Ecommerce Analytics to NOT Ignore, and What They Mean in Your Business
You likely know, as most business owners do, that your analytics are important to track and measure — just like tracking your finances. But analytics, as well as financials, can feel daunting.
Oftentimes, we put off looking at the numbers in our business because we’re scared of what we might find. The possibility of having to confront failure can leave you feeling drained before you even start, so instead, you just put it off altogether. While ignoring your analytics allows you to avoid these types of ugly feelings, all you’re really doing is giving yourself a false sense of security.
On the other side of things, sometimes we can try to read into the data too much which also creates ugly feelings of inadequacy. It’s really important to look at analytics objectively to see areas that are working well and areas where things can be improved.
Today we’re demystifying analytics so you can read your numbers without fear or ambiguity, understand what they’re saying, and take appropriate action to benefit your business.
What are ecommerce analytics, or data?
Ecommerce analytics are a set of data that help you measure growth and understand how customers engage with your store. This data also helps you pick up on patterns that emerge over time.
Analytics often feel scary because they shine a light on what’s going wrong in your business and where things are falling through the cracks, but this is actually helpful! Remember they will also shine light on what is working, so you have a better understanding of how you should spend your time. Knowing exactly where you’re going wrong means you can find solutions and take the appropriate actions to move you forward in business.
Why you need to be reviewing your analytics regularly
The truth is, just taking a look at your analytics every once in a while isn’t going to do you much good. The key is consistency. You need to be regularly reviewing and analyzing your data to really reap the benefits of it. And don’t just take them at surface-level — you need to deep-dive into your findings to discover what they truly mean for your business.
Set a recurring date in your calendar to sit down and look at all of your important metrics. Maybe it’s once per quarter, once a month, or even on a weekly basis. By reviewing your analytics at consistent intervals, you’ll be able to recognize and take note of any patterns that appear, like if there are certain months where revenue tends to decrease (and why that may be happening). Or, maybe you notice that your conversions have been dropping steadily, signaling that you might need to revamp your website soon.
Reviewing your analytics regularly allows you to discover how your customers are engaging with your business at every level of their customer journey. For example:
Discovery: Are they finding the products they’re looking for easily?
Acquisition: How are they getting to your store, and why?
Conversion: Why and how do they buy from you?
Retention: What keeps them coming back to your store?
Advocacy: Are they telling other people about your products?
Reviewing your analytics can feel daunting, but try to think of them as simply telling a story — the story of how your customers are engaging with your store. When you’re able to understand how they engage, buy, and tell others about your products, you can take action to better improve that customer experience.
Analytics to monitor
So you know how beneficial analytics can be, but with so many possibilities to monitor, which ones should you actually be tracking? The answer will be largely dependent on your goals in business, but here are some to start with:
Financial analytics:Looking at your finances can be scary, but if you don’t keep track of them, you won’t have a true gauge of the health of your business. How many orders do you receive each month, and what is the average value of those orders? What is your monthly/quarterly/yearly revenue?
Website traffic: Set upGoogle Analytics to track organic, direct, referral, and social traffic to your website. If you’re using ads, you might also choose to track paid traffic.
Conversions:Your conversion rate is the number of people who visit your website that actually make a purchase. If your conversions are low, that may mean that something on your site is in need of tweaking, whether it be design, copy, or your product images.
Customer lifetime value: Customer lifetime value (CLV) measures the income your business typically brings in from a single customer. The basic idea is that it’s more profitable to keep existing customers than it is to find new ones.
Acquisition: How are customers coming to your site? Maybe they’re finding you through social media orSEO. Or, they might be coming from a recommendation made on somebody else’s website or email list.
Customer acquisition cost: For each new customer you bring in, how much is it costing you? Consider paid ads and marketing campaigns when evaluating this metric to help you determine the true cost per customer.
Site speed: If your website takes forever to load, potential customers aren’t going to stick around, and you’ll lose sales in the long run. As a general rule, it’s best if your ecommerce website loads in 2 seconds or less.
Marketing analytics: If you have an email list (which you definitely should!), keeping track of your click-through rates, open rates, and number of subscribers is a must. You’ll also want to track your engagement and growth on whichever social media platforms you use.
Customer surveys: Surveys are a great opportunity to gather data to refine and improve your business processes. How satisfied are your customers with the quality of your product? How satisfied are they with your customer service?
This list is meant to be a jumping point, so don’t feel pressured to monitor ALL of these analytics. Every ecommerce business is unique and will have its own set ofkey performance indicators. So only keep track of the things you feel are important and relevant to your business.
What you can do with your analytics
You can sit and look at analytics all day long, but if you don’t pair it with real action, they’re not going to make a difference on their own. So, how can you actually useecommerce analytics to improve your business?
Adjust your pricing structures: Are profits lower than you’d like? Take a look at your pricing structure and see if there are areas where you can increase your revenue. Maybe it’s as simple as increasing your prices, or it might be something more complex, like introducing product bundles to encourage customers to buy more from you.
Adjust management of your inventory: Adjust your inventory management so that you’re able to keep more of your popular items in stock while purging items that are underperforming. This is an easy way to increase your revenue.
Improve your website: If you want to improve your conversions, you first need to understand where your website isn’t working for you and where it can be better. Once you understand that, brainstorm solutions to improve it.
Switch up your marketing strategy: Maybe your marketing efforts just aren’t cutting it, in which case you’ll need to switch up your strategy. It can also just be fun and interesting to test out new strategies every now and then, whether it be on social media or with youremail list.
Improve your customer service: Keeping your customers satisfied and happy is crucial to growing your business, so you should always be looking for ways to improve your service skills. This will ultimately help you retain customers over time, which saves you money in the long run in comparison to constantly searching for new ones.
Ditch what’s not working: Rather than wasting your time on campaigns and projects that just aren’t working, lean into the things that are going well for you already. This is ultimately a better and more productive use of your time.
Trying to gather, interpret, and take action on all your data at once is a surefire way to overwhelm yourself. Luckily, you can make the process less daunting by taking it one piece at a time.
First look at the metrics that you care about the most and work your way down from there. And remember that you don’t necessarily need to track everything — it’s okay to only track what actually matters to you. As you analyze the data, make a list of action items that you can take to improve any performance gaps you find.
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