8 E-commerce Metrics Every Business Should Measure
With a wealth of reporting tools and the simplified follower counts of social media, it can be tempting to measure the progress and success of your online business by headline e-commerce metrics alone. However, while these numbers can be helpful and even indicative of a company moving in the right direction, they rarely tell the whole story. Worse yet, some are simply vanity metrics that are often and almost always misleading. To find out how your online business is really performing (or not), you'll need to dig a bit deeper.
8 E-commerce Metrics to MeasureFor an online business, the humble website tends to be the hub of all activity. Sales can certainly happen on other platforms - and a lot of your traffic originates on social networks or the customer's inbox - but most of the action happens when they hit your site. Thankfully, this is also where you can track their actions and make the most of your measurement. Assuming, that is, you understand your user objectives and how to quantify them. Below we discuss eight vital e-commerce metrics that every owner or marketer should measure and understand in the context of your business. Organic Search Traffic The number of visitors who land on your site from unpaid, aka “organic,” search results. This is an important e-commerce metric, because the traffic is free and often highly targeted to the products or services that you sell. Organic search visitors have typed in a keyword that's relevant to what you sell. Search engines like Google and Bing should ideally serve up only the best most relevant pages, meaning that those who find your site via search results are highly engaged and interested in what you offer. Optimizing your site for quality, relevant content is the best way to drive organic search traffic. This metric should be checked regularly so that you can understand how well your site pages and content marketing plan are performing. If your numbers from this source start to drop, it's vital to spot the trend early so that you can take action to win back this valuable source of site traffic. Conversion Rate Calculated by dividing the number of site visitors who convert to paying customers, this metric is obviously key for any online business. Without conversions, an e-commerce site is just a research stop on the road for customers who end up buying from your competitors. Conversion rate rates from sources like email campaigns, promotions and other advertising resources to determined which methods are most effective in converting visitors. However, it's important to remember that your conversion rate isn’t limited to sales alone. Your business should also include conversions on the road to an eventual purchase, such as viewing a key product page, signing up for your e-mail list, submitting a contact form, or placing a phone call. All of which brings us to... Sales Channel Contribution So you know when visitors to your site convert, but do you know where they came from? If not, you can spend a lot of money on channels that aren't working. These are marketing dollars that could be better spent on established channels that are pulling their weight, or exploring new platforms that you think have potential. Either way, it should start with monthly reporting on where your paying customers come from. This report can include:
- Visitors from different social networks,
- Paid search (Adwords, Bing Ads, etc),
- Banner ads and display network visitors,
- Referral traffic from key sites, such as affiliates, partners, andbusiness directories,
- Performance of different phone numbers, such as tracking number sets or different area codes,
- Any other significant source of traffic that contributes to your conversions.
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