The Definitive Guide 2020
Learn how to run your online business based on ecommerce data
and get actionable insights out of your analytics.
Learn how to run your online business based on ecommerce data
and get actionable insights out of your analytics.
How would you feel if you were an astronaut and your team just assumed that you’d be alright during the launch? No numbers, no tests, nothing.
They just assumed that because it was a clear day that you’d be ok.
This would make you uncomfortable, wouldn’t it?
Believe it or not, many business owners fly by the seat of their pants trying one random tactic after random tactic until something works.
You’re here because you know that guessing and “faking it until you make it” only works for so long. Real success happens when there are processes, trends, and concrete numbers that act as your compass.
That’s the power of ecommerce Analytics and the data it supplies.
We rely on it to have safe flights, to have successful launches, to build great business.
Good data helps us understand the world around us, it provides guidance and helps us make sound decisions, this includes ecommerce data.
If you’re a business owner, data can either make or break your business.
Excited? Scared? A little bit of both?
Good, let’s dive into the world of e-commerce analytics.
E-commerce analytics is a system or tool that allows you to understand your user’s behaviour.
Although most e-commerce analytics tools focus on onsite behaviour, e-commerce analytics goes beyond that.
Onsite, e-commerce analytics tells you where your users came from, how much time they spent looking at a particular product, where they spend most of their time, and much more!
In the grand scheme of things, these numbers lead to a bigger story behind customer behaviour and buyer psychology.
Having some sort of eCommerce analytics tool is pretty much indispensable to having a successful eCommerce business.
E-commerce isn’t like placing sports bets where you pretty much take educated guesses.
To be successful, you’ve got to know exactly what your user is doing on your site in order to best serve them.
Glad you asked!
Different tools offer you different measuring capabilities.
You can keep it pretty simple and track traffic sources, region, and most visited page(s) for example.
You can also go pretty deep and know how much time your user spends on your site, how far down they’ve scrolled on a particular page, and which product(s) they’re intending to buy.
Think about one of your favorite brands. Look at the emails they send you, how they communicate with you on social media, and most importantly, how they make you feel.
Almost feels like they know you or something, doesn’t it?
Well, that’s because they do. They’ve set up their analytics in a way where they can track your behaviour on their website and get a clear idea of what you’re interested in.
Using the AARRR metrics method is one of the best ways to grow your e-commerce business.
Many people overcomplicate business and focus on the wrong things.
With AARRR, you have a clear roadmap of the top 5 things you should be focused on while growing a business.
AARRR stand for:
Coined by enterpreneurship guru, Dave McClure, AARR is often looked to as THE system that drives true business growth.
Let’s get into the different parts of AARRR:
Simply put, how you get your visitors. Most businesses see visitors coming from search engines like Google or Bing, social networks, and paid advertising (via Google AdWords, etc).
Source: Avinash Kaushik
Regardless of what your user acquisition strategy is, it’s important to track where they’re coming from and double down on the sources that feed your website consistent traffic.
This is when a user signs up for a product trial or for your newsletter. The wheels are moving and they’ve started to take actions that lead to them purchasing from you.
It’s all about the benjamins baby! 💵
This is pretty straightforward and the biggest sign of sales funnel success.
Just because they’ve purchased from you once doesn’t guarantee that they will again. That’s why we need retention analysis & cohorts.
Cohort analysis refers to the practice of studying the activities or habits of specific cohorts over a set period of time. It’s a bit like segmentation, but focuses more on historical ecommerce data —using it to spot patterns or changes in consumer behaviour throughout the customer journey.
It’s much easier to keep an existing customer than it is to get a new one.
So how do you create repeat customers?
Understand what they need and customize offers based on that!
So you have these repeat customers but how do you grow and take your business to the next level? Through referrals!
Chances are, your customers have family and friends who could be interested in what you’re offering and nothing is more powerful than a referral from a family member or friend.
Word-of-mouth is one of the big reasons that took Starbucks from a single shop in Seattle to more than 24,000 outlets around the world.
Referral program help in eCommerce growth effectively, you can follow some referral program strategies given.
Often considered THE analytics tool, and with good reason. Free, relatively easy to use, and it’s a Google product.
In it’s simplest form, Google Analytics helps you better understand your customers.
It’s comprehensive analytics features give a clear picture of the performance of your website, content, and products. It’s one of the most commonly used analytics tools on the web and to be honest, one of the best.
(This is Google we’re talking about, after all).
All you need to do is go here: https://marketingplatform.google.com/about/analytics/.
The website walks you through the features and in typical Google manner, makes it a no-brainer to get going. You’ll also get the guide to installing the tracking codes, creating goals, and of course how to read all of that data.
It may look overwhelming at first but after some time, you’ll get used to it. Bonus: It’s very customizable thus making it an attractive offer for many.
Want to know who visited your website? Where the heck do your customers live? Which pages perform the best on your website? How long are people staying on your website? How many visitors are turning into leads/customers?
