Data is the foundation of any ecommerce strategy. Think of the giant pool of data you collect on your site visitors as clay. In order to build a strong foundation, you need to use the best material as the bricks. While any and all data could be important to an extent, the trick is finding the right data and analyzing it for improvement.
The truth of the matter is that with so much information available from a vast array of sources, it’s easy to get lost in the crowd and buried under endless reports. As a result, it becomes much harder to know exactly what information is really important in driving ecommerce sales.
Let’s take a look at four key metrics to keep a critical eye on to boost online sales.
1. Total Traffic
Let’s start with the basics. Total traffic is a metric that shows exactly how many people visited your website within a certain timeframe.
Keeping a close eye on your total traffic helps you learn about any increases or decreases in visits and how substantial they are. This metric includes visits from every source, such as social media, email, referral, direct, or organic.
Although this information does not reveal reasons to make changes in your campaigns, it sheds light on patterns and indicates if you need to investigate.
There are many ways to promote your website and increase your traffic. Start by investing in as many non-paid sources of traffic as possible. These include taking advantage of content-based digital channels like organic search, social media, PR, or emails.
Perhaps one of the greatest ways to increase traffic is by creating irresistible headlines for your content. These well-constructed bits of copy compel people to click on your links and explore your page. Buzzfeed is a prime example of this. They have literally built their business on catchy headlines that draw attention. In turn, their website attracts over 200 million monthly visitors.
Keep in mind, a good headline should lead to great content. If your content turns out to be little more than clickbait, it will not keep your visitors in the long run.
2. Conversion Rate
Across industries, the average global conversion rate is less than 3%. While conversion rate taken by itself is not a business goal to focus on, it is a key indicator of the success of channel-specific campaigns.
There are many factors that play into conversion rates and a myriad of ways to improve it. You must have to improve your landing pages, improve checkout process, shipping functionality, payment getaways and many more. Here are a few to think about:
Clarify value – Value is the main reason why someone should buy from you. Regardless of your product or service, you should always provide the customer with as much background information as possible. There should be no questions or doubts left in your site visitors’ minds when they are contemplating a purchase. A survey conducted by IDG found that up to 50% of potential sales are lost due to inadequate information. Be sure to include images, videos, and reviews to help strengthen the benefits for the customer.
A/B testing – There are tons of different variables you can analyze on your website that influence conversion rates. Things like placement or size of call-to-action buttons, different headlines, color schemes, copy style, pictures, videos, or even the entire page layout can all be analyzed. There are so many different things you can split test that it should be a constantly-evolving project.
Make the buying process easy – What is the top ecommerce/retail site in the world? Amazon, of course. One of the defining features of their platforms is the “1-Click” checkout option.
Buying options won’t likely be this easy for you. But you should keep the fields the customer has to fill out to a minimum while providing clear guidance throughout the whole checkout process.
Driving conversion rates is a science. It takes a great website with stellar content. For retail websites, every element on your product pages – not just the call to action – contributes significantly to making the sale. A DIY ecommerce platform such as Shopify helps you tweak everything from content to landing pages, digital coupons to shopping cart, emails to app integration, to make sure your site is converting visitors from all devices and sources.
Investing in a compelling website is the most important thing you can do for an online business.
3. Repeat Customer Rate (RCR)
This metric is also very simple to calculate:
Repeat customers are heart and soul of business. A common mistake many startups, retailers, and service providers make is electing to pour a huge portion of their resources into acquiring new customers when in fact, repeat customers are far more valuable for several reasons.
- Repeat customers spend more than new customers. A study by Bain & Co found that an online shopper’s fifth transaction was 40% larger than their first. The tenth transaction was 80% larger.
- Repeat customers are happy customers. They can do a lot to promote your business, and are more likely to give you positive reviews. This can give a huge boost to your conversion rate, as 90% of online purchases are influenced by reviews.
- Repeat customers help you validate your data you have on demographics, buying behavior, and personas. This information is great for helping with your market research so you can better satisfy your target audience and segments.
Keeping customers coming back can be attributed to a number of different factors that go beyond a stellar product or service. Perhaps one of the best ways to earn repeat customers is by providing a superior level of customer service.
And nearly all brands have taken note. Playstation does a great job at fielding questions on Twitter. Like many major brands, they have a dedicated Twitter handle for customer care:
They pride themselves on providing friendly support to users in a timely fashion. Social media support is a trend (forced by changing consumer behavior) that a lot of companies have been slow to adopt, but it has potential to be one of your best customer service assets.
4. Customer Lifetime Value
CLTV or CLV or LTV is the measurement of the total amount of money a customer spends throughout their entire relationship with a business. This is an extremely important metric to take into account, because ideally, you should be earning much more money from a customer than you spent acquiring them.
(Average Revenue Per User) x (Gross Margin) x (Average Retention Time)
Improving LTV is no easy task. Look into ways you can increase the Average Order Value. This can include upselling directly on your website. When a customer is browsing, do not fail to suggest relevant items they might want to add to their purchase.
Upselling is good for both the buyer and the seller. Forrester research analyst Sucharita Mulpuru estimates that product recommendations like upsells and cross-sells account for an average of 10-30% of ecommerce revenues.
The Bottom Line
Ecommerce platforms live and die by the data. Don’t just track these metrics for the sake of tracking them. Any time your traffic drops off and you find time to breathe, take a step back and examine what worked and what didn’t during your seasonal campaigns. Ecommerce is a never-ending field of tweaks and improvements. Use each bit of insight from your dashboard and turn it into a plan on the drawing board. Good luck!