Thanks to ecommerce analytics systems we need not make faith-based decisions. We can counter false assumptions with data and correct our course before blindly putting our money and effort in methods which won’t drive results. We can fail fast and see what our customers love or dislike about us.
- You can see if your new online store design is adding to your bottom line or sabotaging it.
- You can see which of your Facebook Ads are bringing in loyal users to your business.
- You can see which of your digital marketing channels bring in the most number of customers.
- You can test if your new hip consultant recommendations have improved your conversion rates.
- You can challenge ecommerce industry “best practices” and implement changes which work for your business than relying on hearsay.
In short, analytics helps us
- Do more of what is working
- Stop what is not working
- And steal you competition tactics without anyone knowing
However, three core challenges have persisted despite sophisticated ecommerce analytics tools.
- We are data rich but information poor. We have enough data bombarded at us by analytics tools but little understanding of what to do with it.
- With so many numbers reported by our analytics tool, it is quite possible that we fall into the delusion of vanity metrics. Vanity metrics are numbers which show improvement but doesn’t necessarily tie into a business outcome. Common vanity metrics are visitors, time on site, pages per session.
- Having an ad-hoc approach to analytics might backfire. Quite often digital marketers assume that putting a code on site and running reports every week is a job done. But chances are that the data collected might not have integrity, chances are reports you are churning out are not read by anyone in your company. Chances are the tools which you are using to gather ecommerce data is not right for your business.
The goal of this article…..
Most ecommerce analytics articles focus on how to get started with Google analytics for ecommerce and jump right into a bunch of Key Performance Indicators(KPI) one needs to start measuring.
This article takes a more holistic approach to defining the primary business objectives of an ecommerce business. It demonstrates how you can define and measure KPIs which tie into each business objectives. Also covered is how to get insights into your data using smart segments and what kind of actions could possibly impact each of those KPIs. This article is an effort to cut through all the junk around ecommerce analytics and just stick to the absolute necessity.
We will approach ecommerce marketing analytics, not with geeky jargon but simple understanding. The goal is to get insight into our past actions and clarity over how to influence our future business outcomes.
Table Of Contents
Chapter 2: Collecting Website And Ecommerce Data Using Google Analytics
Chapter 3: Collecting Customer And User Data Using Online Surveys
Chapter 4: Ecommerce Measurement Basics: Goals, KPIs, and Segments
Chapter 5: 4 KPIs Which Improve Revenue
Chapter 6: 5 KPIs Which Cut Costs
Chapter 7: 2 KPIs Which Measure Customer Loyalty
Chapter 8: Getting It Done
Finding The Right Analytics Tools For E-Commerce
Once we have made a commitment to make our ecommerce business data driven it is time to pick an ally a.k.a an Analytics tool which will help us through our journey.
Every ecommerce business is different. An enterprise B2B ecommerce site might need an analytics tool which is more technically heavy but a small online store might do good enough with its in-built ecommerce platform analytics. Instead of declaring my favourite ecommerce tools upfront I want to list a few pointers you should use to pick the right ecommerce analytics tool to help you guide your own ship.
- You need tools which are built for ecommerce data – They should measure critical ecommerce metrics like cost of acquiring a customer, abandonment rate, Customer Lifetime Value and Return On Ad Spend.
- You will need more than one tool to capture different types of data – You will need a tool to understand user behaviour on your site. A quantitative analytics tool like Google Analytics is a good option. You will need to understand why a user lands or decides to exit your site. For that, you will need a qualitative analytics tool like SurveyMonkey or Qualaroo. You should see what your competition is up to steal their tactics. A tool like SimilarWeb or Opensiteexplorer is a couple of options.
- Don’t Go Fancy – Google Analytics (if installed right) takes care of most of your ecommerce data collection and reporting. There are only 2 cases you should think beyond Google Analytics – One if your online store is getting tens of thousands of visits per day or if you need to measure metrics which are beyond the scope of Google analytics tool. If you are looking to capture user data (which you should) a free version of SurveyMonkey, Webengage or Typeform should be a good start.
