Measuring the Success of Your Online Business

One of the fundamental truisms of any business is; “If it isn’t measured, it isn’t managed.”*
  
Performance matters – naturally – but more important is knowing how much you’re performing. (Or not…)

The crunch: If you’re not measuring the performance of your business, you cannot improve. Here's your website checklist to make sure you covered everything.

The #1 business mistake for most business owners - running your business blind!

For example - do you know:

How many new visitors your website received in the last 30 days?
What percentage of them turned into paying customers?
How satisfied your customers are?
The average value of your customers over time?
How & where your clients are rating your company?

When you first launch an online business, your attention is taken up with getting it up and running. Then you have to shift focus to what’s needed to get ahead and stay ahead.

Knowing some important figures will help you see what’s working, understand what can be improved and spot weak points in your company that you should put more attention on.

Every business is unique — which means everything you measure will be, too.

We’ve put together a few important areas – what the marketing boffins call ‘metrics’ – to consider in your business. You can also go through this checklist here.

Visitor Traffic

You can make better decisions about the direction of your eCommerce site when you have insights into your visitor statistics and the story behind them.

Google Analytics is quick and easy to set up and can give you real-time updates on:

Where is your traffic coming from?
What devices are they using?
How long do they stay?
How many new visitors vs returning?
What’s the bounce rate on particular pages?

You might see that your PPC ads aren’t pulling in customers as you hoped – maybe do a little more research and revisit your keywords.

Oh, but those Instagram posts are spiking – how can you make them work even harder?

BTW, Google Analytics is what they call a “freemium” service, meaning that small businesses can use the basic service at no charge. However, there will be a fee if you want to use its more advanced features.

Conversion Rate of Visitors - All websites are created with an intention, whether it is sales, lead generation or communication. However, if your site is not constructed in a way that encourages or allows visitors to complete the desired actions, then you aren’t gaining anything from having the site. To calculate your conversion rate, divide the number of visitors who performed your desired action by the total amount of visitors. If your rate is below 4%, chances are there are many different strategies that you could implement to turn visitors into customers.

Sales Conversion Rate

How many people coming to your site are actually buying? (Kind of the point, after all…)

This is your Sales Conversion Rate – a percentage simply calculated by dividing the number of people who made a purchase by the total number of visitors.

What is a good conversion rate for your online business? And how do your company’s conversion rates stack up against the competition?

Some wag once said, “A good conversion rate is one that’s higher than it is now.”

Depending on your niche, eCommerce conversion rate averages can vary wildly – from sole operators with one or two products to titans like Amazon selling literally millions.

According to a 2017 study, the average conversion rate for e-commerce is just 1.6 percent.
That means that, for every 1,000 visitors, only 16 clicked the ‘buy’ button.

Don’t get too hung up on industry benchmarks though. You’ve got your own path to go down and the results will follow. It may encourage you to look at your traffic strategies though…

Of course, a valuable factor of your conversion metric will include where the sale came from – was it a sales email? A PPC ad? Organic search? Look at which channels deliver the best returns for your investment. Here's a guide on how to take your business online and to the next level.

CHANNEL: AVERAGE CONVERSION RATE

Organic: 16%
Google Ads: 3.75%
PPC ads: 2.35%
Social Media: 0.71%

Like all your metrics you can use this information to better manage your marketing strategy. Try a new idea. Test it. Measure it. Test again.

Cart Abandonment Rate

Referring to customers who add items to their cart but leave without making a purchase, Shopping Cart Abandonment is very common, with trillions of sales dollars left unrealised every year. It’s an extremely important metric because of its direct impact on your revenue.

A high cart abandonment rate is a sign you have problems in the checkout process. You hooked the fish, what can you do to get them into your net?

A few tweaks could help build trust and improve your rate…

- Is your checkout process simple? It should be completed with as few clicks as possible.

- Is all relevant information clearly displayed? Pricing, shipping, delivery estimates should all be highly visible.

Abandoned shopping carts don’t have to mean the fish got away. You can follow them up with remarketing campaigns. It’s a great opportunity to ask in an email why they didn’t transact and what you can do to change their mind.

Customer Acquisition Cost (CAC)

Getting new customers can be expensive. To see how effective your sales and marketing is, divide their cost by the number of new customers acquired. Compare this metric with your revenue and you should get a picture of your budget efficiency.

Anything you can do to reduce your CAC value means you should expect more profit. For example, if you are getting organic leads through blog content, then you don’t have to spend as much on ads. If your current customers are happy, encourage their good reviews so you can get new customers.

The Mobile Experience

With over half of eCommerce transactions happening on smartphones in 2021, it can’t be stressed enough the importance of your online store’s mobile experience. Today’s consumers are fickle with short attention and abandonment can happen in a heartbeat.

Beyond the inbuilt responsive version of your site that most platforms offer – you should rigorously test every aspect of the customer journey on a hand-held device. Most of it can be modified to streamline the user experience.

Navigation must be smooth. All sections should be easy to locate and no more than a click or two away. The checkout process: painless. Test it yourself. Get others to test it.

Load speed on mobile is crucial – there are many online tools to measure that.

Many companies are moving to a standalone app of their site – but let’s not get ahead of ourselves.

Use your own eyes

While there are a lot of digital tools to provide actionable data, some things you can only measure by seeing for yourself. What are your competitors up to? How are their customers responding? How are your customers responding? Don’t be afraid to ask – you might learn how you can do more of what you’re doing right simply by finding out what your customers like. Go through the checklist and make sure you covered all the above points and even more here.

*That quote is credited to Peter Drucker, widely considered the man who invented modern business management. He wrote 39 books on the subject and is generally regarded as the greatest management thinker of all time.

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