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One of the biggest advantages of doing things on the web vs real life is that on the web, many things are trackable. This gives you the advantage that you can take certain decisions based off data, and not just assumptions. Business owners that have a physical shop… do you know how many people came through your doors last year? How does that compare to this year? I bet you cannot tell right? Online it’s a totally different story, and website visitors can be tracked to a great accuracy (around 95%). This gives you the possibility to do some data crunching and make changes to your web operation to make improvements where it matters.
These are some of the most basic data points that you should be looking at:
- Time on site
- Traffic Source
- Device usage
- Conversion rate
- Average order value
- Purchase frequency
- Abandoned Carts
Let’s dive in a bit more detail about each of these.
Traffic – is the absolute most basic metric that you need to keep an eye on. You need to be aware how much traffic is coming on to the website daily, weekly or monthly (depending how busy your online shop is, or how much you depend on it). Less traffic (in most cases) will inevitably mean less sales, so if you notice any traffic dips, you will need to remediate the situation asap, and push some marketing out to take the traffic levels back up.
Time on site – is a second, very important metric that you need to keep an eye on, along side the traffic numbers. The reality is, that I would personally prefer to get 100 visits to my website, but each person is spending 5 minutes on the site, rather than getting 1000 visits, but they are spending only 20-30 seconds. A longer time on site, means that the visitor is more engaged with the content, and therefore, in the case of an online shop, is also more likely to purchase.
Traffic source – is simply the measurement of where did the user access your website from. This is great information to keep track of to determine your most effective marketing campaigns. There are 5 main traffic categories.
- Direct – visitors that accessed your website by typing in your website address directly, in our case storm-design.net. This however also includes visitors that the website tracking software was not able to determine where the source originated from. An increase in direct traffic could mean that your offline marketing (not on the web) could be pushing people to your website.
- Referral – Visitors that visit your site by clicking on a URL on another website.
- Organic – Visitors that find your website by searching a keyword or key phrase in a search engine (Google, Bing etc.) and click on your listing.
- Paid – Paid means usually via Google Ads
- Social – traffic originating from social media, clicking link from your social pages, content marketing or paid ads.
Device usage tracking – allows you to monitor which devices are primarily used to view your website. The trend indicates that a large percentage of web traffic in 2020 is leaning towards mobile devices. But this is not always the same for all industries and/or all age cohorts. Have a look at what are the most common ways that your users are using to access your website, and then make sure that your site works perfectly with those devices. Say that 70% of your website traffic is on mobile, but then your website is not mobile responsive, then your are basically wasting 70% of your marketing effort.
Conversion rate – is slightly more mathematical, but it’s a very simple calculation. The conversion rate, is simply the percentage rate of how many of your website visitors are making a purchase. Here is a sample calculation.
If on your website, you get 1000 visitors a month, and your conversion rate is a solid 10% – then, if means that you will get 100 sales (10% of 1000).
To get your conversion rate, the calculation is very simple. And you can use a tool such as this https://percentagecalculator.net/ to make these simple percentage calculations.
Example – if you had 176 orders on your website this month, and you had 3569 website visitors. Then your online shop’s conversion rate is %4.93
This conversion rate needs to be monitored month over month to see if your website / online shop is experiencing increases or decreases. If the metric remains stable, you can also make some basic predictions, that every x amount of people visiting the website, will generate y amount of sales. That’s never guaranteed of course, but with good quality, target marketing, your online shop can achieve a stable conversion rate.
Average order value – is a significant metric that not simply averages out the number of sales on the site, but also the average order value. A similar example to the below, I would prefer to have 10 orders, with an average order value of €200, rather than 100 orders of €15 each. Each sale is important of course, but getting a higher number of sales, with a low order value typically means that you need more time to fulfil each order. This metric allows you to monitor your online shop average and determine the marketing campaigns or channels that are bringing higher valued orders.
Purchase frequency – Frequent orders by the same customers can make a tremendous difference. Customers that make a one-time purchase are valuable of course, but if you manage to get a customer or group of customers that makes a purchase monthly or every few months, it’s even more valuable. Frequent purchases are not something that every business can actually get – so the type of product or service that you sell will make a difference. In the case of items that need to be frequently replaced or refilled, frequent orders are essential. Frequent orders will also reduce your client acquisition costs considerably (marketing cost) as once the client is reached and an order is placed – if the client is happy with the service and keeps coming back, that is a big win.
Abandoned carts – How many people are visiting your online shop, adding items to the cart, but never proceed to finalise the purchase? This information is critical, allowing you to closely monitor if something may be wrong on your website. If you see a large number of users adding stuff to the cart but never proceeding to finalise the purchase, could be:
- an indication that there may be a problem with the website
- maybe the cumulative price of the total items in the order was not as the client expected
- maybe the website is not optimised to the device that the client is using
- could be also that the shipping price was too high
- maybe you are not marketing your website, product or service right
- it could be also that the payment options provided are not convenient to your user
These are some of the most common causes of an abandoned cart. Therefore you need to monitor these closely to understand any difficulties the users may be having and resolving them to ensure a smooth order placement.
There are many more metrics that every online shop owner needs to monitor, but this is the perfect first step to get yourself acquainted with some basics which will then lead you to want to learn more about your website visitor’s behaviours. Keep visiting our blog from time to time, to read our highly informative content.
If you own an online shop already, and wish to learn more about how to study these stats, please do not hesitate to get in touch for a consultation. Alternatively, if you own a business that doesn’t have an online shop, and would like to get a free consultation about which is the best solution for you, speak to us so that we can discuss your requirements.