- Think long-term – Switching analytics tools means you are losing historical data. Also, there are analytics tools which charge higher as the number of users goes up. Ecommerce is a margins game more so as you scale your business. You don’t want your analytics costs to eat up your margins in the long run. Check for such clauses in the pricing model.
- Your analytics tool should integrate with your ecommerce platform – This is critical as your ecommerce platform has the most accurate data when it comes to product sales, revenue generated and customer lifecycle. Use ecommerce analytics tools which ties click data to business outcomes as reported by ecommerce platform you are using. This also ensures that you are not dependent on your IT team. Thus reducing your costs, time and effort.
- Think Support – Free analytics tools like Google analytics might do the job for you without hurting your wallet but they don’t have a Support system. If your team doesn’t have the necessary skill to slice and dice data you might need some support from an expert. This is an option which you get only when you pay a premium. Make a choice appropriately.
3 Unique Analytics Tools To Capture E-Commerce Website Data
There are many analytics tools out there. I am mentioning here the bare essentials which businesses of various sizes can use and the ones I worked on and found pretty handy.
Google Analytics – Google Analytics is one of the most popular tools with advanced features which cater to ecommerce businesses. You can find deep levels ecommerce data like cart abandonment, checkout behaviour across desktop and mobile, internal promotions data, product performance and customer lifetime value. Google analytics comes with a free version which fulfils most of your ecommerce measurement needs. Its popularity has lead to many online tutorials and plugins which can be of help if you are stuck.
RJMetrics – RJMetrics is an analytics tool specifically designed for ecommerce businesses. It reports data on all aspects of an ecommerce business like customer acquisition, customer retention, and customer loyalty. RJMetrics is a Magento company but has integrations with major ecommerce platforms like Shopify. It integrates with popular Ad networks like Adwords and FaceBook. You can import data from Google analytics too. RJMetrics is ideal for enterprise ecommerce stores which use custom CMS and deal with orders on the scale of thousands per day.
Woopra – Woopra is an ecommerce analytics tool which tracks a customer journey of each profile. This is a great tool if you want to engage repeat customers. Every person who has created an account with your online store is assigned a profile. Once the profile is assigned it tracks the user’s journey based on a set of actions performed like “last login”, “read the blog post”, and opened email”. This allows you to personalize your ecommerce promotional emails much better or even personalize the on-site experience in real time. Woopra integrates with popular ecommerce platforms like WooCommerce, Shopify, and Magento. It integrates with popular Ad networks like Adwords and Facebook Ads.
3 Tools Which Capture User and Customer Data
You should capture user data and customer data in order to understand pitfalls in your website, business operations and customer service. Survey tools like the ones below help you achieve this effortlessly.
Survey Monkey – Survey Monkey is a popular survey tool which can be used to capture customer data and make meaningful stories out of it. You can create a survey for your website visitors and customers and promote it via various channels like your website, email, mobile app and social media. Once users share their answers you can analyze using SurveyMonkey’s analytics and improve your website, offers, products, and service.
Qualaroo – With Qualaroo you can take and analyze real-time customer in your app and website. By asking the right questions you can uncover problem areas in your conversion and engagement rates. You can target the user based on where they come from and which page they are currently browsing. One notable feature of Qualaroo is that it understands the sentiment, emotion and keyword clouds of open-ended questions automatically. This helps you skip reading long chunks of tedious customer feedback text.
Survicate – Survicate is a fantastic tool for trigger based surveys. One highlight of Survicate is it can predict exit intent of a user and pop a non-intrusive survey form asking why the user is planning to quit the page. This will let users give very specific issues with your page. This, in turn, can help you optimize your checkout and landing pages. Survicate is available for easy plugin installation on Magento, WooCommerce, and Shopify.
3 Analytics Tools To Capture Competition Data
Checking on your competition helps you understand what is working in your industry. It is like saving time by stealing tactics instead of wasting time on guesswork.
Google Alerts – Google Alerts is a free tool you can use to capture multiple keywords in your industry. Once you create an alert for popular keywords in your industry or your competitor brand names Google sends you regular emails listing all the places where the particular brand name or keyword was mentioned. This way you can keep a tab on your competition and news sources you got mentioned.
