To see big wins in e-commerce today, entrepreneurs need to cover all of their bases, from organic SEO to mobile advertising.
Analytics tools can create a pretty detailed snapshot of where your business stands — too detailed, in some cases.
Curious about which metrics really matter, a panel of successful e-commerce entrepreneurs reveals that which pieces of data they measure regularly and what it tells them about their overall strategy. Their best views are below.
1. User Acquisition Costs
If you are in the e-commerce world and you don't know how many users are landing on your page, the conversion rate of users to paying customers and the cost of that user landing on the page (versus the profit you make in sales), you may not be in the industry too long. SEO is one way to get an audience, but sometimes you have to pay for users, and you have to know what that converts to. If you have returning clients, it's important to know the average retention you will have, as well. Track information on our users at TuneBash. There is a great quote and it's good for the e-commerce world: "If you can't measure it, you can't control it."
2. Abandoned Carts
You work hard to get people to your site. You work harder to give people something they want to buy. Customers click that beautiful "buy now" and go to the checkout page. And they don't buy? What happened? Keeping a log of abandoned carts gives you the opportunity to ask customers why they didn't buy. Recently, we saw a customer who had five abandoned carts in a period of a couple of days. It turned out that the e-commerce site didn't accept Canadian billing addresses. Whoops. Abandoned carts are one piece of data you should look at and follow up on if you have an e-commerce site.
3. Google Analytics Experiments
In Google Analytics, you can now set up split tests called "experiments." You can set goals and run multiple pages against one another. Rather than guess what works on your Web pages, I highly recommend you split test all important elements. I bet you'll often be surprised at the results. They're not always intuitive.
4. Visitor Value
How much is each visitor generating in revenue? If you know that number, you can budget how much to spend to buy traffic to your site, and you can work on improving that number by increasing conversion rates and customer value.
5. Lifetime Value
The lifetime value of each customer over a certain period of time and from a specific traffic source is key. You could build campaigns to sell one product to one person one time. But how do you build out a marketing plan that continues to engage both past and present customers and drive demand for both present and future products?
Obviously you’re going to get traffic from people, who are looking for you, but it’s really a question of how much traffic you are getting from people who aren’t looking for you specifically, but rather for something you’re selling. The biggest opportunity to make more money comes from non-branded, organic traffic.
7. Lead Source ROI
Many online businesses start advertising on the Web without actually tracking the ROI of each particular lead source. By diligently tracking this metric, you can know which particular lead sources are profitable and which ones to cut. On a deeper level, you can use this to split test advertisements on a granular level to find out which ones will maximize your ROI and develop the best ads.
8. Purchase Funnel
Beyond the obvious metric of CPA (cost per acquisition), we tend to focus on the purchase funnel. Understanding where and when a customer drops off the sales process is just as important as understanding the conversions coming in. Without understanding this, you cannot optimize and refine for increased conversions.
9. Percentage of Mobile Visits
If you don't have a mobile-optimized website, you are in trouble. Most of the e-commerce companies create a monthly report based on mobile usage, and we were stunned to learn that approximately 20 percent of the users view the website on a mobile device. Take a look at analytics and work to create the best shopping experience possible across all mobile devices.