If you’ve ever asked yourself any of those questions, you need Google Analytics. It can give you detailed answers to all of these and much more.
Coming in at #2 of the must-have analytics tools is another Google product, Google Search Console.
This free tool allows anyone with a website to see how Google views it and gives insights on how to improve organic presence.
Google Search Console’s tools help you to measure site’s traffic and performance so that your website has it’s best foot forward in the search results.
With intuitive analytics that helps you figure out which queries bring traffic to your site to real-time alerts letting you know what needs to be tweaked, Search Console has got you covered.
You can access Google Search Console at absolutely no cost here: https://search.google.com/search-console/about
Having a healthy site is crucial to your success as a website owner. A healthy site ranks better, gets better traffic (real humans and not bots), and generates higher revenues. Plus, this tool is FREE so you really have nothing to lose.
Hotjar is a quick and visual way to better understand customer behaviour on your site.
There are a lot of analytics tools out there but Hotjar stands out due to its visual representation of customer actions via heatmaps.
The heatmaps on Hotjar help you clearly see click heatmaps, scroll heatmaps, download, and share heatmaps, and also move heatmaps. Having the visual representation of your user intentions and interests is certainly useful.
Check out HotJar here: https://www.hotjar.com/tour
Hotjar is a great tool if you want a visual of interpretation your customer data. The heatmaps make it simple to know exactly what’s working for your audience and what isn’t.
Having data is meaningless if you can’t make proper decisions off of it.
Enter Conversific, the analytics tool that simplifies data and helps you act on it rather than just look at it.
Unlike the tools mentioned above, Conversific analyzes the most important data for you so that you can focus on taking action that helps your business move forward.
To get started with Conversific, head over here: www.conversific.com
Sometimes having the massive capabilities of a tool like Google Analytics can lead to wasted time trying to figure it all out. With Conversific, you get an all-in-one, user-friendly dashboard with only the most important data. How’s that for convenience?
At this point, you should have a pretty good idea of why e-commerce analytics are important, what the best tools out there are, and general knowledge of important e-commerce metrics.
Now, how do you actually make sure you’re collecting this data properly?
How do you set up the necessary systems that will automate data collection, positively impact your business, and make your life easier in the long run?
Fixing a bad data collection set-up equals wasted time (and often money), that could have been reinvested in other parts of your business.
Without further ado, let’s get into how you can set up a winning data collection system properly the first time around!
One of the best guides on setting up Google Analytics comes from Jeff Sauer, a pioneer in online analytics and an award winner who’s worked with Fortune 500 companies and world-class entrepreneurs.
His website Jeffalytics offers a detailed breakdown of a Google Analytics set up and how most set it up the wrong way.
You’ll learn how to properly define objectives for your website, how to install the Google Analytics tracking code, identify key KPI’s, and much more.
This how-to guide is excruciatingly detailed and literally holds your hand as you set up Google Analytics.
Many Google Analytics accounts (if not most), are set up with the default view and without further modifications.
While this works fine for some, it’s important to know that limited views can also mean limited data.
Without specific and tailored views, you could be missing out on some key insights that could propel your business forward.
Basically, the more views you create, the more granular data you have, which means the better you can serve your customers which then means, more revenue! You don’t want to be leaving money on the table, do you?
This handy guide by Paul Koks at OnlineMetrics gives you all you need to maximize your views potential in Google Analytics.
We’ve mentioned the incredible ability that Google Analytics gives you when it comes to understanding your audience.
Now, how do you set up custom features like e-commerce tracking? AnalyticsMania is a great place to start for that.
Using this guide, you’ll learn how to set up e-commerce tracking so that you can see those oh-so-important numbers such as conversions and revenue.
This guide will break down the various types of e-commerce reports so that you can decide which ones are right for you.
Other than the ability to customize these reports, you’ll learn the best ways to track your sales so that you know exactly what’s working and why it’s working.
For e-commerce owners and enthusiasts, enhanced e-commerce data is the stuff dreams are made of, but many business owners are passing this incisive and FREE data up.
Why in the world are they doing this?
Because it takes a little patience and some time to get the right systems up and running.
But when you do set it up, you hit the e-commerce lottery of actionable intelligence that leads to higher revenue, engagement, and clicks.
The best way to get there?
This guide by the world-renowned marketer, Neil Patel, gives you the step-by-step way to get set up with enhanced e-commerce and supercharge your insights (and your revenue as well!).
“Ok, I get it. Google Analytics is the greatest thing invented since sliced bread. Is there a setup checklist somewhere that I can refer to absolutely make sure I get it up and running properly?”
Glad you asked!
Up until now, you’ve learned about all of the amazing things that Google Analytics can do for your business.
You’ve been given an abundance of resources from e-commerce analytics experts from all over the world and are ready to set it up the right way.
The team over at Practical e-Commerce has created this easy-to-follow checklist to take away the guesswork and make sure you’re fully taking advantage of Google Analytics.
