Introduction

Do you desire your ROI to be better and therefore to attain some more insights of your customers for the right marketing communications? Learn about eCommerce Analytics with this simple beginner guide

Nowadays we have hundreds of tactics to grow a business, but nothing comes close to ecommerce analytics.

Despite deployment of digital marketing practices and the inherent measurement built into ecommerce, 80% of those same marketers are unable to consistently make data-driven decisions based on a Deloitte study.

This guide will help you to master the “language of analytics” as well as get started with tracking those right-for-e-commerce KPIs! This will allow you to see what your customers are doing so that better decisions can be made with the result being increased sales.

What is ecommerce analytics?

Ecommerce analytics are the data gathered from an ecommerce online store that helps you make critical business decisions. In other words, it reports metrics such as sales numbers, customer behaviour and website scores that help to improve marketing tactics, user experience or efficiency.

By the End of this Blog, you will learn about

Analytics help them to measure and demonstrate the ROI (thus success or failure) of their campaigns, as well as assist in driving strategic decisions for increasing sales, decreasing costs and enhancements throughout a business.

Having Ecommerce analytics centralized and well managed According to Siva K. Balasubramanian, associate dean and professor of marketing at Illinois Tech’s Stuart School of Business, the proliferation of more data sources that collect information about customers (CRM), products (PLM) and markets in general is a universal challenge for contemporary businesses.

“Analytics, however, provides ways to tackle this issue by structuring data for creating the most relevant metrics that could aid in monitoring business performance on an ongoing basis,” says Balasubramanian. Analytics are focused on the core to help keep them fresh and performance metrics that ensure problems surface in real-time for troubleshooting (they key in improving business processes)

Data points tell you the number of unique users your site saw in a week. Meaning, perhaps only 50% liked your website enough to stay for even the shortest amount of time. And God knows how many of those who stayed and found what they wanted DID NOT convert, while another 10% never made it through the checkout process B/C your site was sucking shitty that pissed them off to high heaven so they just ditched & dashed.

Understand marketing data

The sign of what makes a good marketing analytics software is that it keeps everything in one place. Track all your campaigns (from social ads to emails, marketing automation and beyond). This includes also live stats so now more guessing what works and where to spend your marketing for the best possible ROI.

Analytics is the answer, according to Castos CEO Craig Hewitt who claims “the biggest problem” a user can have with marketing data hurting ecommerce analytics growth is they simply don’t know how. “Marketers often have a lot of data about their customers, but they struggle to use it effectively,” says Dobitek. “Without the data and insights available from ecommerce analytics, their ability to build a working marketing plan is in danger.

Analytic’s allow you to assess/marketing performance and Make Better Decisions thus enhancing operating as a strategic business.

Uncover trends

Ecommerce data analytics in ecommerce platforms of today view your data as a connected system, taking steps towards digging out trends and patterns in the business. For your understanding of the well-being of your business both now and in future.

The best part of marketing analytics is that brands can gather customer data, store it and use it. Customers do some operations in your store and all of them will be captured by the marketing analytics in ecommerce. In other words, you need good marketing e-commerce analytics and reporting to narrow down who is on your site.

Grow, engagement and revenue reports let you see how customers are behaving. Who’s interacting with your content, Did they click on a link you shared? Purchase something that you offer. Download the app or white paper because of your support engagement (assuming this was an agreed KPI).

Craig elaborates, “Using marketing analytics you can get to the right person with the right message at just about exactly when they will be most ready for what is being said. Then, through data points and marketing data analytics tools teams can gain a better understanding of the right kind of prospects for them to align their messaging. That way, brands can satisfy the demands of their audience much quicker and in a more informative manner than the competition by delivering even better content that will get higher engagement.

If, for instance, you notice that a campaign on Instagram where your shoes are pictured in an urban street environment sells more than one showing people with them at the office. This will allow you to properly position your products, and for the future streetwear buyers out there – give them what they seek! For example, a merchant could collaborate with better-targeted influencers or tweak their ad targeting to improve product awareness.

Optimize pricing

Pricing of products is just leverage you can have to enhance profitability across different business functions.

