Running an online store can be hard work. You spend so much time working out how to get traffic to your site and then watch the numbers dwindle down with low conversion rates, cart abandonment etc. But for this reason it’s crucial to keep an eye on a number of key measures to stay up to date with how your business is doing.
1. Revenue and profit
The first thing to look at is revenue and profit. For any business online or not the lifeblood is cash-flow and revenue and profit should be monitored regularly. Pretty much every ecommerce platform will give you easy access to monthly revenue stats. Costs are harder to monitor and for that reason I like to use an online accounting platform like Xero or Wave Accounting so you can get your costs, revenue and full profit figures all in the one place.
2. Traffic
Getting traffic to your site is the first step in driving sales in an commerce store. You can’t sell anything if you have no customers. Some things in particularly you might to look at are:
You can easily get access to all of these measures in Google Analytics and some shopping cart platforms also give you some of this data in their reporting dashboards.
3. Conversions
Conversions are probably the biggest stat regularly viewed by ecommerce store owners. Small improvements in conversion rates can have a huge impact on revenue particularly if you have a high volume.
Depending on your platform of choice there are a few ways to do this.
They don’t always tell the whole story because the lifetime value of a customer might be a lot higher than just a one off sale but it’s still a great thing to keep an eye on. Particularly as you make changes to the site, you can easily see which changes you are making are having an impact on your conversion rates.
You can even take it a step further by using Google’s new content experiments feature in Analytics where you can serve up different versions of a page to different users and measure which ones convert better.
4. Repeat customers and retention time
In almost all businesses, it is much easier to sell to existing customers than it is to find and sell to new ones. Recurring businesses are a very attractive model so it’s worth looking at how many of your customers are coming back and how long it takes them to come back.
This way you can build your procedures around this. For example if they generally come back after 3 months, why is that? If they aren’t coming back, are you engaging them effectively enough.
Quite often something as simple as an automated post purchase email or follow-up will be effective at getting people (who have bought in the past) back to your site. And those people are much more likely to buy again than someone who’s come straight from a search engine for example.
5. Top products
Following the 80 / 20 rule roughly 80% of your profits will come from 20% of your products. This is of course very general but the principle is that focusing in on the products that sell more than others, or the products that have much higher margins than others can give you the maximum return on your time and money.
Your ecommerce platform should be able to tell you your top selling products. In addition, sometimes your search queries can provide good insight into this as well, if you are getting lots of visitors and higher conversions for certain product-specific search terms it could be worth focusing on these.
6. Cart abandonment
One of the more frustrating things as an ecommerce store owner, is going to the effort to get people to your site, having them go ahead with a purchase only to make it half way through the check out and then abandon their cart.
Making small tweaks to the checkout and the process (i.e. adding an abandonment email) can have a big impact on your abandonment rate.
To look at abandon rates, you are generally going to be looking at your ecommerce platform itself and the steps will vary from platform to platform.
7. Opt ins
A lot of the time when someone goes to a website for the first time they won’t be in a position to buy right away. I like to think about the process as being one of Consuming, Connecting then Converting.
The first step is getting people to engage with your content (consuming), the second is getting some sort of opt-in either via social media or email sign-up etc (connecting), then the final step is making a sale (converting). Some people will of course buy right away but most won’t so you have to do a good job at the consuming and connecting part and keep an eye on how many people are doing this.
http://addykho.com/
The first thing to look at is revenue and profit. For any business online or not the lifeblood is cash-flow and revenue and profit should be monitored regularly. Pretty much every ecommerce platform will give you easy access to monthly revenue stats. Costs are harder to monitor and for that reason I like to use an online accounting platform like Xero or Wave Accounting so you can get your costs, revenue and full profit figures all in the one place.
2. Traffic
Getting traffic to your site is the first step in driving sales in an commerce store. You can’t sell anything if you have no customers. Some things in particularly you might to look at are:
- Total traffic comparing month by month.
- Your top traffic sources – both referring sites and search engines.
- Your top 10 keywords to get an idea of whether you are effectively utilising SEO to bring more new customers (not just people searching for your business name or brand).
- What traffic is coming through deliberate campaigns you are running.
- Your % of new visits vs returning users – can do this by looking at customers manually as well.
You can easily get access to all of these measures in Google Analytics and some shopping cart platforms also give you some of this data in their reporting dashboards.
3. Conversions
Conversions are probably the biggest stat regularly viewed by ecommerce store owners. Small improvements in conversion rates can have a huge impact on revenue particularly if you have a high volume.
Depending on your platform of choice there are a few ways to do this.
- If the ecommerce platform you use supports this directly you can check out your dashboard and get direct access to your conversion rate.
- If not (and even if so) you might want to set up conversion tracking in Google Analytics. You can either create a goal of ‘a purchase’ and track the conversions to that goal or better still you can set up ecommerce tracking so you can measure financially how much your conversions are worth.
They don’t always tell the whole story because the lifetime value of a customer might be a lot higher than just a one off sale but it’s still a great thing to keep an eye on. Particularly as you make changes to the site, you can easily see which changes you are making are having an impact on your conversion rates.
You can even take it a step further by using Google’s new content experiments feature in Analytics where you can serve up different versions of a page to different users and measure which ones convert better.
4. Repeat customers and retention time
In almost all businesses, it is much easier to sell to existing customers than it is to find and sell to new ones. Recurring businesses are a very attractive model so it’s worth looking at how many of your customers are coming back and how long it takes them to come back.
This way you can build your procedures around this. For example if they generally come back after 3 months, why is that? If they aren’t coming back, are you engaging them effectively enough.
Quite often something as simple as an automated post purchase email or follow-up will be effective at getting people (who have bought in the past) back to your site. And those people are much more likely to buy again than someone who’s come straight from a search engine for example.
5. Top products
Following the 80 / 20 rule roughly 80% of your profits will come from 20% of your products. This is of course very general but the principle is that focusing in on the products that sell more than others, or the products that have much higher margins than others can give you the maximum return on your time and money.
Your ecommerce platform should be able to tell you your top selling products. In addition, sometimes your search queries can provide good insight into this as well, if you are getting lots of visitors and higher conversions for certain product-specific search terms it could be worth focusing on these.
6. Cart abandonment
One of the more frustrating things as an ecommerce store owner, is going to the effort to get people to your site, having them go ahead with a purchase only to make it half way through the check out and then abandon their cart.
Making small tweaks to the checkout and the process (i.e. adding an abandonment email) can have a big impact on your abandonment rate.
To look at abandon rates, you are generally going to be looking at your ecommerce platform itself and the steps will vary from platform to platform.
7. Opt ins
A lot of the time when someone goes to a website for the first time they won’t be in a position to buy right away. I like to think about the process as being one of Consuming, Connecting then Converting.
The first step is getting people to engage with your content (consuming), the second is getting some sort of opt-in either via social media or email sign-up etc (connecting), then the final step is making a sale (converting). Some people will of course buy right away but most won’t so you have to do a good job at the consuming and connecting part and keep an eye on how many people are doing this.
- You can measure consumption by keeping an eye on how long people are spending on your site (gives you an idea of whether they are reading your content) and looking at the bounce rate (how many leave after seeing just 1 page).
- Ways to measure connection are email opt-ins, Facebook likes, Twitter followers, RSS feed subscriptions etc. You can set up things like email opt ins as Google Analytics goals as well to give you more information on who is connecting.
- If you are using ways of engaging with your visitors like email newsletters and social media I’d also keep an eye on stats from those platforms (for example email opt-ins, opens, unsubscribes and clicks etc).
http://addykho.com/
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