The Urchin Tracking Module aka UTM, are tags that you add to a URL.
When someone clicks on a URL with UTM parameters, this info gets sent back to your Google Analytics for tracking.
This allows you to clearly see which campaigns, pages, or pieces of content are driving results for your business.
Google URL Builder: https://ga-dev-tools.appspot.com/campaign-url-builder/
To dive deeper into UTM parameters and how to properly use them, check out this ultimate guide from Neil Patel that breaks it all down.
Eliminate the guesswork from your marketing strategy and use UTMs to have concrete data to push your business forward!
In Chapter 1, you learned about Google Search Console and how it helps to make your website shine in Google search results.
You learned that you can find out things like how many people have visited your website, the various places your visitors came from, and even the devices (mobile or otherwise) that most of your users have used.
As one of the leaders in the SEO space, Moz has put together an in-depth article to show you how to squeeze the most juice from Google Search Console.
In this guide, you’ll learn everything from how to add and verify a site on Google Search Console, adding an HTML file, and how to check a robots.txt file.
All of the things you’ll learn here are designed to make your website as search engine friendly as possible and to give you the clearest data possible.
Price and stock information about your competitors and where you are positioned against them price-wise is a very important data point you need to consider if you want to compete in the e-commerce space.
So, how do you set this up? Prisync’s price tracking software is a great service to start with.
And if you don’t how anything about pricing start by reading the various types of e-commerce pricing strategies so that you can decide which ones are right for you.
Now that you know how to set up data collection the right way, it’s time to get into the weeds of that data.
The best place to start? Nailing down who your customers are.
The importance of knowing EXACTLY who buys from you cannot be overstated.
Customers, especially repeat customers, are the lifeblood of EVERY SINGLE business on this planet.
Even top companies with billions of dollars in revenue understand the importance of customer data because it helps them plan campaigns and programs that will keep their current customers while also attracting new ones.
Before all of that, you need to be familiar with some important customer metrics.
In order to get the maximum return on investment from your marketing and ad spend, you first need to build out a laser targeted buyer persona.
This goes beyond demographic information such as age, location, income range, etc.
A detailed buyer persona goes deep into the psychology of your ideal customer.
You’ve got to know their lifestyles, their concerns, the common objectives they’ll have while comparing your products to others, their interests, and more.
A little creepy? Kinda.
Look, I’m not suggesting stalking them to see how they carry on about their day or anything like that.
It’s about having a very good idea about your customer’s interests and mindset when it comes to your product and similar ones.
The best brands in the world know their customers so well that their marketing and advertising feels like a conversation with a friend rather than a sales pitch.
You’ll first learn how to broadly define your ideal customer and then niche it down to specifics.
More importantly, you’ll learn how to keep this buyer persona template open because customers evolve and change over time and you need to adapt to those changes.
Google Analytics boasts 9 different reporting sections under “Audience.”
These subcategories include Overview, Demographics, Interests, Geo, Behaviour, Technology, Mobile, Custom, and Users Flow.
Whew, that’s a lot.
But hey, it’s not as complicated once you spend a little time understanding each subsection.
Thankfully, the team over at Social Media Examiner have put together this insanely helpful guide on how to use Google Analytics Audience Data.
Remember, the better you understand your visitors, the better you can serve them.
Knowing the age range and location of your visitors are some of the most important of all audience data.
Imagine building a loyal tribe of repeat customers that tell their friends, their friends of friends all about how this incredible company (that’s you) just KNOWS them.
Top companies get to this almost cult-like admiration because they’ve been able to build a community of people that essentially doubles or triples their marketing efforts through word of mouth
I mentioned Facebook earlier and that’s with good reason.
Facebook is one of the largest social media networks in the world and it is easily #2 (after Google) in the digital advertising space.
With almost 2 billion accounts, and over $40 billion (that’s with a giant B) in ad spend in 2018, you can imagine how you could reach just about anybody using Facebook.
With this incredible data, you could maximize your campaigns using built-in tools like Audience Insights.
Using this tool, you get to add and delete as many data points as you want and target..well, just about anyone that you want.
Of course, you run the risk of niching too much or casting too wide of a net if you don’t know what you’re doing.
Lucky for you, social media leaders Sprout Social have put together this helpful resource to help you harness the power of Audience Insights.
If you’ve ever received email offers for the best retirement homes and the top power drinks at the same time, you probably know why it’s so crucial to properly segment your audience.
The best businesses know how to create relevant offers and relevant targeting experiences for their audience.
Other than creating relevant offers, segmentation is important for cutting down ad costs, finding out new up-sell or cross-sell opportunities (Amazon does this very well), and allows you to concentrate on the most valuable customers.
So, what determines a segment?
What is the best way to segment your audience? How do other leading businesses use segmentation in real life? These are all answers that can be found here. For another detailed guide on segmentation using Google Analytics, check out this resource.
It’s 2019 and that means that even though your customers have bought from you, they’re constantly being courted everywhere else. Increased competition from other brands means that you’ve got to have a special “sauce”, a certain je-ne-sais-quoi that keeps customers coming back.