You should have an ideal price that people are willing to pay for every product. Using marketing analytics will give you valuable insights into how different customer groups will be influenced by price. This is how you come to know the best price points for each product which indeed helps in maximizing revenue.

Types of e-commerce analytics

This is going to be just one of the dozens of ecommerce analytics indicators that we are gonna see in this guide, so grab a cup of coffee since if you´re starting from scratch as an owner here´s your place!

Here are five metrics you can track for your store to stay on the right side of issues like those experienced in the above example, and scale when it is most opportune:

• CLV (customer lifetime value) The net profit your average customer will make you tap to enter content. So, for example, if your average customer buys from you three times (repeat transactions), and spends an average of $100 per purchase — with a 10% profit margin ($10) — that customer’s CLV is $30.

• Returning visitors. Returning visitor: This is the (minor) percentage of users who come back to your site after their first experience. And that figure is a sure sign audiences ate up everything they saw.

• Time on site. Average Visit Length (How long it takes users to annual your site) When people spend time on your site, it means they are browsing around and therefore have a good customer experience.

• Pages per visit. Average number of pages users view in a visit to your site. If you are within the range of about four pages per visit, then people find your offering interesting.

• Bounce rate. It is a % count of users who landed on one page and exited from the same pages without interacting. A significantly high bounce rate (over 57%) indicates the first negative impression your website makes on users. And for lousy design, unfulfilled expectations or a slow page-loading time a user may bounce.

Apart from CLV — which you have to calculate on your own, all the above metrics are easily available with Google Analytics. They come up as soon you log into your account on the very first page.

Read More Google Analytics For E-commerce (In-Depth Guide)

For the rest, run it through your head as if you were a customer and come up with ideas to make ways of making improvements for improving your site — then test until it goes back on that climb.

Customer acquisition efficiency metrics

When you are operating an online business, being more cost-efficient in terms of your marketing costs is one area where there’s always room for growth. During the customer acquisition efficiency phase, you aim to make sure that everyone who lands on your site can navigate through it easily and quickly find what they are looking for.

Here are the key metrics to keep a watch on while you improve your efficiency in customer acquisition.

• Conversion rate. This is your conversion rate — the percentage of people who visited your website and took an action: signing up or making a purchase. Your conversion rate is an essential number to understand because the lower your conversion rate, the more expensive and time-consuming it will be for you to close a sale. Storewide conversion rate averages 1% to 4%, very struggle.

• Page load time. If your pages are slow to load, this will discourage conversions and reduce customer acquisition efficiency. Now the stage is more crowded and users are less patient – even two seconds elicits annoyance when waiting for a page to load.

• The price of a new customer ($) CAC is essentially looking at how much money we are spending to get a customer. E-commerce analytics profitability depends on a variety of factors, but one crucial metric is the cost to acquire each new customer (CAC) because that tends to be the largest expenditure in any ecommerce business. If your CAC exceeds what you can expect from an average lifetime value (LTV) for customers acquired through it -then everything else being equal — such an ecommerce site or store will not make money and profits are likely non-existing at this stage.

Analytics for scaling growth

Scaling in ecommerce means growing sales. As long as it pays the bills, there is nothing wrong with a slow-growing company. However, though — who did not try to sell as many of a popular product?

• Unique visitors. Sales and revenue sides of those metrics should trend up as well (and likely more so than the unique visitor metric) so your unique visitor count will naturally increase. However, remember to never put too much emphasis on how effective this is until the first three numbers are positive as well. So, scale up unique visitors and still be profitable by managing the CLV/CAC ratio.

Next, I want to walk you through various acquisition channels (i.e., places where you can reach out) and the key metrics pertaining thereto.

Customer acquisition metrics

You are now set to deploy your acquisition metrics and gear up for a strategy that takes practical steps towards maximizing an ecommerce store in its growth-full future.

So invest a small portion of your resources to bring in minimal traffic through low-budget ads and get some data.

From there, analyze the data to better understand how you can reduce your product’s core metrics.

With that done, you can now proceed to the scaling phase where more of your resources will go towards those channels.

Now, let us proceed to examine how companies that are poised on the brink of scaling can leverage analytics in controlling each marketing channel and deploying more funds towards their growth.