Ahrefs – Ahrefs Site Explorer is a great competitor research tool if you want to get insights into search marketing efforts of your competition. Using this tool you can see what keywords your competitors are ranking for and which pages bring in most search traffic. You can see which website your competitors are linking to and gauge the quality of their backlink profile. You can also see which landing pages and keywords your competitors use for their Adwords campaigns.
SimilarWeb – SimilarWeb has traffic and engagement data for millions of websites. Once you enter your competitor’s URL it shows you various metrics like
- Total traffic your competition gets per month
- digital channels which your competition gets the most traffic from
- Engagement Metrics like bounce rate
- Countries your competition gets most of its traffic from
- What categories does your competitor’s audience have the most affinity towards
- What percentage of your competition traffic is paid
Collecting Website And Ecommerce Data Using Google Analytics
For the purpose of this article, I will pick Google Analytics (free version) and demonstrate how to measure each critical Ecommerce KPI. Also, since Google Analytics is something most businesses large and small use everyone can take action based on this article.
4 Steps To Collect Advanced Google Analytics Data For Your Online Store
In order for Google Analytics to report data, we have to help it collect data. And since we are focused on collecting ecommerce data we need to do much more than just installing a piece of code. The following steps will ensure we collect all the required data to make meaningful analysis.
Since these steps might be too technical for few marketers I am leaving links to tutorials for implementing each step. This will also make it easy for your tech implementation team.
Step 1: Create a Google Analytics Account. Tutorial
Step 2: Integrate Google Analytics with your Ecommerce Platform. Follow these links for each ecommerce platform integration – Shopify, Magento, BigCommerce, WooCommerce
Step 3: Enable Ecommerce Tracking – This is where you tell Google that your site is an ecommerce site. Once you enable this Google Analytics will start reporting data like product performance, sales performance and transactions. – Tutorial
Step 4: Setup Enhanced Ecommerce – Enabling ecommerce tracking is good but it won’t report critical metrics like cart abandonment, checkout behaviour and internal promotions and offers. Enhanced ecommerce is where is the meat of ecommerce analytics is. For this, you will have to install a unique piece of code in your shopping cart. The following resources should help your technical team get this done
Whether you have implemented analytics before or just started it is worth implementing a set of best practices to ensure there is both data quality and integrity. This helps us in three ways –
- Remove glitches and loopholes which skew our analysis and insights
- Check if we are tracking all the necessary data to make right decisions
- To gather confidence in all our future research.
The resources below will help you do a thorough audit of your Google Analytics setup on your online store. It covers both regular analytics and enhanced ecommerce analytics testing too.
- Google Analytics Audit Checklist with Google Doc by Distilled
- Ways to test ecommerce analytics Setup by LunaMetrics
- Google Analytics Debugger Tool For Developers
- Enhanced Ecommerce Demo Store
Track these Micro Conversions on Your Online Store
Before I close this chapter I want to touch upon a small yet important topic of micro conversions. Micro conversions are activities that users frequently engage in before purchasing. Common examples are user checked out your blog, Viewed contact page, Added product to cart and the like.
Setting up micro conversions helps you understand user journey in detail. It will help you understand what people who don’t purchase do on your site. It will give a complete picture of your digital marketing efforts. It leads to the better attribution of your digital marketing efforts.
So every time one of the above micro conversions are achieved your Google analytics should record a goal. For this, you have to create goals in your Google Analytics settings section under view.
Whether you are tracking micro conversions or macro conversions you have to set up goals. And the procedure to set up goals is similar too. Follow the video below to get a detailed view of how to set up Goals.
Once you have understood how to set up goals it is time to setup micro conversion goals for your ecommerce store. You can begin with setting up goals for the below micro conversions.
Possible micro conversions in ecommerce
- User Account Created
- Email Subscriptions – Newsletter, Promotions and Blog Subscriptions
- Product Added To Cart Or Wishlist
- Number of people who applied for a job
- Used product comparison tool
- When a product video or a commercial is viewed
- Download products Brochure
- Used your lookbook or customization tool
- Engagement Goals like pages visited per session
More Resources for Setting Micro Conversions
Collect Customer And User Data Using Online Surveys
While quantitative tools like Google analytics tell you where the problem is with your site qualitative data or customer feedback can help you find why the problem exists in the first place. And one of the best ways of collecting feedback from your users and customers is by using online surveys. In this chapter
Why Collect User and Customer Feedback?