In order to build a successful retention strategy, you’ve got to know the metrics that actually matter. Leaders in retention like Shopify know what to track when they’re brainstorming retention strategy.
In Chapter 1, we covered some key metrics that are indispensable in e-commerce and it’s important to constantly refer to those metrics when thinking about retention. KPIs like Repeat Customer Rate, Customer Lifetime Value help to cut through the noise and give you a compass on what to focus on.
For ideas on how to create your own secret sauce that keeps customers coming back, check out this article. You’ll see how companies today are absolutely killing it with referral programs, flash sales, and more engaging projects that customers can’t get enough of.
Selling a product is not a decision that should be taken lightly.
How can you guarantee that someone out there will actually exchange their hard-earned dollars for your product?
Understanding the market, knowing your customer pain points, capitalizing on trends, and staying nimble are signs of a business that will be around for a long time to come.
Here’s a good place to start when working on your product market fit research. Evaluating market fit isn’t just for the beginning stage of your business.
Savvy business owners are constantly watching trends and analyzing market changes. This strategy gives you the upper hand in creating better products and experiences for your audience.
This detailed analysis gives you actionable strategies on how to exploit a product within its identified market and how to measure success.
CRM stands for customer relationship management.
Today, most CRMs come in the form of a software that makes managing the ultra-important customer relationship very easy.
Well, most CRMs provide a central place where data like partnerships, contacted customers, prospects, leads, and much more can be found.
Some of the biggest and most tangible benefits that CRMs have to e-commerce businesses include:
improving customer understanding
more affective customer attraction
better customer retention
lower management costs
customizable and nimble integration with various e-commerce platforms
When it comes to building and maintaining prosperous relationships with customers, a great CRM is indispendable.
A major factor in creating repeat customers is keeping the customer happy. Happy customers stay and frustrated ones leave to better options.
As a business owner, you’ve got to have systems in place that allow you to see if you’re providing the best possible customer experience.
From the moment visitors come to your website to when they land on the checkout page, it needs to be as silky smooth as possible.
With this handy guide from REVE Chat, you’ll be able to measure important metrcis like Net Promoter Score, Customer Effort Score, Conversion Rate, and Repeat Customer Rate.
Deciding on where to allocate marketing spend is certainly not a walk in the park.
For example, You’ll find countless articles on the internet claiming that social media has become “pay-to-play”, which encourages business owners to spend more on ads.
Although there is some truth to those claims, many business owners still spend money without blindly and see little to no return on investment.
This isn’t just exclusive to social media.
This goes for every marketing channel.
That’s why the importance of actionable data cannot be overstated.
Once you’ve defined your business goals, set up a great data collection system, and know your audience, you’ll be in a better position to know EXACTLY where to spend money to boost your marketing efforts.
Speaking of marketing spend, let’s get into some important e-commerce acquisition metrics.
This is the total number of times a user navigates to your website.
As an e-commerce store owner, you’ve got to know how many people are coming to your website, where they’re from, and on which device so that you can serve them better.
A transaction can be defined as a sale or purchase of a good/service.
This is when your visitors become customers.
Revenue is the income generated from the sale of goods and services before any costs and expenses are deducted.
Careful to not confuse this metric with profit.
Profit is achieved when there’s a positive balance after deducting expenses from revenue.
This metric helps you understand your customer’s spending habits and can help you to indentify opportunities to upsell, downsell, and make tailored offers to them.
To find out your AOV, divide the sum of generated revenue by the total number of orders.
Unique Purchases refers to the total number of times a product (or set of products) was part of a transaction.
Here’s a good example from the team at Marketing Mojo:
“If you see that product A has been purchased 500 times, but only has 10 unique purchases, it means that product A was bought on 10 separate occasions in quantities of 50 at a time.”
This metric indicates the percentage of visitors that come to your site who become actual customers.
In order to find your conversion rate, you need to take the total number of sales divided by the total number of visits to your site.
Customer Acquisition Cost or CAC refers to the overall cost to acquire a customer including the cost of producing, storing, and shipping the items that a customer purchases.
This metric can sometimes be overlooked but is a very telling measure of the likelyhood of a business’ success.
If it costs you more to acquire customers than the value (revenue) those customers bring, you’re going to be in trouble very soon.
The team over at BigCommerce has a helpful guide on how to achieve a positive CAC here if you want to read more about this.
Return On Advertising Spend or ROAS measures the efficacy of your digital advertising campaign.
This tangible measure lets you know what’s working in your campaigns and how you can fix it.
To calculate ROAS, You take the revenue generated from a campaign and divide it by the cost of the campaign; the number that you get from that calculation is the ROAS.
I’ve mentioned how you can calculate Customer Acquisition Cost above, but if you want to dig deeper, check out this article by Neil Patel that gives you a better picture at how this metric can determine your company’s fate.