While there are scores of acquisition channels, we will concentrate on the best current ones for ecommerce (SEO, SEM and Facebook ads) as well as email marketing.

1. SEO (Search Engine Optimisation)

To grow fast, you need to reach out to more people quickly and search engines are good free channels for user acquisition if you have a product which has regular searches like (flights or shoes) WHAT TO LOOK FOR IN ORGANIC TRAFFIC (SEARCH ENGINE)When you are on a mission of optimising your site to have more organic traffic, the metrics that interest you should be:

• Search volume. SEO can be grown only if lots of people find your product through search engines like Google or Bing. So understanding the basic knowledge of keyword research can help you know if your desired keywords have enough potential to drive profitable growth, or not! You will never be able to use them for scale if they can’t.

• Average ranking position. This allows you in your Google Analytics SEO report to view where those keywords are ranking. Position 1 means you own the first organic search result in Google for that keyword, which gets more clicks than any other.

• Bounce rate. Creating a little more seamless user experience results in a lower bounce rate because if others from Google search results come to your site and it is not up to their expectation, will leave and cause a higher bounce. Google also uses bouncing rates as a ranking factor so, a high bounce rate is just not bad or loss of money in ecommerce sales but can negatively affect SEO.

• Conversion rate. If you have solid organic traffic and a pretty constant stream of visitors, you want to extract as many buyers from that group as possible. Improve your complete conversion funnel, from landing page to payment in order to harness ecommerce SEO more efficiently for increasing sales.

• Revenue. The goal is to make sales and earn money when people just find out about you from searching. The ideal KPI to see if your SEO improvements have made a difference, is monitoring revenue from organic traffic. You can actually do this right in Shopify using the awesome analytics tools we have.

2. Search engine marketing (SEM)

Instead, achieve this by advertising on search engines to attract the appropriate audience. Always utilise SEO, BUT work on paid strategies too — because they can help each other. Below we are going to use some metrics that Google Ads, the search engine´s advertising solution relies on:

• Search volume. Like SEO, If you are running a search engine optimization campaign: Running an SEM (search engine marketing) is a really good thing but make sure if the keyword has a high volume or not. Use the Keyword Planner research tool before launching an SEM effort.

• Cost per click (CPC). How To Manage Your SEM Costs Per Click In the Google Ads dashboard you can determine your CPC. The result: the more you pay for a click, the higher your ad is displayed in search results to customers looking up related queries; paying more = leads to a greater amount of traffic coming from targeted ads.

• Average ranking position. A metric in this sense, is already shown on your Google Ads dashboard and highly connected with CPC. The larger the amount you invest in your keywords CPC, the higher your ranking position and also more traffic it generates.

• Click-through rate (CTR). Tons of people will see your ad, but it is only effective if the right person clicks on it. Ensure the ad copy is exciting to your target customer. This will improve your CTR (as also displayed in your Google Ads dashboard) and draw more people to click.

• Bounce rate. Even when they meal people are saying yes to their clicks if bounce rates remain high that is a surefire sign you need to take to improve the consistency of your landing pages and ads. In your Google Ads dashboard, watch the bounce rates for every SEM campaign.

• Conversion rate. SEM conversion rate The performance and profit margins of your business can vary greatly depending on how optimal is Your SEM conversion rate. Make sure you are taking full advantage of your conversion funnel, from the landing page to payment so that SEM can make as many sales for you. You can find it out by going to any campaign in your Google Ads dashboard.

• Customer Acquisition Cost (CAC). For Google Ads, your average conversion rate & average cost per click will determine the CAC. If your conversion rate is 10%, that means you have to get 10 clicks in order to make one sale. Your CAC is the cost per click multiplicatively to a number of clicks (CAC=2×10)$20. If even a $20 cost of acquiring customers is too expensive, with these sales you will make no profit – your pockets would be empty.

3. Facebook and Instagram ads

The beauty of social media is a challenge for advertisers — after all, people use social networks to talk with their friends not buy your products. And while we know that social media is far from the best thing you can do online, it’s where everyone goes to spend their time and right now, Facebook wins out in terms of popularity. So doing a test on some cool ideas using Facebook advertisements with calls-to-action for driving sales will not hurt at all! Some of the typical KPIs Facebook uses are:

• Impressions. You get very few impressions: this simply means that not enough people are seeing your ad. That indicates that your target audience is way too thin. Expand your audience to add more interests or demographic targeting.

