E-commerce Analytics Masterclass: Lesson Four
What’s the first thing you do after setting up your online store?
Set up multiple campaigns to promote your products.
But how did you decide which platform to make the promotions on? You simply saw what similar stores were doing, took out an approximate advertising budget and got your campaign up and running.
Now while for some stores that strategy might just work; for most, it won’t!
Every shopper is different and the market trends are continually changing. So what worked for Amazon back then, might only lead you to lose thousands of dollars.
Deciding where to promote your business and how much advertising budget you should keep aside, is tricky.
So in this lesson, we’re going to share how to use Performance Analytics to optimize your campaigns for higher conversions and sales.
What is Performance Analytics?
The competition is increasing. The digital landscape is growing. While there’s so much data available, deriving actionables from it is becoming a challenge. That’s where Performance Analytics comes in.
A performance analytics platform enables you to track, aggregate, and visualize key metrics that define your success towards a goal, over a period of time.
Why do you need Performance Analytics?
Think about it.
You’re running campaigns on Facebook, Instagram, Messenger, the search engine, and even email.
On each of these platforms, you have different campaigns to promote different products and discounts.
So how do you keep track of what’s working – which campaign is driving more shoppers to your store (site traffic) and which ones are really resulting in more sales?
You’ll move from one platform to another like insights from individual social media channels to Google Analytics and your email marketing tool. You’ll pull in reports from each of these platforms, and even manually try to put together what seems like relevant metrics to you, in an excel.
But in the end, when you take a look at it all, it becomes all too overwhelming. So you just decide to carry on with your current approach – just running campaigns, hoping to reach the right consumers.
That’s why you need performance analytics for better marketing.
But what metrics should you be tracking with Performance Analytics?
E-commerce metrics to track with Performance Analytics
One of the foremost e-commerce metrics to track is your visitors. You need to know how many people are visiting your store in a week/ month, where they are coming from, what is their location, what are they searching for and what devices they’re using.
The more you know about your visitors, the better it gets!
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Not all online shoppers make a purchase on their first visit. Most would like to explore other brands offering similar products and deals that might seem more appealing. But that doesn’t mean they are not interested in what your store has to offer. That’s why some of your visitors may just opt-in for newsletters instead of making purchases.
The action of opting in for updates is a clear indication of their interest in your brand. Use the data for your email marketing campaigns.
Another simple yet important e-commerce metric to track is the purchases made on your store in a week/ month. This helps you understand how many of your visitors are really turning into customers.
For instance, if only 0.2% of your visitors are making purchases, your campaigns are not reaching the right audience.
The conversion rate simply refers to the percentage of visitors that come to your site and actually make a purchase. This e-commerce metric can simply be calculated by dividing the total number of sales made during a period by the total number of visitors on the site for the same duration.
Average order value
A successful e-commerce store is one that is able to identify the purchasing habits of their customers. Are they price-sensitive shoppers? Are they always looking for bundles or are they active only during the sales? Every customer’s spending power is different and that’s why you need to know the average order values across different segments.
Knowing how much your customers are able to spend, can help you create custom campaigns to nudge more purchase. Upsell, cross-sell and recommend products like a boss!
Customer acquisition cost
As you’re measuring the number of visitors and actual purchases that were made from your store, here’s another important metric to measure – your customer acquisition cost. You need to know how much does it really cost to get a visitor that turns into a customer.
If acquiring a customer costs you more than the value you generate from them on your inventory and marketing, you need to restrategize.
Cart abandonment rate
You’re going to win some customers and lose some, from all the visits you get on the store. But you need to know just how many potential customers just when you’re about to convert them – yes, we’re talking about cart abandonment.
The e-commerce metric indicates the percentage of visitors who browsed and added products to their cart but did not complete the purchase. The lower this number, the better it is!
Return on advertising spend
A typical online store will have at least two advertising campaigns running at a time. The only way to measure which one is really bringing them customers and is worth adding more budget to is calculating the return on advertising spend (ROAS).
You simply divide the revenue generated from purchases made via the campaign, by the total amount you spend on running the campaign.
Acquiring a new customer is five times more expensive than retaining an existing one. When repeat customers are responsible for generating 40% of the store’s revenue, it’s important that you measure this e-commerce metric closely.
To measure your retention rate, you need to be looking at two metrics – the number of customers at the beginning of the period and the number of customers who came back for repeat purchases.
The higher your retention rate, the better it is.
Psst. If you keep your customers engaged and boost retention, loyalty can bring you a lot of word-of-mouth promotion.
Average customer lifetime value (CLTV)
The customer lifetime value refers to the average value that each customer brings to your business over their lifetime. It helps your business estimate the revenue you will be generating from the customer in the future.
Knowing your CLTV, you can plan your marketing budgets for acquiring new customers better too!
Revenue by channel
It’s obvious that you’re running campaigns on multiple platforms to reach your customers. You have ads on Facebook and Instagram and you’re also actively sending out email campaigns. But doing so requires you to set aside budgets for each. That’s why it’s important to measure revenue by channel.
For example, if you’re running an email marketing campaign, it’s important to look into the open rate, click-through rate and the value of the sale generated.
Not sure how to set up your Google Analytics to track revenue by channel? Download our ready-to-use reports today.
Get ready-to-use e-commerce analytics dashboard templates for Google Analytics, right away!
Getting your data together
The current way of tracking and analyzing data is ineffective. But more importantly, it is prone to manual error.
E-commerce business owners and marketers often miss out on critical data, while moving from platform to platform. They don’t just lose out on understanding their shoppers, but also identifying market opportunities to increase their sales and revenue.
That’s where you need an e-commerce analytics platform like RevTap.
RevTap connects with your marketing and analytics tools with a single click. It then pulls the data from all these platforms to a unified dashboard that gives you a holistic view of your performance.
Right from the traffic to your site to how your social media and email campaigns are performing, the platform covers it all. It shows you which campaigns are performing the best, driving the most amount of conversions and revenue, and delivering a high ROI on the spend, helping you identify market opportunities in a timely manner!
Ready to put Performance Analytics to work?
Turn your marketing data into more revenue with RevTap
Now that you have all your marketing data in control, it’s time to start analyzing your store data.
In the next lesson, we’re going to cover everything you need to know about store analytics – how to optimize your inventory to match the changing market trends and purchase behavior, to how you can improve the product portfolio!
Did we get you interested?