You’ll learn the importance of improving on-site conversion metrics, enhancing customer value, and properly using your CRM to raise your CAC.
Google Analytics Acquisition Reports
In Google Analytics, you can find 10 separate reporting sections under acquisition.
That means that you can easily discover the marketing tactics that are bringing the most customers to your site and double down on them. Social Media Examiner has assembled this practical guide on using Google Analytics Acquisition reports to help you identify the marketing techniques that are bringing the most visitors and leads to your website.
Google Ads (formerly as AdWords) is a popular marketing channel for businesses of all sizes.
As the undisputed search engine in most of the world, there’s a pretty good chance your target customers uses Google.
Over the years, Google Ads have grown in popularity and thus price, so it’s important to note that it can very easy to waste money on Google Ads that do not bring in the customers you want.
With the proper customer and market research, you’ll be able to correctly invest in Google Ads with a more measured approach.
To check the success of your campaigns, you’ll need to link your Google Ads account to our dear friend, Google Analytics.
When properly done, you’ll have access to a rich set of actionable data that will help you tweak your campaigns to get the most bang for your buck.
Here’s how you can do that.
Facebook boasts an incredible arsenal of analytics tools to help you get the results you want from your paid marketing efforts.
To fully take advantage of their tools, you’ll need to understand how Facebook’s analytics tools are broken up and what metrics are the most important in each analytics subdivision.
The three analytics platforms on Facebook are Page Insights, Audience Insights, and Ad Manager.
Due to the large amount of information these analytics platforms dish out, it’s easy to be overwhelmed.
Use this guide to help you focus on the metrics that are most important.
Display ads usually have the goal of getting the user to click-through the ad and take an action on a landing page.
All good marketing strategies require setting goals and display ads are no different.
In order to have success with display ads, you’ll need to set some solid, measurable goals. Some common goals for display ads include:
After you’ve set those goals, you’ll need to make sure you’re using the right targeting methods (such as keywords, demographics, interests, etc) and catchy copy that will prompt the user to take the wanted action.
Here’s a handy guide on using data to supercharge your display ad campaigns from landing page experts, Instapage.
Search Engine Optimization is the process of affecting the visibility of a site in a web search engine’s unpaid search results.
Many people often think that SEO is simply about looking at high performing keywords and stuffing as many of them as possible in order to rank high on search engines like Google.
It’s not that simple, and simply stuffing as many keywords into a piece of content or ad can actually hurt your website’s visibility instead of helping it.
Carefully studying relevant keywords, creating helpful content (long form, short form, rich visuals, etc ), and writing focused, rich copy for ads are all part of a strong SEO strategy.
And what’s one of the best ways to measure your SEO efforts?
You guessed it…..Google Analytics. Among it’s multitude of reporting options lies the ability to dissect the keywords and organic traffic that impact your business.
Using Google Analytics to find out things like clicks, impressions, average page positions can go a long way in making your website favorable to search engines.
To dive deeper into understanding things like quality of traffic and creating custom SEO dashboards in Google Analytics, check out this guide.
There are so many social networks out there that it’s difficult to keep up with them all.
Even more difficult for e-commerce business owners is knowing which metrics to focus on when investing in social media marketing.
Here’s the thing, you don’t need to be on every single social media platform.
You just need to be on the ones that are working for you.
There are plenty of businesses out there who are simply on 1-2 social media networks and are killing it.
This only happens when you’ve done your due diligence (audience research, market fit, competitor analysis, etc) and have a social media marketing strategy in place.
Without these things, social media can be black hole that just absorbs your time and money.
In these guides, you’ll find how to track important social media metrics using Google Analytics.
Despite the barrage of articles that say so, email marketing is far from being “dead”.
Email marketing is one of the best ways for business owners to converse with their audience.
When someone opts into your email list, it usually means that they’re interested in learning more about you and what you have to offer.
It’s often the first place where you get to make a solid first impression to a potential customer.
Email can be a powerful tool when you’ve figured out how to create content for your list that isn’t just a crappy email announcing a sale you’re having that week.
Just as important as the content itself is the ability to track your efforts and seeing where you can improve your open rate, click-through rate, and reply rate.
This guide by Campaign Monitor breaks down how you can easily set up email campaign monitoring using Google Analytics.
To learn more about the most important email marketing metrics, check this great resource out by marketing leaders, HubSpot.
You’ll learn how to track conversion, rate, email share rate, and much more!
Referral traffic can be defined as traffic that has come from links on other websites rather than directly or from searches.
In Google Analytics, direct traffic is often reported as traffic that has no data on how the session arrived at your website or when the referring traffic has been configured to be ignored.
The most common causes of direct traffic are often manually entered web addresses, broken tracking codes, and non-web documents. Both referral and direct traffic can be excellent sources of new leads for your business and can give you insights into the most popular content and influencers in your industry.
Put simply, multi-channel funnels show you how your marketing channels (aka trafffic source) work together to generate sales or other outlined conversion goals.
