Measuring Success: Analytics
Success is nothing without a way to measure it.
Studying important metrics — like conversion rate, click-through rates, average time on your website, page views, and number of visits — can provide your online business with rich information about your ecommerce features, customer behavior, and what’s working and what’s missing the mark.
Every business is unique — which means the metrics you track will be, too.
In this chapter, we’re going to dive into the value of measuring your online success, which key performance indicators may be of value to your business, and how to track and study the results.
Why You Should Measure Your Online Success
Bottom line: success is nothing without the numbers to prove it.
Measuring your ecommerce and marketing metrics can teach you a lot about how you run your business — and help identify areas for opportunity.
Here are a few benefits to having an analytics strategy for your business.
1. Provide a stronger pitch to investors.
Imagine you’re pitching your business on Shark Tank and you present with no numbers or data about your success. Sharks like Barbara Corcoran and Mark Cuban aren’t going to bite.
Having strong results behind your business is a key indicator for potential growth. Plus, the more specific your data, the more insight you’ll get into where and how investors can help you grow, such as by expanding to new marketing channels or capitalizing on areas to amp up your return on investment (ROI).
2. Monitor results in real-time.
For online marketing analysts, a simple look at an analytics dashboard can tell them when a landing page is down or when a rush of new visitors come to your website.
Tools like Google Analytics offer a real-time view and customized options to create a daily dashboard. This is also a feature available on ecommerce platforms like BigCommerce.
By collecting data and monitoring your results in real time, you can quickly correct or adjust your website or marketing strategy based on the activity that’s occurring.
This will help you find problems before they become too complex, and so you can optimize your customer experience earlier and inevitably keep your customers happier.
3. A holistic outlook.
When looking at key metrics for your online business — whether it be for an online marketing campaign or overall performance — they tend to paint a story.
Maybe you find that your business has great organic search traffic. This could be an indicator to continue driving your search engine optimization (SEO) strategy.
Maybe you’re seeing an exponential amount of new customers. This could be an indicator that your inbound marketing strategies – perhaps social media – is high performing.
Or — maybe you’re driving a lot of visits with potential customers who aren’t converting. This could be a sign that you need to take a new approach to ecommerce site merchandising or traditional marketing strategies.
Paying attention to what story your data is telling you can be a strong driver for future opportunity.
Key Performance Indicators (KPIs) to Include in Your Online Marketing Strategy
Data can give us a lot of information — sometimes too much to easily digest.
Understanding what key performance indicators (KPIs) to track is dependent on your business and what tactics you’re rolling out.
Popular KPIs to track for an online business include:
Website traffic (including new visitors and returning visitors).
Conversion rate.
Bounce rate.
Referral traffic.
Click-through-rate (CTR).
Pay-per-click (PPC).
Pageviews.
Average time spent on your site (or specific landing page).
Average order value.
Site speed.
And more.
Generally speaking, there are three buckets of KPIs to consider.
1. Ecommerce data.
Small business owners need to understand their ecommerce website data for various reasons:
To ensure their ecommerce platform is performing,
To understand customer journeys, and
To learn what site content or merchandising is performing best.
Here are a few ecommerce KPIs and why they’re valuable:
Key Performance Indicator (KPI)
What it measures
Why it’s valuable
Sales
Total number of sales by the hour, day, week, month, quarter, or year.
Monitoring sales will indicate growth and seasonal trends — and can help you plan your inventory for high-traffic periods.
Average Order Value (AOV)
How much a customer typically spends on a single order.
This can help you decide how to price your products and where you may have an opportunity to create a product bundle or kit, or choose where to cross- and up-sell.
Conversion Rate
A percentage of how many visitors convert.
A healthy conversion rate means you have a highly engaged customer base and is a sign of growth and success. If it’s low, look to user journey mapping to see where you’re losing site visitors.
Shopping Cart Abandonment Rate
The percentage of visitors who abandon their cart during the checkout process.
If you have a high cart abandonment rate, this may be a sign you need to optimize your checkout process. Learn more by looking at where in the process they are leaving.
Traffic (New vs. Returning)
The number of people that visit your website. How many of these visitors are new vs. returning users?
If you have a lot of new traffic, this is a sign your marketing strategy is reaching new people. If you have many returning users, this is a sign your customer loyalty and engagement is high.
Site Speed
The speed of your website and specific landing pages.
Fast load times are crucial to the success of your online business. This KPI will help diagnose any speed issues on your website.
Bounce Rate
The percentage of users who leave your website after viewing only one page.
If you have a high bounce rate, this could be a sign that your content is not resonating with your target audience.
Traffic Source
Where your visitors come from and how they get to your site.
