SKUs No tracking of coupons and discount codes No server-side tracking for accurate orders and revenue No Enhanced Conversions for cross-device tracking of Google Ads * Theoretically, an event is triggered when users add payment info, but we couldn’t get this to fire in multiple tests. See a full comparison with Littledata tracking. Secondly, the GA4 tracking is tightly coupled with the implementation of Google Shopping feed (which has some bugs, judging by the thirty 1-star reviews from the last month) so while you can just use the GA4 part of the Google Channel app, you run the risk of disrupting Google Analytics when you edit Google Ads settings. Thirdly, there are no settings to adjust the Google Channel tracking - so if you want only certain events tracked, or integrate with third-party apps, your hands are tied. "There are no settings to adjust the Google Channel tracking. So if you want only certain events tracked, or integrate with third-party apps, your hands are tied." Lastly, Shopify does not provide full support for GA4 tracking via the Google Channel app. The app is theoretically supported by Google, but Google only provides technical support if you pay $50k+ a year for Google Analytics 360. Other than that you’d need to pay a consultant to check the set up for you. What is the best way to set up GA4? You need to start getting data into GA4 by July this year - not just for analysis, but also for building audiences and retargeting your own customer base in Google Ads. So beyond this app, you have two options: 1. Add Google Tag Manager to your store theme Pros: Reliable page view tracking, simple to customize settings, free to run Cons: No tracking of the checkout steps (even for Plus stores), revenue in GA won’t match revenue in Shopify, lots of time (and developer cost) required to set up all the shopping behavior events 2. Use a proven, highly rated app like Littledata Pros: Reliable tracking of the whole customer journey in GA4, 100% match between orders and revenue in Shopify, no implementation effort, no developers needed, instant data quality; and Littledata is optimized for Shopify Plus, including headless tracking, Shop App tracking and multi-currency tracking in GA4 Cons: Ongoing app charge to maintain data quality [note]Are you tracking conversions in GA4? Find out in 5 minutes with our free order checker app[/note] Why server-side tracking? The basic limitation of the Google Channel is client-side tracking -- which means all the events to Google are sent from the end user’s browser. This isn’t a reliable way to attribute sales to marketing campaigns in an age when many browsers and ad blockers limit tracking. The world of web analytics has changed a lot since Shopify added GA via the Shopify store preferences back in 2014 - but Google Channel isn’t changing how the event data is actually tracked. In contrast, server-side tracking allows apps like Littledata to hook into what is happening on Shopify’s servers from the add to cart onwards. This means 100% of revenue can be tracked and the vast majority (~90%) of that can be linked to a pre-checkout user journey and marketing campaign. There’s many apps that promise to ‘fix’ marketing attribution (Rockerbox, Northbeam, etc), but the only way to get truly reliable tracking of orders and revenue is server-side tracking. What your store should do today While I understand that Shopify wants to provide an out-the-box integration with Google Analytics for smaller stores, this Google Channel won’t be suitable for any scaling brand spending heavily on online customer acquisition and retention. You DO need to start tracking in Google Analytics 4 ASAP! If your brand turns over less than $1M a year, and you don’t have the time to dive into marketing attribution and targeting, then the Google Channel may be enough right now. And that's great! But if you are doing $1M+, or need to dive into the details of what drives customers to purchase, then I don’t think the Google Channel will be robust enough for you. If you're ready to be truly data-driven this year, consider applying for a Littledata Plus plan so we can support you fully with higher SLAs and analytics training for your team. Shopify has reason to launch limited free apps (eg reviews, email and geolocation) to address the concern that their sticker price doesn’t reflect all the paid app add-ons you need to run a store. Yet professionals at growing brands know you need paid apps to guarantee quality and support. Littledata’s Google Analytics connection is no exception -- try it for free in the Shopify App store today!