Often times, the last touchpoint before the conversion gets all the credit but that may not be the entire story.
Knowing things like how much time the user spent from the first visit until the purchase goes a long way in helping you optimize your marketing strategy.
This guide from the team at Online Metrics reveals the best way to go about creating a solid multi-channel funnel reporting system.
Remember that multi-channel funnels can get extremely complicated and is a more advanced technique once you get familiar with Google Analytics.
In the battle for the customer’s attention and loyalty, you’ve got to know what your competitors are doing.
This allows you to better understand not just your business but gives you the necessary information to seize untapped opportunities.
Setting clear goals, understanding exactly who your competition is, speaking to your competitors’ customers are all strategies that will help you stay ahead.
Be careful to not be a slave and becoming reactive to what your competitors are doing.
Finding smart ways to add competitive analysis into your regular audience and market research will save you time and unnecessary stress.
Here are some of the best ways to conduct thorough competitive analysis.
Always keep in mind that doing the research alone is not enough; it’s about taking that data and putting it to work in your business.
Why is one product’s sales skyrocketing while the others have significantly dropped?
Why is one product super popular this month vs last month?
Were sales fluctuations caused by AdWords campaigns?
These are all questions that product analytics can provide answers to.
Product analysis allows you to understand which products and product lists are performing, why they’re performing or underperforming, as well as what you can do to optimize sales.
Before getting into the weeds of effective product analysis, let’s look at key product metrics.
This metric refers to the total number of products in your inventory.
Number of active products is the total number of products currently available in your inventory and to customers to purchase
Gross margins is the difference between revenue and cost of goods, divided by revenue. It’s the total percentage of sales revenue that the company keeps after incurring costs.
The number of reviews indicates the number of customers who have given your store some sort of public feedback.
It doesn’t take into account customers who have purchased without reviewing or customers who have given provate review not available to the public.
This figure represents how often a visitor clicked on a product detail page or box.
This measures when the product was placed in a visitor’s shopping cart.
When the product was removed from a visitor’s shopping cart
To find out this percentage can be calculated by dividing the number of purchased products by the quantity of product views.
When there’s a big holiday coming up, the staff at malls are often hard at work organizing their inventory to guide the way customers shop.
This is merchandising 101; designing a physical or online store in a way that makes it easy for the customer to buy.
If you’ve ever purchased something online and it was a smooth, quick process, that was no accident.
That brand carefully engineered their ads, landing pages, email campaigns and more to make it a no-brainer buying experience.
Now, think about the opposite.
If you were to try to buy something online and the site was clunky, took a long time to load, or you couldn’t easily find the checkout button, would it be the same, no-brainer sales experience?
You’d probably click off that website within moments.
As an e-commerce store owner, having a solid merchandising strategy plays a major role in your short and long term success.
Here are 5 ways:
Doesn’t that sounds amazing?
Sales are good but profitability is even better.
Knowing how to maximize cash flow is key in growing your business and staying profitable for years to come.
Source: Online Metrics
Use this detailed breakdown by the team at Practical E-Commerce to learn how Google Analytics can help you track profitability.
You’ll learn how to create helpful reports like “ Gross Profit by Category” and “Advertising Cost By Category”.
By now, you already know that Google Analytics’ abilities knows virtually no bounds. In addition to all of the actionable reports, it can generate for you, you can also use it to easily identify your most popular products.
By doing this, you’ll be able to make decisions that will maximize your sales and increase your revenue.
Get the step-by-step guide to finding your most popular e-commerce products here.
To support the step-by-step Google Analytics guide, check out this resource to see examples of what top brands like River Island and Rifle Paper look for when choosing products to feature.
Hot products can be defined as having one or a combination of characteristics like Most Profitable, Highest Sales Margin, Top From Paid Search or Best Bundles by revenue.
These products are your best advocates and one of the most powerful brand evangelists.
With the right promotion strategies and the proper use of social proof (customer reviews, case studies, etc), Hot Products not only help with the sale of products but also boosts how your brand is seen!
Studies show that a whopping 54% of e-commerce shoppers read reviews before making a purchase.
Cold products are products that can be identified as Lowest Quantity Sold, Lowest Gross Profit, Lowest Sales Margin, Most Refunded Products, and Most Abandoned Products.
There are a number of reasons why a product would be classified as cold including poor product placement, boring product description copy, low-quality product image, lack of social proof, etc.
When you figure out what the issue is, you can then test to see if you can turn cold products into hot ones.
Goodbyes are difficult but sometimes, they’re necessary.
As an e-commerce owner, you’ve got to know when a product isn’t cutting it and go back to the drawing board.
Yes, even with customer persona, market analysis, product analysis, sometimes, things could still fall flat of your expectations.
As mentioned in the paragraph above, it may not only be the product’s fault.
It can be a combination of worse user experience on your website, bad mobile responsiveness, or even inventory costs.
Before you jump the gun and just press DELETE, here’s a helpful guide on the 6 steps you should take before removing a product.
