By Ashley Galina Dudarenok China was one of the first countries to contain the COVID-19 epidemic with relative success, and the economy is better for it. The National Statistics Bureau reported 4.9% growth in China’s Q3 GDP year-on-year, showing improvement against both its 3.2% growth in Q2, and [...]
By Reggie Addae
How to get the most out of your customer data
The one thing all successful ecommerce stores have in common is that data guides almost every business decision. After all, if you can’t measure something, then there’s no way to know how to improve it.
For a new ecommerce store, it’s essential to track all activity. But with so many metrics at our disposal, it’s easy to succumb to ‘analysis paralysis.’ We end up looking at so much data that there’s no way to walk away with actionable insights. We outline how ecommerce startups can get started with seven vital metrics.
1. Cost per acquisition (CPA)
CPA = Campaign cost ÷ No. of acquisitions
CPA is the cost it takes to acquire a form of engagement–be it a customer, lead, click, or like. This number helps to pinpoint which campaigns need optimizing, and which to do away with completely. For example, you’ll know to stop using Google ads if the CPA is higher than the CPA for Facebook ads.
2. Return on advertising spend (ROAS)
ROAS = Revenue ÷ Campaign cost
Your ROAS will tell you which ad campaigns are working, and allow you to determine the return on every marketing dollar spent. You can then identify which of your ongoing campaigns have the highest return. It’s particularly useful if you have extra budget, or want to reallocate your budget more efficiently.
3. Bounce rate
Bounce rate = No. of visitors who leave immediately ÷ No. of visitors overall
The bounce rate is the percentage of visitors to a page who leave before taking any action. This metric is a good option for new stores that may not have enough data to calculate CPA and ROAS. It’s a good indicator of the accuracy of marketing targeting.
4. Checkout abandonment rate
Checkout abandonment rate = Percentage of online shoppers who add items to their shopping cart and do not purchase ÷ Percentage of online shoppers who add items to their shopping cart
This metric can tell you what percentage of people come to your page ready to buy your product–and then don’t. It is a measure of friction in the checkout process. If this rate is high, you need to consider where the leaks might be in the process, and how to reduce them.
5. Conversion rate
Conversion rate = No. of transactions ÷ No. of page visits
Your conversion rate is the percentage of visitors to your site who make a purchase. Using this metric, you can predict sales and identify traffic sources that are over-delivering and scale them up.
6. Opt-in conversion rate
Opt-in conversion rate = No. of opt-in conversions ÷ No. of page visits
Most visitors to your site will not convert the first time they visit. However, you can continue to market to them–hopefully bringing them back to complete the purchase–by securing their email address, which constitutes an opt-in conversion.
Nurturing these opt-in conversions should be a secondary goal of your marketing plan. After a few months, you should be able to put a monetary value to each mailing list subscriber by dividing your total revenue by your average number of subscribers.
7. Product revenue
This metric is a way of keeping track of the amount of revenue generated by each product in your store. It allows you to identify what your hot products are, which you can then prominently feature in your store and social channels.
Reggie is Jumpstart’s Director of Marketing and Special Programs.