Using Postscript SMS to fuel your conversions

With a staggering 98% open rate, SMS marketing should be part of every DTC brand’s marketing strategy. The best part is that SMS marketing works well for both acquisition and retention. With Littledata’s new Postscript integration, you can better track which SMS campaigns are driving sales and exactly when and where customers are converting. Narrowing down campaigns to the channel level in Google Analytics 4 gives your business a single source of truth for attribution. 1 of every 5 orders is missed by merchants who rely solely on Shopify’s tracking, and this is getting even worse with recent privacy changes. With proper tracking of your SMS campaigns you can up your analysis of key ecommerce metrics gathered by Littledata like AOV, LTV, and more. Helping your team save time, money, and resources by setting up tracking or doing analysis manually. Littledata even lets you see which SMS campaigns perform best for different types of orders (e.g. subscription recurring orders, first time subscription orders, one off purchases, upsells).  Merchants continue to dive into channel data in order to optimize their campaigns and understand customer behavior. Knowing how channels are performing and contributing to key ecommerce metrics enables merchants have a better understanding and build custom reports in Google Analytics 4's newly launched exploration tool. Allowing merchants to have better insight and control over their data. A popular example is Funnel exploration which allows you to see direct or indirect steps around efforts like SMS and how they play a role in the customer journey. Benefits of using Littledata with SMS include: Single source of truth in Google Analytics. See which SMS campaigns are driving sales and exactly when and where customers are converting. Better marketing attribution. Littledata’s app magically stitches sessions together so you can understand performance across paid and organic channels. And build better audiences in Facebook Ads, Google Ads and more. Audience building. Littledata captures complete data about browsing behavior, checkout steps and purchasing behavior (orders, refunds, repeat purchases) for more accurate retargeting campaigns and audience building. Complete subscription tracking. Many subscription ecommerce merchants use Postscript to power their SMS/text marketing, and Littledata integrates with leading subscription apps like Recharge, Smartrr and Ordergroove to track recurring orders directly in Google Analytics 4 and tie them back to customer touch points like email, SMS and Facebook Ads. Littledata’s no code solution offers easy setup without the need for developers. Simply add the correct UTM parameters when setting up your Postscript campaigns and our app will start stitching sessions together behind the scenes. See for yourself with a free 30-day trial. [note] Learn more about our Postscript connection here [/note] Curious about how to succeed in a world without third-party cookies? Learn more about why top DTC brands are moving to server-side tracking.


Milestone Alert: Littledata’s Google Analytics 4 (GA4) connector is now out of beta!

It’s been reported that over 4,000,000 websites use Shopify for their ecommerce sales channels. From finding the right product to listing and selling—merchants are some of the busiest people in the world. And in a few short months they will all have a common problem when it comes to their Google Analytics accounts as Universal Analytics is officially deprecated. However, current Littledata users will not have this issue and in fact many are already starting to make the switch to Google Analytics’ next evolution and release of Google Analytics 4 (GA4).  Littledata launched our Shopify and BigCommerce beta connection to GA4 in early 2022. We’ve seen hundreds of current and new customers install our app—which stitches together client-side and server-side tracking—we know pretty fancy stuff. On top of that, we launched GA4 Courses which is complimentary for ecommerce professionals to learn how to proactively setup and use GA4 reporting and explorations now built on event based tracking instead of session based tracking. Giving ecommerce brands the tools they need to track the customer journey from end-to-end in a matter of a few clicks.  With that—we are excited to announce we are officially out of beta! Our team stands at the ready to help you as you migrate to GA4 or launch a completely new ecommerce business together. Available on both Shopify and BigCommerce it is a breeze for many businesses to set up and start viewing tracked events from first touch-point through the checkout process and even post-purchase events.  “This is a pivotal moment for ecommerce analytics,” says Ari Messer, Littledata co-founder and CMO. “GA4 can seem intimidating from the outside, but once you start poking around you’ll find it to be far more powerful and flexible than Universal Analytics. We were the first to market with GA4 tracking, and over the past year we learned a lot from real test cases with top DTC brands on Shopify and BigCommerce. We can’t wait to see what merchants do with our new tracking – so far the results focus on finding higher ROI on organic channels while eliminating waste on paid channels.” [note] New to Littledata? Read our verified reviews on G2 [/note] Data-driven brands like Geologie have gotten around this Google Analytics roadblock early on and made the move to GA4—with success to tout in the industry they’ve used data as a key function of their business for acquisition and retention marketing to their subscribers. Citing recently the extensive work it would have taken to set up tracking manually, learn Shopify’s API in detail, developing, maintaining and more. Ultimately, in all businesses it comes down the resources you want to dedicate or deploy. If you are a small team this gives you access to the same tools that industry leaders like GRIND use. If you are a large scale enterprise ecommerce business it buys back hours of work for your developers and marketing team members to focus on putting the data into action vs. managing the conversion tracking.  Celebrate with us by trying out our GA4 connection free for 30 days, no strings attached. In that time, we challenge you to set up new reports in explorations, build audiences for your Google Ads, and if you are still feeling ambitious try out our Meta Conversions API for Facebook and Instagram Ad campaigns.  [tip] Don't know where to start? Book a demo with our specialists [/tip] As always, a special thank you to our customers who make it possible for us to continue to dream, build, and be inspired by data! 