• CTR. The percent of people you reach that click on your ad Not only do you have to optimize for an acceptable CPC, but a low CTR means people are not resonating with the ad itself (that includes message and design), or simply that your ads are being shown to those without relevance.

• Cost per click (CPC). The campaign has to earn you $5 per 1000 impressions and depending upon the type of audience that you select to target, a click on Facebook would cost higher. With a high CPC, you get higher CAC.

• Bounce rate. This only applies to Facebook… SEM is not included in bounce rate.

• Conversion rate. Conversion rate is a critical metric and will vary among different ad campaigns. Suppose you have identified a campaign with low conversion in Google Analytics (Acquisition > Campaigns). In that case, it is probably time to refine your landing pages as well as ad on such campaigns, making sure that both are carrying the same message and clearly stating out how valuable your products are.

CAC. CAC works in the same way with Facebook just like SEM

4. Email marketing

Inferior on the list, email marketing performs better for sales at ecommerce. The Real Work Is In Growing Your Email List (and that can take a minute) Here are 6 Key Metrics you should be working to measure and analyze in the process of using email campaigns out there.

• Number of email subscribers. Numbers matter if you want to grow sales using email. The larger your list is, the likelier you are to make a sale. Strive to obtain as many email subscribers from your leads.

• Sales from email. Just having a big list of email addresses isn’t going to cut it – you need to be able to sell them something. This comes in two flavours. So the first thing you need is not a list of people about to make their purchase any second (cause that would be weird), but rather, just a list of known goers who will most likely buy from you. This brings us to another element — the content of your emails. Learn more about these two metrics.

• Conversion rate between visitors and email subscribers You can create list-building opportunities by placing web forms on your site and then encouraging people to sign up. Whatever the percentage of these visitors converted as subscribers will work according to your convincing approach.

• Subscribers that turn into sales After you have a list of people that are interested in what your selling, well the last thing you want to do is send them emails everyday promoting an offer! Focus on your email designs and the products you choose will help create some sales for the list.

• Open rate. You can never sell to people who do not even open your emails… On the other column, a good email list can also enjoy open rates of 20–30%. A/B test your email subjects to ensure they are effective and can convince others to open them.

• Click-through rate. Qualm 3: Getting Those Email Recipients Clicking Your Emails After getting your emails opened, you want them to click on a product like tempting post…columns or site shelves that they can go back and buy from you. Click-through Rate is the percentage of people that click on a link in an email.

• Unsubscribe rate. The more you send out shitty content to your list, the higher are chances they will unsubscribe. If you get >1% of people unsubscribe then take it as a sign your content is not what they suscribed for.

In this next step, we will go over how to put everything together and make Ecommerce data analysis a part of your company’s daily routine.

How to succeed in ecommerce analytics

You must set expectations and decide what the purpose behind your analytics is. It is the safest way of making sure that everybody works towards a common objective as well you are likely to reach your KPIs.

The top-line goals of the company should be related to what your marketing team is there for. Name the No1 profit centre for your business That’s one place to start.

Some areas of marketing objectives include:

Follow the SMART goals framework in setting objectives. Yours might be “Q1: Decrease abandoned carts by 5%”. Goals don’t need to be fanciful, they just have to be transparent.

Then, send your goals to the teams by breaking down what you need them to do:

Establish benchmarks

Benchmark:Something that serves as a standard by which others may be measured or judged. For something like digital marketing or web analytics, this could mean making a note of some metric (abandon cart rate, customer acquisition cost etc., you catch the drift), over time taking the benchmark value and trying to guess things when it comes to decision-making moments. Benchmarks are useful information, and allow you to set meaningful targets or goals (and then I can help you measure your own progress over time).

Let us say you are working on an SEO campaign this November to boost your website traffic. All articles may be tracked with page views, average time on page, bounce rate and exit rates. You use October site metrics as your benchmark and deem November to be the testing period for said changes.