Suppose you want to increase the number of people who sign up for your online store newsletter. Google Analytics might say that the conversion rate is as low as 1.5%. You know that there is an issue with the landing page and start testing out multiple elements on your landing page like page copy, button colours, mobile pages and so on. This approach is like shooting in the dark because you are making assumptions on what exactly is stopping your users from converting and testing aspects without knowing what exactly the problem is.
Instead, a better approach would be to ask users who land on the page what exactly they are looking for and what is stopping them from signing up for your newsletter. Once you get a bunch of open-ended answers you can analyze and optimize the page as per user interest and improve it accordingly.
To collect user and customer feedback we can use one of the tools mentioned above in the “3 Tools to collect feedback” section within this article.
The questions and the channels you use to ask your customers and website users are quite different.
- Users – Ask questions related to website experience, ease of task completion and purchase issues
- Customers – Ask questions which focus on retention, improving customer service and business operations
To summarize, in order to be successful with our qualitative research we need to answer the following questions
- Whom to ask what questions? – Users or Customers or Sales and Customer teams
- How to ask those questions? Which channels do you use to reach them?
- When to ask those questions in order to get high response rates? – On Exit, New vs Old
- What questions to ask?
- How can we use answers to those questions to improve our user and customer experience?
Questions to ask your customers
How to ask? – Assuming you have the customer’s email ID you can send in an Email asking for feedback. Setup email automation 5-7 days after customer receives the order asking for feedback. If you are selling the product through a mobile app send in a push notification asking for feedback on the buying experience.
When to ask? – Ask your recent customers since old customers don’t have the shopping experience fresh in their mind. They might not give you the right answers based on their experience.
Question 1 – Who are you?
Ask your customers their Age, Gender, Income, Interests, Hobbies, and Opinions
This data can help you come up with accurate buyer persona. It is a way of testing your assumptions. This can help you optimize your Ad Copy, Landing Page Copy, Product Features and sell products to appeal to your customer persona.
Question 2 – Why did you choose us?
This question reveals why your customers chose you and not the competition. Is it free Shipping? Better prices? Unique products? Website usability? Your customers might surprise the notions of your business USP.
When customers say why they chose your business you can use the same selling proposition on your landing page and Ad copy. You can continue to stand up for what your customers trust you for and build a long-standing relationship. It is about doing more of what is working.
Question 3 – How could we be better?
This is an open-ended question where customers can give you a piece of their mind.
This question could reveal an obvious service or a product feature you and your team overlooked. It could be lack of shipping or payment options or lack of variety in products. This question is a great way to get into your customer shoes and use that information to improve various aspects of your ecommerce business.
Question 4 – How likely are you to recommend us?
This question allows your customers to rate you on the scale of 1 to 10.
The beauty of this question is that it can give you a single number for all your customer experience efforts.
Questions To Ask Your Website Users
How to ask – Survey Pop-Ups on the right bottom of the screen are a great way to ask users for feedback non-intrusively. Tools like Qualroo can help you with the same.
When to ask –
- When the user is looking to exit – These feedback forms appear when the user tries to close the browser window. Tools like Survicate can detect exit intent and can show a pop-up form. You can use these forms to understand why the user intends to leave your site without making a purchase.
- When the user is browsing – Not all website visitors are looking to buy. Few are looking to check your offerings or merely consume content. You can collect feedback who are browsing through your product catalogue or search pages.
Question 1 – What is the purpose of your visit?
Here we get intent of the user upfront. Based on the answers given by the user you can further ask the user questions about whether he or she was able to complete the task. The answers will fall into one of the following categories. Allow users to answer in multiple choice answers to collect data.
- Casually Browsing
- Comparing prices
- Consume product Information
- Here to buy
Question 2 – Were you able to finish the task?
Whether the user is here to browse through your catalog or buy your products he should be able to finish these tasks effortlessly. Asking this question sets us up for the most important question in the sequence.