In layman’s terms, product bundling is strategically selling multiple products together at a combined price.
This strategy holds benefits for both the e-commerce store owner and the consumer.
For the owner, bundling can increase efficiencies and reduce marketing and distribution costs.
For the consumer, it gives them a single source (your store) as the solution for multiple needs.
Behemoths of e-commerce, Amazon are experts at product bundling and making you feel like you’re always getting a better deal if you buy two or more products together.
Understanding activity around specific products in a bundle can be a little tricky in Google Analytics but this guide shares how you can do it!
You’ve probably noticed the use of the word inventory throughout this chapter and that’s with good reason.
Inventory management is crucial to the success of your business because it affects order fulfillment, customer satisfaction, and revenue.
It’s fair to say that poor inventory management = a dead or soon-to-be dead business.
One of the critical aspects of inventory management is being proactive and knowing when to re-up on orders to satisfy customer demand.
In a study conducted by UPS, 42% of shoppers abandon shopping carts because the items are out of stock.
Proper navigation design is indispensable in keeping visitors on your site and buying from you.
The best information archictecture combines the users’ desires with the business’ goals.
From the header to the product categories, your information structure should make sense.
Of course, I’m not saying to spend 30 hours mulling over how big your search bar should be, but you should know how to categorize your website’s pages and products so that it’s very easy for visitors to make a purchase.
Successful brands like Best Buy and Amazon have a navigation structure that houses “Parent Categories” and Subcategories” to make the shopping experience easy.
You can read more about that here.
While offering discounts is a great strategy to increase conversions and revenue, offload excess inventory, and increase customer loyalty, they can also eat into your profits.
So how can you create irresistible discounts without them taking a massive toll on your pockets?
Here are 5 ways:
You can track how well these discounts are doing using the Enhanced E-Commerce reports in Google Analytics.
With this powerful data, you can see just how effective your discounts are and adjust accordingly.
One way you can ensure that your business stays afloat and thrives is to be aware of its shortcomings.
There will be flaws, there will be frustrations, and there will always be opportunities to improve.
Having systems in place for goal setting, data collection, and competitive analysis are all great but you also need a system where you can get important feedback.
A feedback channel is one of the greatest areas of conversion optimization because it allows you to take a walk in the customer’s shoes.
Another big piece of conversion optimization is having systems in place to test things like page load times, mobile responsiveness, and more.
We’ll take a look at great tools you can use a bit later in this chapter but first, let’s look at some top conversion rate optimization metrics.
This KPI indicates the percentage of visitors that come to your site who become actual customers.
In order to find your conversion rate, you need to take the total number of sales divided by the total number of visits to your site.
Bounce Rate refers to the percentage of people who leave your site immediately after arriving.
Source: Neil Patel
This can happen if you’re not using the right keywords in your campaigns, if your website is confusing or takes a long time to load, and if your site is not mobile-responsive, amongst a host of other reasons.
To discover your bounce rate, divide the number of people who leave your site by the total number of visitors.
Your cart abandonment rate is the percentage of users who’ve added items to their cart but leave your site before completing the checkout.
To find out your cart abandonment rate, you need to take the number of people who’ve abandoned the checkout process in your store and divide it with the total number of people who’ve entered the checkout process (including those who’ve completed purchases and those who haven’t).
As of 2018, cart abandonment rates in e-commerce ranged from 50-80%.
That’s way too high.
That’s a lot of time and money down the drain.
Unfortunately, cart abandonment still remains a costly and frustrating problem for many owners because the reasons behind cart abandonment vary vastly (another reason why regular customer feedback, optimization, and testing is crucial).
You can nail down on these reasons and cut down cart abandonment rates by making use of the Conversions and Shopping Behaviour reports in Google Analytics.
Product Rate Conversion is understanding how many visitors turn into customers from your product page.
In other words, it measures how effective the images, copy, and other elements are on your product page(s).
Page load time is the total amount of time it takes for content on a particular URL to load.
A faster page load time is a sign of a business armed with the technical infrastructure to handle things like traffic surges and numerous orders placed at the same time.
Time spent on site refers to the time (in seconds or minutes) visitors have spent on your website on average.
It’s important to know that sometimes this figure can be misleading due to visitors leaving your site in another tab while not actually on it or similar cases.
The modern customer wants as much personalization as possible. Gone are the days of creating generic, one-size-fits-all messaging and sales experiences.
Knowing what’s it like to be in your customer’s shoes gives you the opportunity to create personalized messaging, experiences, and offers.
As we mentioned in the previous chapter, your data plays a huge part in helping you understand your customer journey.
Using this guide, you’ll learn the importance of customer touchpoints, how to map your customer journey, and how to set tangible goals that will improve your conversions.
Similar to multi-channel funnels (mentioned above in Chapter 5), assisted conversions refer to the interactions a customer has with your website leading up to that conversion, but not the final interaction.
Source: Analytics for Humans
Essentially, assisted conversions help to paint a bigger picture of every step before your customer purchases.