Extending our Recharge integration to work with GA4 and Facebook CAPI

With the sunsetting of Universal Analytics (UA) right around the corner, we're especially excited to announce that Littledata now tracks the Recharge checkout in GA4 and Facebook CAPI. It's a super easy way to get accurate, granular subscription data in Google Analytics 4 (GA4), which powers better reporting and Google Ads performance, and Facebook Conversions API (CAPI), which powers better Facebook Ads and Instagram Ads. Recharge was one of our first app integrations after we launched the main platform integration for Shopify in 2017, and it's still one of our most popular data sources. With complete attribution data and LTV tracking that accounts for recurring orders, Littledata's server-side tracking is the secret to how successful Recharge brands improve engagement and conversions on organic channels like Klaviyo and ROI on paid channels like Google Ads and Facebook Ads. Data-driven brands like Grind Coffee and Geologie use Littledata to make better decisions every day. And with full support for GA4, Facebook (Meta) and Instagram Ads, it's now even better. What's new in this release: Recharge checkout steps tracked in GA4 Subscription lifecycle events tracked in GA4 Support for both Shopify and BigCommerce checkouts Option to send subscription events to Facebook Conversions API (CAPI) If you're using Recharge connection we recommend tracking in parallel in GA4. That way you'll automatically have historic data, plus a chance to start playing around with the new platform. Plus you'll save your team a lot of headaches when July rolls around. With GA4's powerful reporting in your hands, you can use Littledata to get a single source of truth about your subscription sales and marketing, from one-off purchases and first-time subscriptions through refunds, subscription updates and recurring orders. Eliminate the guesswork and find your most profitable channels for subscriptions. The updates to our Recharge integration focus on checkout tracking and subscription lifecycle events because our merchants have found this to be the ideal combination to combine data for analysis with data for action (more effective audience building, retargeting, and -- for our Segment users -- marketing automation). We've also made it super easy to automatically send subscription events to Facebook CAPI; brands that do that are cutting their acquisition costs in half! Not using Littledata yet? Get going today with a free 30-day trial. No strings attached. [note]Did you know that Littledata can track headless Recharge setups too? See how[/note]