Question 3 – If you were not able to finish the task what is stopping you from finishing it?
Here we find out what is stopping the user from finishing a purchase. It could be shipping costs, insufficient product information, competitor pricing or bad website experience. These answers will uncover the real problem which are keeping your conversion rates low.
Question 4 – If you were able to finish the task what is that we could do better?
Here we ask users open-ended questions to improve our website experience. This helps you get into the user’s shoes and get insights into features and user experience which can add value to your web visitors.
Ecommerce Measurement Basics: Goals, KPIs, and Segments
Now that you have the right tools and collecting the right data it is time to jump into the meat of Ecommerce Analytics. Objectives, KPIs, and Actionable insights. Like many digital analysts, my the approach to digital analytics has been deeply inspired by Avinash Kaushik’s Digital Marketing Measurement Model. I will use this model but won’t go into technicality to keep it focused on ecommerce business.
Remember that the objectives you choose for your business also depends on the stage your business is in. If you already doing good in sales and looking to put your brand out there you might have Brand awareness as a core objective for your business coming few months. If you are just getting started you might not have many numbers rolling in your customer loyalty KPIs.
Three Main Objectives Of Ecommerce Business
For the purpose of this article, I am picking goals which are broad and very apt for most ecommerce business.
- Increase Revenue – A business runs because of cash flow. Money over is game over. The bottom line of the business is what keeps it running and your job as an entrepreneur or a marketer is to keep it ticking.
- Save Money – Cutting costs is one way to improve profits. Improving profits ensures long-term business sustainability and health.
- Improve Customer Loyalty – Your customer loyalty impacts multiple areas of your business. It improves word of mouth promotion, it improves customer repeatability thus reducing customer acquisition costs and increases revenue.
Once you have our business goals it is time to define Key Performance Indicators(KPI) which helps us measure our progress against these objectives. While objectives are like a map for your business KPIs is like a compass which helps us know if you are in the right direction. This brings us to 2 fundamental questions – What to measure and how to measure it.
What to measure?
- You measure KPIs which tie to business outcomes and objectives. This helps us to be focused. In the following chapters I break down how each KPI discussed will help us achieve our broad level objectives.
- We measure our progress at the level of Customer Acquisition, Site Behaviour, and Business Outcomes. This helps us understand which area of our marketing strategy needs more attention.
- We measure KPIs which are DUMB – Doable Understandable, Measurable, Beneficial. This way you will not just create reports and analysis you will create an impact on our organization and more importantly to the business you are working on.
How to measure?
I will use Google Analytics for purpose of this article since it is a free tool and used by most business owner.
Note that you will have to follow all steps of setting up Google analytics account for ecommerce as mentioned before in order to be able to measure most of these metrics.
If you are looking to just try your hand and don’t have enhanced ecommerce on your online store yet pick a Demo Google Merchandise Account to get a practical understanding of KPIs I am about to discuss.
Segmentation – Your Guide To Getting Actionable Insights
KPIs tell a business what is wrong, while segments help you understand where exactly those metrics have gone wrong. A dip in conversion rate by 10% doesn’t tell you anything unless you realize that the dip has been caused due to interruptive pop up on your mobile device. Now you can investigate how you can make the popup less intrusive to the user.
In the example below, you can see that the revenue generated in the month of December is $554,029. But not until I segment this metric based on medium I realize that 90% of my revenue is contributed by the top three sources – Direct, Referral and Organic. This is the simplest example of applying a segment.
Now you know that you have to dig deeper into each of these mediums and find out what is contributing to this anomaly and optimize it further. This way you get to do more of what is working.
We will be using segments for each metrics. Also, remember applying the right segment is important to get actionable insights. I will discuss each KPI and how you can arrive at actionable insights by applying certain segments.
4 KPIs To Measure Revenue
We will pick our first ecommerce business objective which is revenue and list all KPIs which help us gauge our progress.
1. Total Number of Users
This is a straightforward metric which will tell you the number of users who visit your ecommerce store. The number of users visiting your site can determine how much money you can make. A user cannot see your offerings unless you drive him to visit your website. Returning users visit your online store to see latest products and buy while new users check your website to know more about you and buy. Either way, this metric can give you an insight into how much money your business can potentially make.