Understanding how to minimize flaws in assisted conversion reports and multi-channel funnels, check out this article.
Data is only as good as the tools used to collect it. Let’s take a look at some of the best tools available for conversion optimization:
Many businesses ruin their customer experience using intrusive pop-ups and annoying messages. OptiMonk was built with the human-centric approach to marketing and sales.
With a comprehensive toolkit of user-friendly messages, you’ll never have to worry about annoying your users again.
As covered in Chapter 1, HotJar is one of the leaders in creating accurate, detailed, and visual data for businesses looking to understand their customer behaviour.
Through the use of their heatmaps, you’ll be able to see exactly where your visitors are spending the most time on your site so that you can improve their experience and convert them into customers.
Google Optimize is built on Google Analytics which means that you get to use your existing GA data to quickly see what can be improved on.
You can also benefit from an advanced statistical modelling tool as well as a suite of sophisticated targeting tools.
Optimizely gives you access to a suite of A/B testing tools that allow you to effectively target your messaging and launch more personalized campaigns.
As you know, Google Analytics is THE analytics tool to use.
With its massive reporting capabilities, customizability, and integrations support, it’s a must use for businesses of all shapes and sizes.
Conversific takes the incredible amounts of data from Google Analytics and simplifies it so that business owners can focus on the metrics that matter the most.
With aggregated data and actionable reports, you’ll know exactly what to do next to take your biz to the next level. You can also find a more general list of top ecommerce tools used by 10,000 stores.
User Experience or UX is all about the human experience on the website.
Everything from the aesthetics of your website to the checkout process play a role in UX; but how do you actually measure this?
How can you quantify your customer’s emotions towards website?
You can also measure your site’s UX by using The Standardised Universal Percentile Rank Questionnaire or SUPR-Q.
This method is used to measure trust, loyalty, and appearance of your website using 8 questions that participants answer with Strongly Disagree–Strongly Agree on answers.
The general rule for bounce rates is to keep them as low as possible, especially for paid traffic.
Bounce rates of over 30-50% usually mean lower conversion rates and is an indicator that something in your marketing funnel and/or website needs to change.
Of course, there are exceptions to the rule but it’s important to keep an eye on bounce rate trends in your Google “Acquisition” reports.
Having high performing landing pages is crucial in improving conversion rates in your business.
The role of a landing page is essentially threefold: 1) attract the right audience 2) get that audience to engage 3) get them to take the necessary action.
Source: Practical Ecommerce
Of course, this is easier said than done but it’s not rocket science either.
Here’s your guide to creating and optimizing landing pages that get you the reach, engagement, and conversions you want.
Tech reports in Google Analytics tell you how your visitors are viewing your site.
More specifically, the reports tell you which browsers your visitors are using.
Now, why is this important to know?
User experience differs greatly on browsers and you need to know how to optimize your website for the browsers your visitors are using. eCommerce Develompent is the key to your user expirience success.
We’re living in a mobile world so it’s imperative that your site is optimized for mobile users.
This means testing your site for mobile load speed, ensuring a clean and smooth navigation experience, and making the buying process as resistance-free as possible.
Here’s a more comprehensive list of actionable techniques for mobile optimization.
Another underused conversion optimization technique is setting up internal site search reports.
What does this mean?
Well, it means having a better understanding of the keywords visitors are using on your website.
A lot of people focus on keyword optimization for search engines but not enough on internal site keyword optimization.
Being able to track popular keyword search queries on your website gives you room to optimize content, product search, and more!
Here are 5 Analytics reports you can set up for internal search.
A funnel is a navigation path that you expect users to follow to achieve pre-set website goals.
By setting up different types of funnels in Google Analytics, you can clearly see where users enter and leave the sales process and thus have plenty of actionable data to improve the sales process.
Here’s a bookmark-worthy guide by the team at Optimize Smart to help you out.
Finally, implementing a responsive live chat app on your e-commerce website could help gather more insights into your user experience directly from your visitors”.
In this guide, you’ve learned all about the sometimes-complicated-but very necessary world of e-commerce analytics.
You’ve learned the importance of being data-driven and how the data you collect can either make or break your business. You’ve uncovered the best ways to set up accurate data collection using some of the best tools on the planet (Like Google Analytics, HotJar, and Conversific).
You’ve discovered the innovative ways to nailing down your customers, how to create products they’ll love, and how to keep them coming back using the power of segmenting. You now know how to determine which marketing channels are worth pursuing and how to measure their return on investment.
Last but not least, you’ve learned how to ensure you’re always getting the most from your store by optimizing page load times, mobile responsiveness, and more.
You see, data is more than just percentages, graphs, and reports. Data tells a story. It’s up to you to determine whether that story is a good one or bad one.
I hope this guide showed you how to understand your data better in 2019.
And now I’d like to turn it over to you:
Did you learn something new from this guide?
Or maybe you have a question. Either way, leave a comment below right now.
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