Let’s imagine your ecommerce business is nearly a year old.
The past year has been part hard, part exciting, and some effort seems to be paying off. You are now attracting some customers and along with them some orders on your website as well.
Although you are just about breaking even and not yet making profits, it is satisfying to note that your product is being accepted and appreciated by customers. Some of them have also posted positive comments on social media and slowly there seems to be a growing interest around your brand.
You are in a happy space. Fingers Crossed!
This is just the way you had hoped it would be. So can you call this business a “success”?
One can assume that your venture has been reasonably successful. But rather than making guesstimates, is there a more objective way to measure the success of the online store? Yes there is, using data and metrics.
Measuring Success
Analytics can provide a huge number of insights on the functioning of any business that can help you make data-driven decisions. Your Shopmatic account includes a built-in analytics capability that provides valuable insights on the volume of your sales transactions on a daily, weekly or monthly basis.
You can also track your business growth on Google Analytics via your Shopmatic account, which is a commonly used tool by ecommerce businesses. This can generate a wide range of information on most areas relating to traffic and conversions and goals. Such data and reports can also help in developing new strategies to drive future growth – so make best use of this extra resource.
The Metrics to Look Out For
1) Revenue and Profit
The first metric that comes to mind when looking at any business success is revenue growth, but this is hardly the only yardstick.
In fact, even while staying focused on the goal of revenue maximization and cost minimization, it is best to look at profit margins as better indicator of the bottomline performance.
2) Conversion Rate
Having visitors to the website is nice but till the visitor transforms to a paying customer, he is not really enriching your bottomline.
The measure for the success of your online store thus is dependent on the Rate of Conversion. A low conversion rate could be an indication that perhaps there are some areas of improvement necessary at the website itself.
3) Average Order Value
Initially, new customers are probably just trying out your product. But with time, and growing traction, your order values will hopefully get bigger. Such higher average order value indicates that customers are showing more confidence in your products – another proof point of the success of your business. Cross selling and offering free shipping can also help incentivize your customers to add more products to their carts.
4) Traffic Sources
This basically helps you in understanding how the visitors get to your store which in turn can help you refine and redesign your marketing initiatives.
For example, has your investment in content optimization led to an increase in search traffic or have the investments in social media marketing seen an increase in such traffic?
5) Cart Abandonment Rate
The lower this figure the greater the success of your business. There are sometimes visitors to your site who load their cart and then abandon it – not desirable but it is important to understand why this is happening.
Making the checkout process simple with all relevant information clearly visible is helpful. That’s how you can make sure that all such shoppers become paying customers.
While this list is not exhaustive, these are some of the more important metrics to look out for to ensure the success of your online store.
Making use of the variety of tools that are available on the web can help produce easy to understand reports that explain the strengths and weaknesses of the business.
Using these tools optimally will help in fixing every shortcoming of your business and pave the way to scale new heights and even greater success!
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