To measure this in Google Analytics you have to visit Audience > Overview in your Google Analytics Dashboard.
Segments To Apply
- Traffic Source – Apply this segment to find out top traffic sources. Most ecommerce sites have their highest ROI channels as SEO, PPC, and Email. If you have very low traffic for any of these then you might want to investigate the reasons for the same.
- Device Category – Device Category helps you see if all versions of your website are attracting traffic. If your site is bad experience on mobile it might not attract SEO, PPC, and Social media traffic. Applying this segment will expose such problems.
- City – You want to know if your marketing campaigns are bringing people from your target markets. Cities segment also reveal if there are markets you are not promoting but still showing traction. Can be used as a way to find new target market opportunities.
- Age and Gender – The people visiting your site should be of the same demographic as your customer persona in order to convert them to buyers. Apply these segments will let you know if your Ad targetting and marketing promotions are right.
- User Type – There are 2 user types – Returning Users and New Users. When you are looking to expand your business aggressively by putting your brand out there you will want to have a higher share of new users. When you are looking to consolidate you will like to have a good balance of new vs returning users.
- Campaign – Campaigns segment will allow you to compare users acquired through each of your Ad or Promotional campaign. For instance, it lets you know how many users your site attracted for holiday season sale of 2016 as compared to Holiday season 2017.
- Product Name – Product Name Segment shows which product attracts the most number of users. If the number of users landing on a product is high but not many people end up buying it you can investigate if anything is stopping people from finishing the purchase.
- Day Of The Week and Hour of the day – There might be days of the week and Hours of the day when your audience likes to shop. It might be Weekend evenings rather than weekday mornings. Knowing this can help you adjust your PPC bids on those days and hours to get more clicks. It can also help you have more support resources in those days. These also can be good days to launch your marketing campaigns.
2. Average Order Value
Note that Average order value is measured immaterial of the customer type – New or repeat. Higher the average order value higher will be the cash flow into your business.
To measure Average Order Value you must visit Conversions > Ecommerce > Overview
Segments To Apply
- Traffic Sources – Knowing which traffic sources drive highest paying customers can help you focus on those channels. For instance, Pinterest and Instagram are known for driving high paying customers of all other social channels. You can test this and increase your spends on these channels to improve your overall site Average Order Value.
- Product Category – Not all product categories are equal. Few product categories will have higher average sale value as compared to others. Once you know these sub-categories you can either run Ad campaigns targetting them or upsell and cross-sell to improve overall average order value of your online store.
- Product Name – Applying this segment will allow you to see which products people are ready to buy in spite of the high price.
- Brand Name – Few brands in your online store might have higher pricing but get bought by people because of its demand. Applying this segment lets you find such brands. You can deepen your inventory for this brand or run exclusive promotions to grow your average order value.
3. Number Of Email Subscribers
Email has been the highest ROI channel for Ecommerce business for more than a decade. Your Email Subscriber list is a direct validation of the number of people who are willing to hear about your products and offers. Once you have an email subscriber you can reach out to them anytime with your offers and promotions.
To measure subscribers you should have a goal set up in your Google Analytics. Once you have set up a goal you will start seeing numbers in your goal conversions report. You should pick the goal name for your subscriber count in the Conversions > Goals > Overview report to see the trend of your subscriber growth.
Segments To Apply
- Device Category – Your Email Subscription form might not be working on all devices. It might not have the same usability and functionality aspects as a desktop. This can drastically reduce conversions on few devices. If your site gets more visits on mobile yet see a low number of subscribers on mobile then there is a seeming problem on your mobile landing page.
- Browser – All browsers are not the same. Your subscription forms might work great on certain browsers but poorly on other browsers. The testing browser experience is one thing but optimizing the form to improve the conversions needs an early step of measuring conversions on each mainstream browser.
- Exit Page Path – This Segment tells you if people are exiting your site after subscribing to your email. If people are doing it then you might want to optimize your confirmation or thank you page by pointing them to useful resources or products on your site to keep them engaged.