by Ari

The six-figure fix: How clean data fueled Flux Footwear's growth

SUMMARY As a company that values both data and creativity, Flux Footwear leveraged Littledata’s plug-and-play connections to Google Analytics (UA and GA4) and Facebook Ads to capture complete first-party data across the customer journey. Littledata’s automatic tracking solution not only saved them valuable time, but primed Flux for success with highly-targeted ads and in-depth customer insights as they scaled from launch to major DTC footwear brand. THE CHALLENGE Goal: Send complete Shopify data to Google Analytics (UA and GA4) and Facebook Ads The founders of Flux Footwear launched their Shopify store in July 2021, offering a minimalist shoe that works in harmony with the natural strength of bare feet. By embracing research on the positive effects of barefoot shoes and the value of sustainability, they created designs that feel just as good as they look. But after launching their Shopify store and installing Shopify’s native browser-side pixel, Flux’s team struggled with duplicate data, inaccurate attribution insights, and large data discrepancies between Shopify Analytics and Google Analytics. Unable to get an accurate understanding of their store’s performance, they needed to implement a data layer that tracks the entire customer journey across tools and platforms. The rollout of iOS14 made matters worse, inhibiting their Facebook Ad performance and limiting Flux’s reach to their target market. Their need for first-party data to maintain deep, accurate customer insights grew stronger than before. THE SOLUTION Fixing the data Within minutes of installing Littledata’s server-side tracking, accurate data was flowing seamlessly from Shopify to GA, capturing complete first-party data at every touchpoint and stitching together multiple sessions. In addition to connecting their Universal Analytics property, Flux started sending data in parallel to GA4. By building up historical data in GA4 now, Flux will be able to conduct year-on-year analysis to understand their business’s seasonality in years to come. Flux worked hand-in-hand with Littledata’s team of analytics experts, creating filters and views in GA to better interpret their data and build custom reports in GA4 based on their unique business goals. https://www.youtube.com/embed/plg4YWdJ97o Hear from Flux's co-founder, Benjamin Loschen on how Facebook Conversions API from Littledata improved their Meta Ad Campaigns. Integrating the tools Beyond the initial setup, Littledata made it easy for Flux to integrate their existing tech stack, see crucial insights in Google Analytics, and establish a single source of truth for customer data. [tip]Don't reinvent the wheel. See the top 5 data tracking mistakes made by DTC brands[/tip] With an accurate view of their Facebook Ad performance and marketing attribution, Flux is able to spend more on channels and campaigns that are converting at higher rates, and less on those that are falling short. Utilizing Littledata’s Facebook Ads integration, Flux built lookalike audiences based on their highest-spending customers, leading to a boost in both conversion rate and monthly revenue. There were three parts to this: Making Facebook Ads data match Shopify for actual conversions (real purchases instead of just clicks) Tracking checkout funnel events Getting the right LTV data to build high-value lookalike audiences in Facebook Ads and Instagram Ads All three were accomplished using Littledata's Conversions API connection. Conversion API (or "CAPI" for short) is a powerful way to get complete, accurate data about purchases and repeat buying behavior (shoppers who come back to buy again). Lots of brands don't even know about CAPI at all, but those that do often end up hiring agencies to do expensive manual implementations. Flux Footwear took the smart route and used an automated CAPI connection instead of trying to reinvent the wheel. The results were big and fast! RESULTS Flux Footwear cites Littledata’s seamless technology for helping them launch their brand with an accurate data layer. One of the most significant results, in their experience, is having “a team of people managing the data flow—a total no-brainer.” This helped to free up their most valuable resource—time—and allowed them to focus on their product. Since Flux relies predominantly on Facebook and Instagram ads to reach new customers, Littledata’s Facebook Conversions API integration plays a key role in Flux’s growth strategy. Seamlessly sending Shopify data to Facebook Ads and building powerful lookalike audiences for targeting and retargeting campaigns has fueled their recent growth—scaling their monthly revenue by 500% in under a year. They have also estimated over 30 hours of work were saved if they were to attempt to learn and set up tracking manually. With accurate data and a reinforced tech stack in place, Flux Footwear now has a complete picture of attribution, repeat orders, and conversions from customers and their affiliates.


Harnessing data insights to drive retention and growth with subscriptions

Recently, Ari Messer, Co-founder and CMO at Littledata, caught up with Awtomic—who provides shoppers and merchants with the best tools to manage subscription products and membership services easily. Brands that have subscription models at the core of their business know that in 2023 increasing their retention rate for new and existing users is key to their growth. Ari shared the importance of using data effectively in decision-making by understanding consumer behavior and attribution saying:  “The marketing mix for every brand is a little different. To reach high-value customers you have to adjust marketing and not just aim for a big purchase at the beginning but for the right kinds of engaged customers. You have to use your data to build community.”   Many brands struggle with consistent, trustworthy data which can lead to poor decisions and ineffective marketing. Littledata’s app helps merchants clean up and organize their data sources so that they can make informed decisions—saving hours of implementation time and data maintenance.  Merchants' biggest problems with Google Analytics include inconsistent data, missing data, and double tracking. Littledata helps clean up these problems and provides consistent data by grabbing serverside and clientside data from their Shopify or BigCommerce store and sending it to destinations like Segment and Google Analytics (UA +GA4). The result is that merchants can confidently make decisions based on accurate data, including LTV and cohort analysis. This includes one-off or recurring orders which is something many brands struggle to sort out by doing analysis.   Of course, brands are looking at data to increase their bottom line but big players in the space also are using data to drive creative campaigns for their target audience which in turn amplifies their brand’s community and often reaches higher value customers. Looking to stay on top of the Shopify and BigCommerce data scene? Join the thousands of brands who receive news and updates from Littledata, sign up for our newsletter.


