Data. Reports. Analytics. As ecommerce professionals, it seems like we spend so much time ‘crunching the numbers’ and packaging them up in aesthetically-pleasing flow charts and dashboards, but at the end of the day, what are these numbers actually telling you about your business?
If your metrics aren’t telling the story of how your customers are behaving and how your business is ultimately performing as a result, chances are, they probably aren’t worth measuring in the first place!
Here are 5 metrics that really matter when it comes to ecommerce.
Sales Figures versus Conversion Rates
Sales figures aren’t all that. Probably not something that your finance team would be all too delighted to hear, it’d be fair to say! But don’t get us wrong – overall sales figures are vitally important for any business to effectively gauge performance and track targets on an ongoing basis.
The point here is that if you’re monitoring sales figures in isolation, you’re missing a major piece of the puzzle. Because sales figures are great, but they will only tell you the story of how your business is actually performing when you track them in tandem with conversion rates. It’s all about context.
If traffic to your site is high, but sales figures aren’t lifting, even during peak season when extra marketing budget is being pumped into your efforts, chances are that your conversion rate can give you the insight you need to discover why this is the case.
Sales figures will tell you the reality of your sales volumes, but conversion rates will tell you the opportunity that is at your fingertips. And why opportunity is so important is because it’s what should be spurring your sales strategy – helping you optimise the areas of your online store that could use a little work, bearing a huge impact on your conversion rate (and ultimately, sales figures too!)
Overall Web Traffic versus Traffic Sources
Some argue that web traffic is the ultimate vanity metric – something that simply makes you feel good, but doesn’t actually move the needle for your business. While there’s certainly merit in this, the fact remains that every person that visits your website or online store landed there for a reason.
It might be from a social media post that caught their eye, or a Google Shopping ad from a search they conducted, or even from a word of mouth recommendation from a friend. These are the kinds of things that you should know when it comes to your website – not necessarily the volume of your traffic, but where it is coming from.
Oh, and while you’re at it, it’s also worth noting how visitors are accessing your site – is it mainly on mobile, desktop, or tablet?
Once you know what channel your traffic is coming from, you can take it one step further to see what channels customers are converting from. Because it’s these metrics that should dictate where you should be focusing your marketing and advertising budget.
Email Subscribers versus CTR
Growing your email subscriber list is an essential KPI for any marketing team (especially post-GDPR!), but just like website traffic, are the number of email subscribers in your database really going to have an impact on the day-to-day performance of your online store?
Not really, no. What will tell you far more about what resonates with potential and existing customers are the click-through rates (CTR) of the emails that you send to that database.
By measuring click-through rates on your email campaigns, you get a clear indication of genuine interest in whatever offers you’ve put on the table – moving prospects down the sales funnel a little bit further. Open rate seems to take centre-stage as the email metric that gets reported most often – but click through rate is so much more important, because it’s a user action that you can respond to.
For example, if someone clicks a link to an item in one of your email newsletters, they are brought to the corresponding product page on your site, right? If they decide to add that item to their cart and purchase it at this point, excellent! But even if they don’t and drop off, you can now retarget them with personalised messages to encourage a conversion.
Total # of Customers/Followers versus Customer Locations
In the interest of being concise, we’re going to put customer base and audience size in the same pot for this one. Sure, it’s great to say that you have tens of thousands of customers across the globe, or an audience reach of hundreds of thousands on your combined social media channels. But let’s not forget that those figures likely include one-time only customers from a number of years ago, as well as individuals (and bots!) who like or follow your brand on social media but have never engaged with you in any other way. Is this a real reflection of the success of your online store?
What’s far more useful to measure when it comes to customers and audiences are metrics such as their geographic locations. Why? Because if you know where your customers/followers are based, you can cluster/group within a specific area and use that information to your advantage.
For instance, if you notice that a solid percentage of your customers are based in a town or city where you have a physical store presence, that’s a clear indication that you should adopt an omnichannel strategy and offer them click and collect as an option – keeping in mind that omnichannel customers have a 30% higher lifetime value than those who show using only one channel.
Furthermore, you can create social media campaigns to target similar audiences based on this cluster of customers to fully take advantage of the opportunity for your online store.
Cart Abandonment Rate versus Checkout Abandonment Rate
In the industry, we’re always talking about cart abandonment rates – how retailers need to focus on decreasing those percentages and best practices to ensure that customers haven’t been left in the dark about anything by the time they reach the checkout. All of this is valid, there’s no doubt about it. But when people refer to cart abandonment rates, more often than not they are actually talking about checkout abandonment rates – a different metric entirely.
Checkout abandonment is when a consumer has gotten to the checkout page of your online store, and possibly submitted some of their data before dropping off the page without converting.
Shopping cart abandonment is when a user puts an item or items in their cart and leaves your site, probably without having visited the checkout page at all.
The difference is subtle, but incredibly important. Once again, here lies an opportunity – if you’re solely focusing on checkout abandonment through email campaigns, etc., you’re missing out on a chance to persuade all of those potential customers who put products in their shopping cart to take the next steps and go to that checkout page – i.e. further down the funnel.
Technology that enables you to display contextual messages to users who are about to leave the site, as well as voucher codes, product recommendations, and browsing history reminders can be unbelievably effective for this.
The most valuable metrics are the ones that put into context the current position of your business, and spark action in terms of improving those specific areas. If your current metrics don’t tell you that story, chances are, it’s time to approach them from a different angle.