We will establish the right benchmark for each campaign. It could be the CTR or CPC in your ads if you are spending. What matters is that you identify a time and specific metric to carry out an analysis, so whether your campaigns are going well or not.

Optimize your campaigns

According to Siva, “Analytics is about measuring business performance and the factors responsible for it. Optimization comes next in the process as it aims to boost performance by making small adjustments such that marketing variables and their levels are adjusted more accurately or fit for purpose.

“Qualitatively, a business may invest money in similar variables such as soliciting via advertising to new customers or dedicating resources towards enhancing channel relationships among other promotional activities through its marketing campaign. These metrics lead to improved performance by measuring factors that are indicative of sales, profits and market share.

Siva also says that to ensure resources are configured for each variable, “ecommerce businesses regularly rely on simulations and experimentation to unearth the optimal resource allocation decisions over variables driving performance.”

Integrate Data into Your Routine

It is clear how much better companies perform when adopting data in their weekly routines. The most successful Merchants are those who study the data, get actionable marketing insights from their analytics and take action on them.

But here’s the thing — it is easy to make data analytics a habit. Regardless if you are a solopreneur, or have teammates supporting your endeavours – all it takes is weekly check-in.

Great organizations fix their bottlenecks first. Log into your analytics at the start of each week, to ensure you can see clearly where you should be focused and what types of marketing activities will keep that focus WHERE IT SHOULD BE!

So, for instance with an average page load time high in your set compared to others (or last week), and you know more than anything else that matters to conversions influencing how quickly a web page loads is top of the strategies list.

In the example below, you can see that they have a huge conversion rate problem at this store. It should be optimising its landing pages, store experience and sales funnel to improve it conversion numbers, nothing else.

Alternatively, you can track your metrics in a spreadsheet or on a whiteboard. And the important, prioritize. So track your numbers compared to the week before—hydration, food intake, scale weight—which will help identify how much you need for recovery.

After you determine what your top issues are, start brainstorming ways in which this will directly affect the red metrics on your dashboard. So implement these concepts and have the same checkup in one week, to determine if your numbers are higher. Do this every week until all your metrics are green.

That’s it. Nothing can stop you when your fluent in analytics and incorporate ecommerce data into decision-making for the company.

E-commerce analytics challenges too many e-commerce firms

These are some of the challenges that you could face when analyzing ecommerce data analysis

• Data inconsistency. Analysis becomes difficult when data from different sources are combined. Just picture using Facebook Ads, Google Adwords, emails and so on. All of the platforms give their data in different formats and standards, so it requires lot an efforts to make these compatible for further analysis. Bring all of your data into one place, and in the same format so you can have a clearer picture of how to make use of it.

• Data privacy. Data privacy and security a must. Paying attention will prevent legal action and protect your trust with the customer. Ensure your data storage is secure and comply check periodically to safeguard the ongoing protection.

• Data quality. Whenever you are working with poor-quality data (incorrect, incomplete or outdated information), it can be dangerous to your decision-making. Think about buying more similar-shaped tops if sales are inflated due to clearance. But is that what you want?: to be consistently over or understocked, negatively impacts your margin and longer-term profitability.

• Cherry-picking data. Cherry Picking: when one identifies an emergent pattern in the data and subsequently focuses on that specific factor to result, while ignoring other ostensibly pertinent factors. Now, let’s take an example of running an online clothing store and you are examining the data generated from sales to decide what items you wish to focus on. You may even cherry-pick data to only show your winter jacket sales week and not worry about the fact that those were 7 of you who are still below goal for the season.

Solving these problems will enable to you reduce ecommerce KPIs time and improve its efficiency in another way or the other. Not just that, You will be able to tell your stories from the numbers you infer and fix them by yourself.

grow your store with best ecommerce analytics tools

Somewhere around here, it is when most businesses end up failing — not because they did not work hard enough for long or time the effort needed but because simply going about things misses the point. The challenge is to identify, at each development stage, which data points are significant so that you focus your efforts on making the changes that will make a real difference concerning revenue.

Leverage Shopify’s dashboards and robust reporting to make better business decisions, faster. Select from 60+ dashboards & reports or make your own to identify trends, exploit opportunities and turbocharge decision-making.

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