Which DTC brands are topping The Lead's Foremost 50?

Each year, The Lead honors 50 digitally native, direct-to-consumer (DTC) brands that are challenging the industry norms and changing the way we do business online. 2023’s list just dropped and we’re thrilled to see so many of Littledata’s favorite brands celebrated for breaking the mold and redefining the future of ecommerce. Athletic Brewing Co. The craft beer industry is booming! And for health-conscious consumers, who want to enjoy an artisanal brew without the buzz, Athletic Brewing is the way to go! Since 2018, Athletic Brewing has offered a wide range of great-tasting, non-alcoholic beers, delivered straight to your front door. Five years later and Athletic Brewing is the largest non-alcoholic beer brand in the world, recently expanding operations across North America and Europe. But global expansion has its challenges, including unique preferences in both product and marketing.  To succeed in the global marketplace, it’s critical that Athletic Brewing tests different site layouts, product displays, and marketing strategies. By leveraging Littledata’s Google Analytics app for Shopify Plus stores, Athletic Brewing has an accurate view of their A/B test performance and can fuel their business decisions with real results. Don’t just take our word for it though, here is what Athletic Brewing said about Littledata: “​​Great tool that provides valuable information and insights for our eComm business. A must-have for back-end Google Analytics management and data connections. Customer support is top-notch with quick response and friendly service. Setup is easy and has really expanded our reporting capabilities.” — Athletic Brewing Company Littledata’s Google Analytics connection and advanced Recharge tracking give subscription brands like Athletic Brewing a deeper understanding of their customer’s lifetime value (LTV) and how it varies by product and channel. LTV is a crucial metric for any ecommerce brand, but especially for brands selling by subscription, revealing which product lines have the most loyal and profitable customers and which marketing channels are converting those high-LTV customers.  How Athletic Brewing leverages data With accurate LTV insights by channel, Athletic Brewing identified their top-performing channels and doubled down on their most profitable campaigns. They were able to boost conversion and retention rates, without increasing their ad budget or customer acquisition costs (CAC). Through optimizing their paid campaigns, Athletic Brewing successfully reached high-LTV customers.  BloomChic BloomChic is a digitally native, DTC clothing and lifestyle brand for the modern woman. Built on the philosophy “Live with ease, dress with joy,” BloomChic is dedicated to offering affordable, stylish, and comfortable clothes for women sizes 10-30. BloomChic has scaled their Shopify Plus store internationally to empower women around the world through accessible, inclusive fashion. After the release of iOS 14, ecommerce brands struggled to understand where their customers were coming from and which campaigns were converting them. BloomChic was no exception. As a fast-growing, data-driven brand, setting up Littledata’s Google Analytics connection was a no-brainer. The more data BloomChic captures about their global audience, the better they can optimize their marketing campaigns and boost conversions. By employing Littledata’s server-side tracking solution, BloomChic unlocked a complete picture of the customer journey. From discovery at the source to post-purchase events, they fixed their attribution dilemma and continue to scale their top-performing campaigns and marketing channels. How BloomChic leverages data When it comes to website optimization and UI/UX decisions, browsing behavior speaks volumes. BloomChic relies on accurate browsing and checkout behavior to optimize the user journey, identifying key customer touchpoints, which interactions lead to higher conversion rates, and where customers drop off during the checkout process. By leveraging accurate Shopify data in Google Analytics, BloomChic has improved their customer journey, optimizing conversion touchpoints for higher conversion rates and revenue. Bobbie Bobbie is shaking the stigma of how mothers choose to feed their babies. Bobbie’s revolutionary baby formula is the first European-inspired recipe to be approved by the FDA. As a mom-founded and led company, Bobbie is designed with high-quality ingredients and affordability and accessibility in mind. One of the biggest challenges new moms face is a lack of time in their newfound routines. Bobbie helps to support busy moms by offering convenient delivery options, including flexible subscriptions — easily pause, edit, or cancel your subscription at any time. Retention is always the goal — especially when it comes to subscription-based businesses — but the key to retaining customers lies in understanding them. And while Shopify’s standard Google Analytics