This KPI can help pinpoint which marketing strategies are working. If it’s traffic from Google search, it could be from your SEO. If it’s from LinkedIn, it could be your social media marketing efforts. If it’s direct, you may have great content marketing and a very loyal customer base.
Mobile Site Traffic
How many visitors come to your site via a mobile device.
Understanding mobile site traffic is an indicator of how customers experience your online business. If you’re experiencing high traffic via mobile devices, make sure your site is fully optimized for mobile use and consider developing a mobile app.
Day Part Monitoring
What time of day you have the most visitors.
Understanding what time of day customers visit your website can give your team ideas on when to push promotions or drop new launches.
Product Affinity
Which products are purchased together.
This can help you brainstorm cross-promotion strategies.
2. Marketing success factors.
When you’re rolling out digital marketing campaigns, you’ll want to understand how they are performing.
Common types of campaigns include:
Paid social,
Affiliate marketing (like working with influencers), and
Paid search.
Here are a few marketing KPIs and why they’re valuable:
Key Performance Indicator (KPI)
What it is
Why it’s valuable
Pay-Per-Click (PPC)
How much traffic you’re successfully driving to your site from a paid search campaign.
This can help you determine if the keywords you’re targeting your spend on are accurate for your business.
Click-Through-Rate (CTR)
The percentage of users on a page (or asset) who click on a link.
This is a key indicator to determine if your content is driving engagement.
Subscriber Growth Rate
The rate by which your subscriber list is growing.
This will provide insight on whether your content is resonating with your target audience or not. It will also be a sign to spend more efforts on content marketing.
Email Open Rate
The percentage of email recipients that open an email that is part of an email marketing campaign.
If your rate is low, try using new, creative subject lines, or try cleaning out your subscriber list by removing inactive users.
Social Followers
How many followers your brand has across your social media profiles.
Social media following is an indicator of how large your customer community is — and whether or not they enjoy and engage with your brand and content.
Number and Quality of Product Reviews
An audit of the quantity and quality of product reviews.
Product reviews help with your website’s SEO and offer valuable feedback for your business. This is a key indicator of your customers’ overall satisfaction.
Banner or Display Advertising CTRs
The percentage of viewers who have clicked on a banner or display ad.
This will help you evaluate the quality of your copy, placement, imagery, and offer.
Blog Traffic
How many users visit your blog, whether they are new or returning visitors, and how many pages they visit.
This can help you evaluate the quality of your content and determine if your blog is a true driver of overall site engagement.
Affiliate Performance
From which affiliates or channels do you get the most gain from your affiliate spend?
Monitoring this will help you understand which channels are most successful for affiliate work.
Average Position (Search)
How and where you rank on search engine results pages.
This will tell you if your site’s search engine optimization (SEO) is healthy. Most brands aim to rank #1 for related keywords.
3. For the small business owner.
Last but not least, you’ll want to have a high-level picture of how your business is performing.
This can be incredibly helpful when pitching to investors or building your scalable business plan.
In addition to all of the metrics we’ve talked about thus far, you’ll want to pay attention to the following key performance indicators (KPIs):
Key Performance Indicator (KPI)
What it is
Why it’s valuable
Customer Lifetime Value (LTV)
How much a customer is worth to your business over the course of their relationship with your brand.
A great measurement of overall customer loyalty. You should work to actively increase this number.
Customer Acquisition Cost (CAC)
How much your company spends to acquire a new customer, measured by looking at your marketing spend and how it breaks down per individual customer.
This can help determine your brand’s total ROI for marketing and advertising. Having an active awareness of your CAC can help prioritize campaigns within your budget.
Gross Profit
The total cost of goods subtracted from total sales.
This will tell you whether or not your business is profitable.
Average Margin
The percentage that represents your profit margin over a period of time.
This indicates the overall growth and state of health for your business.
Cost of Goods Sold (COGS)
How much you’re spending to sell a product.
Factor in manufacturing, employee wages, and overhead costs, and determine if your spend is validated.
Competitive Pricing
What your competitors are charging for a similar product.
This is part of a competitive analysis strategy and will help you gauge your success.
Analytics Tools
Now that you have an idea of what to measure, where and how do you do it?
Most ecommerce websites utilize a tool like Google Analytics to keep daily tabs on their chosen key performance indicators (KPIs).
In tools as such, you can set up daily dashboards, customized reporting, and even see your site activity in real time.
In addition, ecommerce platforms like BigCommerce come built with an easily accessible and highly informative dashboard that offers an overview of your site and sales performance.
Other popular Google suite tools to use for your online business analytics are:
Next up: how to plan for scaling your business. With these analytics, you’re already one step ahead.