4. Life Time Value
For instance one of your customers bought a T-Shirt yesterday for $5 and buys a shoe for $10, 3 months down the line and a wallet for $3, 6 months down the line then the lifetime value of the customer over a period of one year would be $5 + $10 + $3 which is $18. You can find this number out using Audience > LifeTime Value Report in Google Analytics.
Currently, Google Analytics gives LifeTime Reports for a period of 90 days. If you want to find lifetime value of users acquired during Q2 2017 then pick the exact date range to see how lifetime increases per month.
Segments To Apply
Acquisition Source – Applying this segment will tell you which source of traffic is bringing in more users who are willing to pay for your products over long periods of time. You can even segment this by source, Medium, Channel or Campaign. You might run deep discounts during your holiday season sale but only a few of those customers might turn up after the sale. Such aspects of your business performance can be measured by the LTV segments report in Google Analytics.
5 KPIs Which Cut Costs
While increasing revenue brings in the cash flow saving money ensures you are not leaking money. Saving money is about measuring ever penny and how best you can optimize your website visitors into long-term buyers. Here are few KPIs which show how well you have optimized your campaigns and website.
1. Return On Ad Spend ROAS
Return on Ad Spend is calculated by dividing Total Ecommerce Value of Sales by Total Ad Spend. ROAS lets you analyze which of your marketing channels and Ad campaigns give you the highest ROI for the spend.
In order to measure ROAS in your Google Analytics Account –
- Link Adwords Account to Google Analytics.
- Use Cost Data Import Feature in Google Analytics to import data from FaceBook, Bing and other marketing campaigns. This tutorial will help you with the same.
Once you have imported cost data from all paid channels you will see the ROAS for each channel and campaign in your Acquisition > Campaigns > Cost Analysis Report in Google Analytics.
Segments To Apply
- Campaigns – Applying campaigns segment will help you understand which campaigns are high on ROI. Once you find that out you can increase your efforts and budget on these campaigns. If any of your important campaigns are doing poorly on ROI you can investigate the reasons.
- Ad Distribution Network – Applying this segment tells you which Ad network is delivering the best and worst ROI. This helps you focus on high performing Ad networks, fire bad Ad networks and improve on the low performing ones.
- Keyword – Keyword segment shows you the best performing keywords in your Adwords campaigns. Increase the bids of these keywords or launch a dedicated exact match keyword campaign or Ad group to increase your ROAS of your Adwords account.
2. Ecommerce Conversion Rate
Conversion rates help you understand how easy it is for your users to place an order. Low conversion rates indicate bad value proposition or high friction in the shopping experience. High conversion rates imply optimized website which can give high returns for all marketing campaigns.
Note that we want to measure ecommerce conversion rate here because the true progress of how much money we are saving is measured by how many site visitors we are converting into paying customers.
Segments To Apply
- Device Category – Apply device category to understand your conversion rates across multiple devices. If your mobile experience is poor it shows up here. Your checkout experience might not be as smooth on mobile as that of the desktop. This segmentation will explain where on your mobile and desktop checkout experience are people dropping off.
- Browser – Sometimes even modern browsers might behave weirdly. Your checkout might not be as optimized on Safari as on chrome. Applying this segment finds which browsers you have a scope to improve conversion rates for.
- Screen Resolution – Your website might not have good experience with few screen resolutions. You might have a lot of high paying customers visiting your online store via iPhone 8 but your mobile experience might be very bad on iPhone 8. Splitting conversion rates by screen resolution helps you find such dark patches which need improvement.
3. Free Users
Free traffic is often high in ROI and can drastically reduce your overall customer acquisition costs. Free Users show up on your site via various channels like Direct Traffic, Organic Traffic, Referral Traffic and Non-Paid Social Media Traffic. To find the number of free users on your ecommerce store you need to check your Acquisition > All Traffic > Channels report and pick all non-paid channels.
Segments To Apply
- User Type – You must have a healthy balance of new users which are free. If you are over-reliant on paid channels for New users then your acquisition channels are poor and need to add more organic channels like SEO and Email into your marketing mix.