tracking misses between 30 and 90% of orders for non-standard, subscription checkouts, Bobbie leverages Littledata’s plug-and-play Recharge connection to capture complete customer data, including post-purchase events like subscriptions. With complete subscription data at their fingertips, the Bobbie team is able to perfect their retargeting campaigns, optimize their subscriber experience, and never miss out on a loyalty opportunity. How Bobbie leverages data The majority of Bobbie’s sales are recurring orders, which makes complete subscription data an essential piece of their business. With accurate insights into their recurring orders, Bobbie’s management team can project quarterly and annual sales with ease and accuracy, helping them improve ecommerce logistics in ordering and managing inventory. By matching demand to their upcoming sales, Bobbie saves more on overhead costs, maximizes profit, and inventory doesn’t go to waste. [tip] Do you trust your subscription tracking? Download the Recharge smart connection guide to learn how to capture complete subscriber data in Google Analytics. [/tip] Harper Wilde Tired of the over-sexualized, overpriced bra industry, Jenna and Jane set out to create a more comfortable world for women, starting with the basics — bras and underwear. Along came Harper Wilde. Harper Wilde is built on a core belief that every woman deserves to feel comfortable and confident in her own skin, which is why they focus on creating high-quality, comfortable, and affordable undergarments for women of all shapes and sizes. But here’s the thing — they don’t just rely on their intuition to make decisions about their product development and business strategy. They’ve implemented a data-driven approach, powered by Littledata’s Shopify source to Google Analytics, to understand how customers interact with their ecommerce store and marketing campaigns.  With a complete view of their store performance in Google Analytics, Harper Wilde uses data to guide product, marketing, and UI/UX decisions. Accurate churn, retention, and LTV data in Google Analytics fuels critical business strategies, directs decision-making, and leads long-term growth plans. How Harper Wilde leverages data Harper Wilde uses accurate data in Google Analytics to better understand and communicate with their customers. With accurate insights on browsing behavior, Harper Wilde has built out personalized SMS and email marketing campaigns to retarget abandoned carts and engage customers based on their interests, previous purchases, and shopping behavior. By implementing a customer-centric messaging strategy, Harper Wilde has increased revenue, lowered customer acquisition costs, and boosted customer lifetime value. Spot & Tango Since the DTC boom in 2020, new brands have been popping up left and right, offering the products you love from the convenience of your home — and your pup’s favorite meal service is no exception! Spot & Tango specializes in curating custom meal plans based on your dog’s breed, age, weight, and activity level, ensuring that they have the proper nutrition to live a healthy life. And the best part? They use only the freshest, locally sourced ingredients. It’s no surprise that a brand like Spot & Tango has gone headless for maximum flexibility, speed, and personalization opportunities. But headless builds come with their fair share of challenges. Without the right tools, headless Shopify stores struggle with inaccurate and incomplete data across marketing channels, browsing behavior, sales data, and more.  By connecting Spot & Tango’s headless Shopify store to Google Analytics with Littledata, they didn’t skip a beat. Littledata uses server-side tracking to capture complete sales data, checkout events, and marketing attribution for headless setups, no matter how complex. How Spot & Tango leverages data A common challenge headless stores face is the disconnect between the front-end browsing experience and the back-end checkout events. Lucky for Spot & Tango, Littledata stitches together sessions to ensure accurate marketing attribution. They have since leveraged accurate marketing attribution and transaction data across first-time, one-off, and recurring orders to fix their retargeting and cart abandonment campaigns. With a real view of their customers’ behavior, Spot & Tango built out loyalty opportunities, increased customer lifetime value, and reduced acquisition costs through impactful marketing. [tip] Littledata tracks headless Shopify stores in Google Analytics and Segment. [/tip] Conclusion We love that The Lead pays homage to the top DTC brands that are redefining the future of ecommerce, and we’re honored to work hand-in-hand with so many of those incredible brands. Learn more about Littledata: Advanced Facebook Ads via Facebook Conversions API GA4: What Shopify stores should do TODAY to keep up with the new version of Google Analytics Is it possible to track headless Shopify setups? The Ultimate Guide to Subscription Analytics


