If you are looking to grow your company’s revenue faster with minimal spend and effort, you can use these tools to better monitor and analyze your business performance.
Analytics | Sep 12
Matt Black on May 19, 2016 • 3 minute read
Your website is slick.
It’s got all the bells and whistles and you’ve got a ton of traffic.
Social media is lit up with buzz about your business, products and services.
But what does it all mean if you’re not making sales, have no clue what most of your customers are spending when they do buy, and your potential profits are vanishing into thin air thanks to the costs of doing business?
By staying on top of these key eCommerce metrics, you can be sure that you’re maximizing your revenue and providing a great online experience for both existing and potential customers.
What good are visitors to your website or online store if nobody is buying?
Your conversion rate refers to the percentage of people who take a desired action. In most business contexts, this would refer to how many people you convince to buy your products and services online.
Not only do you need to be monitoring your conversion rate, but you need to learn how to keep elevating this metric.
Spend whatever time you need to determine the best strategies to increase your conversion rate, as this will obviously have a direct impact on your revenue. Sometimes it can be a quick fix like determining what type of content your audience prefers (i.e. videos of products over still images), and other times it may require more strategic reevaluation of the customer experience.
And if your conversion rate plummets out-of-the-blue, dig into why. Is it because you suddenly had a burst of unqualified traffic? Is it because something on your website isn’t functioning properly? The key is to take action to figure out what happened.
The sky’s the limit – and the higher the better – when it comes to your conversion rate!
At risk of sounding too obvious, keeping tabs on the average spend of each customer visiting your website/store allows you to forecast revenues but also understand where your deficiencies may lie.
For instance, if the bulk of your AOV is tied to a specific segment of products or a service your business offers, you might be able to gain some insights as to why that’s the case. Conversely, you’ll also have a chance to figure out why other areas of your business aren’t contributing more effectively to that AOV figure.
AOV can serve as yet another tool that takes the pulse of your business and the full range of your products/services.
Plus, one of the great things about increasing AOV is that you’ll be able to increase your revenue by leveraging your existing customer base, giving you a little more wiggle room to figure out how to optimize your customer acquisition strategy and bring in new customers.
Speaking of which… how much do you spend to acquire each customer?
This is an absolutely critical metric that will help shape a lot of the other areas of your business.
It’s critical that you stay on top of the cost of acquiring customers; sure, it’s great to have a ton of traffic on your website and hopefully your conversion rate is high. But what’s the point if you’re spending more to acquire a customer than the customer buys from you?
There are a ton of costs associated with doing business, so it’s important that you monitor these in all areas – from marketing to infrastructure to human capital… these are all factors that need to be accounted for.
Obviously, the lower your CAC is, the better.
You might want to look at streamlining some of your processes or consolidating the work that’s being done to keep your website/store up and running.
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