How to use Northbeam

How to use Northbeam's Newest Metrics: Shipping, Discounts, Refunds and Taxes

Jay Li
January 30, 2024

We’re excited to launch four new order metrics available across the Northbeam platform: shipping, discounts, refunds and taxes. With this new release, users can now track the dollar amount of each, which unlocks some helpful use cases. In this article we’ll cover what these metrics are, how they’re calculated, and why you might find them useful in your own reporting. 

What are our new metrics?

Customer Shipping: Shipping fees charged to customers excluding Free Shipping orders. For Amazon this is simply calculated as the sum of shipping costs for the relevant order; Shopify defines this as shipping costs minus refunds and discounts. If we choose to look at first-time, this would be defined as the total shipping fees charged to first time buyers for that campaign (and vice versa for returning). 

Discounts: Northbeam already gave you the ability to track discount codes, but this metric takes it a step further by adding the value of all discount codes applied for a relevant campaign and order. For Amazon this includes the sum of both product and shipping discounts (Shopify just sums up all discounts applied to that order). Segmenting by first-time vs. returning may be particularly useful here to see if new buyers were sufficiently motivated by a discount code to purchase, or perhaps you were able to draw back an older customer with a sale. 

Refunds: Defined as the total of all returns, refunds and cancellations from orders attributed to that marketing campaign as reported by your eCommerce platforms. Shopify has a nuance here where they consider a refunded transaction to be a partial or full return of captured funds to the cardholder; a refund can only happen after a capture is processed. 

Tax: The sum of all taxes applied to the relevant order; Amazon includes shipping and gift wrap taxes in total taxes. 

Let’s first cover how the new order metrics are defined and calculated for the eCommerce platform(s) you sell on. Each metric offers a blended figure by default, but you can also segment by First Time and Returning customers. This means that not only can you track shipping (or discounts/ refunds/ taxes) attributed to a specific marketing campaign, but you can also break it down by whether that customer was a first-time or repeat buyer.

For example, in the screenshot below we’ve broken down Refunds into First Time and Returning customers in the Data Table module in the Sales Page. We can see that the vast majority of Refunds are being driven by new customers which is to be expected. We’ll cover how you can create a custom metric to keep an eye on Refunds and Returns later in the article.

These new metrics are also available for subscription orders. In addition to being able to break these out by first time and recurring (as in first time subscribers or recurring subscriptions), you can also see LTV versions of each metric.

Let’s look at Subscription Refunds vs LTV Subscription Refunds for illustration’s sake. In this case, “Subscription Refunds” uses a 1 Day attribution window because that’s the default setting in the Global Navigation page. We can see there’s roughly $25K in “conversion lag” from 1 Day Subscription Refunds to Lifetime Subscription Refunds, which is about a +50% increase compared to 1 Day Refunds.

This can help give you an idea of how many returns you can eventually forecast for, just like you would use Conversion Lag to predict LTV revenue. 

Note that although we’ve only looked at the new order metrics in the Sales Page Data Table so far, these metrics are available throughout the Northbeam platform including the Overview Page, Creative Analytics, and Data Export. For example we can add a tile onto the Overview Page to track how refunds and revenue are trending. 

You can also use the Sales Page chart module to achieve the same result, although creating a tile in the Overview Page is easier to save and socialize key results with the rest of your team.

Best Practices for Using these New Order Metrics in Northbeam 

Many of our customers compare Northbeam numbers to other internal dashboards (Shopify revenue for example) and were sometimes frustrated with small discrepancies due to differences in how shipping, discounts, refunds and taxes are calculated for each order. With this new release, we’re helping you close this gap between Northbeam reporting and your own internal systems.

Instead of having to export Northbeam metrics into a spreadsheet and convert them to match internal ones, you can now use Custom Metrics to accomplish the same thing. 

Net Revenue

A common use case is using Shipping, Discounts, Refunds and Taxes to get a cleaner Net Revenue figure. Here we can simply go to the Sales Page Data Table and create a new Custom Metric: Net Revenue = Attributed Revenue - (Shipping + Discounts + Refunds + Taxes). Some of our customers also remove CAC from Attributed Revenue for this calculation, but this will depend on how your organization factors in costs from Marketing P&L.

To implement this in Northbeam, we’re going to go to the Custom Metric menu (If you need a refresher on how Custom Metrics work check out our Sales Page 101) and input the above formula. We’ll then use the Customize Table feature to compare Attributed Revenue and our new Net Revenue metric to see if we find anything interesting.

Sure enough, we find that if we were just looking at Attributed Revenue, it would appear campaigns are pretty healthy as sales are up +15% and the trend line shows positive performance. However, if we look at our new Net Revenue metric, we see a less promising trend because much of that Attributed Revenue growth is being driven by discounts (see right most column).

We also see a recent spike in Refunds has further diminished Net Revenue growth. These are the kinds of powerful insights that we’re hoping your team will unlock. 

“True” ROAS

Just like we were able to get a cleaner Net Revenue metric above, you can also use these new order metrics to get a better sense of ROAS: True ROAS = (Revenue - (Shipping + Discounts + Refunds + Taxes)) / Total Ad Spend. Note that although we subtracted out CAC above, we don’t do this same calculation in the numerator because dividing by ad spend will already account for the effects of spending marketing dollars to acquire customers.

Let’s create a new Custom Metric to reflect that just like we did for Net Revenue.

We can see here that just like Net Revenue, ROAS is providing an overly rosy picture of the underlying performance. True ROAS is significantly lower at a blended level, and we can even see that Facebook ROAS is getting completely blanketed out once we account for Shipping, Discounts, Refunds and Taxes.

It’s great to keep a picture on topline revenue and ROAS, but this True ROAS metric helps you look under the hood of your campaigns.

Refunds and Returns 

We want our customers to have the best experience possible, but it’s no secret that returns can eat into your profit margins if left unchecked. We can create a custom metric to keep an eye on the amount of Refunds generated through your marketing campaigns; that way you have visibility into if a certain audience or segment is over indexing in the amount of returns you’d expect.

In the screenshot above we’re creating a custom metric called “Return Rate” that calculates total refunds divided by total revenue. This will give you a blended benchmark, which in this case is a 0.68% Return Rate.

We can see that Google and Microsoft Ads both have significantly higher return rates than we would expect, so we may want to double click into each of those and see if we can figure out what’s driving that disconnect. In other words, Return Rate gives you another indicator of the true commercial health of each channel. 

Thank you for reading our explainer on our new order metrics! We hope you find them useful and impactful when using Northbeam. 

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