Grow your subscription business with revenue based loans

Revenue-based loans for early-stage companies burst into the mainstream in 2022. Whether you are a subscription commerce business or a SaaS company, this could be a powerful new way to fund your expansion. In this guide I’ll explain what I’ve learnt as a founder from many weeks of conversations about the different flavours of debt funding, and when they’re appropriate for your business. What is a revenue-based loan (RBL)? An RBL is a business loan secured against a company’s future recurring revenue stream rather than the company’s assets. Most growth-phase companies can’t borrow from traditional banks because they are not profitable, are asset-light, and don’t have big enough revenue streams. Alternative debt providers, including RBLs, have stepped in to fill that need. This is different to invoice factoring. Factoring companies take over the billing relationship with your customers to repay the debt, which doesn’t work for companies like Littledata where most of the revenue is from Stripe card processing or payouts from an app store. How do RBLs compare with traditional loans? RBLs are typically covenant-lite and without personal guarantees. This means if your revenue drops and you are unable to repay the loans the lender has no right to take control of the business or pursue you personally for the debt. That said, all debt needs to be repaid in full — even if your revenue drops unexpectedly. How do RBLs compare with selling equity (VC funding)? Firstly, they are much less dilutive - sometimes non dilutive. This means the current shareholders keep their same hard-earned share of the business. Some lenders may ask for warrants (share options) to share in the upside if your growth takes off, but these are still a lot less dilutive than VC funds. Secondly, RBL providers won’t interfere or distract you. They don’t want a say in how you run your business; they only want visibility on how your revenue is progressing. On the flip side, debt providers won’t be able to advise you on growth strategy — most are very transactional. Yet, in my experience, VC investors exaggerate the benefit of their advice, which can be just as distracting as helpful.  Since the outcome for most VC-based companies is very binary, VC funds inevitably focus their attention on the biggest winners in their portfolio — meaning you won't get their attention in times of need anyway. In many cases RBLs are not a complete alternative to equity funding — they just reduce your dilution by match funding other equity investments. Are RBLs the same as venture debt? The terms are often used interchangeably, but traditionally venture debt was taken on alongside a big injection of cash for equity (e.g. alongside a Series A investment). This boosts the size of an already large funding round but doesn’t help companies trying to grow up to this level. RBLs can be used independent of any equity funding round. Littledata’s Story Littledata started exploring revenue based loans back in 2020, and took out our first 3 month loan from Forward Advances. However, with our marketing mix and 30 day free trial it’s impossible to get a return on investment within 3 months. So in 2021 we took on a 12 month loan from ClearCo, and then in 2022 another 12 month facility from Capchase. Then later in 2022 we started working with Element Finance, who have been extremely helpful in working around our existing lending and can lend over 4 years to postpone a larger equity raise. Will taking on a loan reduce my funding options in the future? As this kind of debt funding becomes more mainstream it is becoming a useful bridge to ever-larger Series A rounds. In my experience, having a loan on your books will not block an equity investment - as long as it is not convertible into equity, and the warrants for the lenders are minimal. In fact, since debt funders are agnostic about the exit route or valuation, they keep open exit options that a VC might block. So for example, If your growth stalls and you want to switch to run your company for profit, once you’ve repaid the debt, the income is all yours. If you can use debt funding to achieve a certain scale ($5M+ ARR), you’ll be able to access much cheaper term loans from lenders like Silicon Valley Bank. Is my business suitable for an RBL? If you haven’t yet generated $100k annual recurring revenue (ARR), or you are investing in a new and unproven market, then equity funding is a better option. To get confident in the stability of your future revenue streams the debt provider will want to see: 1. Majority recurring revenue 2. High net year-on-year revenue growth (at least 50%+) 3. Low customer value churn (less than 50% per year) 4. Low customer concentration (any one customer churning has low impact) My company Littledata qualifies on all fronts with 100% recurring revenue, high year-over-year growth, less than 40% gross value churn, and our largest customer is less than 2% of our revenue. How much can I borrow? Loan values are usually expressed as a multiple of run rate ARR, and the maximum will be between 20% (2 months revenue) and 50% (6 months revenue) of your ARR. This maximum depends on revenue stability, term length, and other factors. I think I can raise a VC. Are RBLs still relevant? I think so, yes. It helps boost your valuation and gives you time to wait for the right investor. Investors value subscription-based companies as a multiple of their ARR, depending on growth and churn. If you’re growing at a predictable rate month-over-month, why would you sell out a bigger share now when you could hold off for a higher valuation in the future. Short-term RBLs won’t increase your runway unless you can increase your revenue faster than the loan duration - otherwise the extra revenue you gain from bringing forward hiring or marketing spending will likely be offset by the debt repayments. But VC funding can also reduce your runway (by encouraging higher burn rates) AND limit your exit options. It’s a necessary evil in some cases, but don’t believe it’s the only way. (Image credit: Founder Collective) What are the options for funding a sub-$2M ARR business? At this level, you are limited to borrowing over a maximum 12-month term. This means you’ll need to repay the loan monthly over a year, so if you borrow $200k you’ll repay around $18k per month including a fee. This fee is typically expressed as a discount rate — equivalent to the discount you might offer a customer for paying annually rather than monthly. Discount rates on 12-month loans currently range from 5% to 11% depending on the underwriting risk. This translates to an APR of 10% to 18% since half of the money is repaid within half the loan term. Some lenders will structure the repayments as a percent of your monthly revenue (i.e. you repay over a minimum of 12 months), which limits the cash out if your revenue sinks. But, in practice for a growing company, the repayments will be fixed. You could also borrow for 6 months for half the cost. This doesn’t work for us, but it could work for you if you can quickly translate marketing dollars into more recurring revenue. Since the process is usually fully automated — with data feeds from common accounting and banking platforms — these lenders are very quick, with offers in 24 hours and loans within 10 days. Some of the lenders in this space are: Clearco (previously Clearbanc) Uncapped Forward Advances (stopped lending) Capchase Velocity Capital Vitt Founderpath Pipe Full disclosure: we’ve taken loans from Forward Advances, Clearco, Capchase, and Element Finance. What are the options for funding a $2M+ ARR business? The lenders above will welcome you with open arms; at this scale, their risk is lower and the fees are higher. But there are now more options for lower interest rates and longer-term loans. Element Finance offers 4-year loans of $500k+, with no warrants. Element Finance recently provided funding to Littledata for the next stage of growth.  Saas Capital, based in Seattle, also offers 4 to 5 year loans with lower interest and warrants. They can lend between 4x and 12x trailing MRR, depending on growth and churn, but focus more on SaaS. Riverside Acceleration Capital offers a 3 to 5-year loan, with an interest-only period at the start to reduce cash out. Prefcap offers a 2-year, rolled-up loan (no monthly payments, but repaid or refinanced in full at the end of 2 years). This reduces your cash out, but they want warrants with the right to invest equity in the next round. Flow Capital, based in Canada, offers a 3 to 5-year loan with lower interest but with warrants. Lending over longer periods is much less predictable, so the process will be more like interacting with a VC: a week or two to get to a term sheet, and then 6 to 8 weeks to complete due diligence and access the funds. In Conclusion If you’re a growing subscription business, check out the possibilities for RBL financing. Even if you don’t need the money now, it can be a useful option for bridging to the next equity round — or allowing you to say no to egregious term sheets. I’ve spent many weeks pitching VCs and as flattering as it is to have experienced investors quiz you about strategy, I’d far rather be putting the capital to work in growing the product and customer base. RBL funding gives me that option.


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