June 14, 2021
Growing your business is great. However, knowing why you’re growing is just as important. Once you understand what drives interest (and ultimately, generates revenue) you begin to develop your recipe for success, cultivating a business and marketing model that is as intentional as it is successful.
Luckily, eCommerce is a platform rich in both metrics and data. Together, this information will tell quite the story as long as you take the time to piece it together. Let’s break up metrics and data into three categories; website, marketing, and order fulfillment. Let's explore each one.
Website Metrics and Data
Your digital storefront can have many doors assigned to it (think of Amazon, Facebook, Instagram, etc.) but for the sake of simplicity, I'm going to focus on your retail website and dive into the kind of metrics and data you should be tracking on this level.
1. Traffic Source and their Conversion Rates
If you had a business with multiple storefronts, then you would certainly know which of those stores is the highest earner, and would also have each subsequent ranked by its sale volume. You can do this online as well. After all, your digital storefront has multiple points of entry. Why wouldn’t you want to know which is most effective? Urchin Tracking Module (UTM) codes do exactly that. Using UTM codes you can track who visits your page, from where, and through what campaign. Moreover, UTM codes give you the ability to see which traffic source ends in the most conversion.
2. Product Conversion Rates
All of the most popular eCommerce platforms will allow you to track your products, giving you insight into which products receive the most attention as well as which products ultimately end in the most sales. The correlation between views and buys is not always intuitive; having this hard data can help you better understand how your products and pages are performing.
3. Funnel Abandonment (Shopping Cart Abandonment)
Your shopper's journey is a funnel; it starts broadly (minor interest) and narrows as they move until, finally, you have a sale. With backend tracking data, you can see where along this journey your customers are hitting roadblocks, which can help you remove those obstacles.
4. Return Customers
Most businesses depend on a returning customer model to sustain themselves. After all, there are only so many new faces out there. Having a reliable customer base is a safer, surer way to generate consistent revenue. Luckily, online shopping platforms can track who is returning, giving you tools to determine why this may be. Furthermore, using visitor tracking you can even deploy a “remarketing campaign”, which will deliver targeted ads to previous shoppers to entice them to come back.
5. Customer Lifetime Value
Wouldn’t it be nice to see a dollar sign above every customer’s head? It would tell you how much of your own money is appropriate to invest in their continued support. eCommerce can do this, more or less, and it’s known as the “customer lifetime value” (CLV).
Cutting-edge eCommerce platforms do all of the work of calculating CLV for you. When you work with sophisticated tools, you get access to sophisticated data.
Marketing Metrics and Data
The data you aggregate throughout a digital marketing campaign is a valuable wellspring of information. It tells you what messaging works best, which in turn paints a clearer picture of your ideal shopper. Marketing is essential because it’s both an exploratory practice (who is my demographic?) and a communication method (let me tell them about my business). There are various methods for tracking marketing efficacy, all of which act as a piece of the puzzle.
Email is a powerhouse of information. Even the simplest email campaign platforms will tell you who is subscribing to your email list, who is opening, unsubscribing, clicking links, and how effective your emails are at converting customers. I like to think of email as a giant barometer; it reads the room and gives you fine-tuned data to tell you everything about the state of that room! Here are some tips on how to get your emails opened.
7. Organic Metrics
Of course, marketing is still very much about "pounding the pavement". Effective marketers appreciate the value of engaging with their audience as well as with adjacent brands, who ultimately share their demographic. However, all of this hard work would be in vain if you couldn't track its efficacy. Website tracking will tell you how well backlinks (people who find your website URL on other sites) are working, and if people are coming to you from the comments section of another site, for instance.
8. Ad Metrics
While email campaigns are affordable and organic traffic can rely on resources outside of your marketing, a solid digital ad campaign will always be an investment. Luckily, campaign performance is easy to track and measure. Common ad metrics include click-through rate, conversion rate and impression.
A common tactic in measuring ad efficacy is called A/B Testing. It works just like you might think; you have two ad variants and, through the use of data tracking, you see which is more effective and who it's most effective with. Through this scientific process of trial and error, you can hone your marketing to a fine edge.
Beyond testing, you will want to bring back metrics we covered previously like click-through-rates, impressions and conversions. These will all provide useful insights to drive your next steps.
Order Fulfillment Metrics
Your ability to understand your customer is a huge part of the larger picture of running a successful digital storefront. However, the lasting impression will always be the efficiency in which the thing your customers purchase arrives at their door. Order fulfillment metrics are just as important when measuring your eCommerce store’s success.
9. On-Time Shipping
Your platform should be tracking this metric and you should be deeply invested in the on-time shipping rate of your business. Delayed shipping is a huge detractor and it will result in losing out on those valuable return customers I spoke of earlier. Working with a professional fulfillment partner will help ensure a positive on-time shipping metric.
10. Error Rate
What is worse, getting your product late or getting the wrong thing? For me, the burden of receiving something I never asked for can, at times, feel even worse than a delayed shipment. Your fulfillment processing center isn’t perfect; mistakes are bound to happen. However, you need to know your error rate and have a reasonable rate of error in mind (less than 2% is ideal).
11. On-Time Receiving
Once something you shipped leaves your warehouse it’s out of your hands, right? Not entirely. Tracking on-time receiving is important in developing your relationship with shippers. You would be surprised how much clout you can have with even the largest couriers.
If your products are leaving your warehouse on time but not getting to customers’ doors on time, then you need to make some challenging calls to your shipping company to determine whether this is an ongoing issue or can be overcome. The only way to be proactive about this is through measuring and tracking on-time receiving data.
12. Inventory Accuracy
The accuracy of your inventory is paramount to the credibility of your eCommerce store. You can’t sell something you don’t have. Furthermore, you don’t want to run into a situation where your inventory is inaccurate in either direction. An eCommerce platform with an accurate inventory movement solution is a must-have.
Successful eCommerce is About Insight
No matter how you cut it, a successful eCommerce is all about insight. With data and metrics, you have the information at your disposal to understand what you do well and what could use improvement. With insight comes foresight; soon enough, you'll have the strategic advantage, through data and reporting, to look forward to the future.