- Social Network – Different brands have different levels of affinity on different social channels. Your brand might find traction on few social networks naturally. Finding such social networks and doing what is working is one way you can improve free traffic to your site.
4. Engaged Users
More engaged your website users, higher the chance of them converting to buyers few days or months down the line. Engaged users are real users and will have a higher brand recall.
To measure engaged users you need to create a goal in Google analytics account. You can set a goal in which a user has to view at least 5 pages to be considered an engaged user. Once you set this up Google analytics starts recording conversions. The same is reported as Engaged Users in All Goals dropdown in Conversions > Goal > Overview.
5. Cart Abandonment Rate
A high cart abandonment rate implies there are points of friction which are stopping your customers from buying. By decreasing number of abandoned carts, you can get higher Returns on spends for your advertising campaigns and reduce customer acquisition costs.
You can find your online store’s abandonment rate under Conversions > Ecommerce > Shopping Behavior.
Segments To Apply
- Screen Resolution – You must segment your checkout flow based on screen resolution to see if all your screen resolutions which get good traffic have lesser than average cart abandonment rate. If not you must work with your implementation to improve the experience for that particular resolution.
- Exit Page – If your exit page is the thank you or the confirmation page then you can keep them engaged with your blog articles and other relevant products in your store.
- Browser – The browser segment will tell you which stage of the purchase and in which browser are people dropping off. This can lead to major conversion uplifts if you fix cart checkout experience in any of the major browsers.
Two KPIs which measure customer loyalty
Google Analytics has helped us with all the above KPIs but its utility ends here. To measure customer loyalty you need ecommerce analytics tools which are built to get deeper insights into your customer. I will explain each KPI under customer loyalty, the tool which will help you measure it with links to valuable resources.
1. Repeat Purchase Rate
Higher the number of repeat customers more stable will be your business cash flow. Higher the repeat buyers lower the need to shell out thousands of dollars in online Advertising. Historically it has always been cheaper to retain customers than to acquire new ones. By measuring repeat purchase rate you can tell if your business is trusted by your customers.
Repeat Purchase is calculated by dividing the number of customers who have purchased from you more than once divided by the total number of customers.
How to measure Repeat Purchase Rate?
You will need to integrate with an E-commerce CRM solution in order to find repeat purchase ratio of your online store. CRM solutions map your customer email to customer behavior. This helps you understand how each customer browses and buys from your online store. The other way around is to install apps on your ecommerce platform which is built for customer insights.
BigCommerce – Ecommerce Insights For Bigcommerce
2. Net promoter score
Net promoter score is a KPI which tells you how likely is your customer recommend your ecommerce store to their friends and family. To measure this KPI first you have to ask your existing customer base “On a scale of 0-10, how likely is it that you would recommend [company name] to your friends or family?”. The survey can be taken by setting up an automated email 5 to 7 days after the customer receives their order.
Once you get the answer from your audience you have to apply a simple math wherein you subtract the % of people who are highly likely to recommend your online store with the % of people who are unlikely.
This score can be used as a benchmark to consistently improve on. Whatever you do in customer service is essential to improve this metric.
The following image by CustomerGauge shows you how you can segment your customers based on the likely hood of recommendations.
Getting Ecommerce Analytics Done
By now you have enough knowledge to give your ecommerce marketing analytics a strong head start. More importantly, you have a framework for your measurement program something which many digital marketing campaigns lack.
- Start with Google Analytics to get a feel for things. Yes, use enhanced ecommerce and ecommerce tracking to get the real essence of Google Analytics. Focus on doing this right before thinking about any other activity in your analytics program.
- Once you have installed Google Analytics Enhanced Ecommerce play around with the tool often enough till you get a good hangover the metrics, the user interface, the possibilities, and Goals. You can start with trying to measure KPIs mentioned in this post.
- Be clear about your business objectives and goals and communicate the same with everyone in your team.
- Play around with various table formats and reporting structure in Google Analytics to dig deep and understand why exactly a certain metric is high or low. Segment data to find out the scope for improvement.
- Set targets for each KPI and come up with strategies to improve them.
- Use Google Analytics Custom Reports and Dashboards to automate reporting and share it with your team.
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