3 Important Analytics to Track for Ecommerce Success (Part 5 of 5)
Successful ecommerce businesses rely heavily on three core elements: acquisition costs, conversion rates, and customer lifetime value. Each of these becomes increasingly complex the deeper you go into testing and analysis, and you’ll always find more and more things to test in your business to make these metrics even more effective.
But don’t let the complexity scare you — that’s part of ecommerce’s charm. The world is your oyster. Take a brick and mortar store – there are only so many customers you can reach. But with an online shop – your reach is limitless.
If you strategize correctly, these three core elements will serve as your company’s growth engines. Ready to get started? Ask yourself these three questions to grow your customer base and increase your revenue.
Acquisition Costs – How well am I attracting users?
Anybody can buy traffic, and most people do when they’re trying to bring in their first customers. You may shell out some cash yourself to get your business going, but your acquisition costs should go down over time. Organic searches, social media engagement, and word-of-mouth marketing should all lower your financial output and give you a better customer lifetime value ratio.
Conversion Rate – How well am I selling?
Your site is up and running, humming along and generating a decent amount of sales. But how decent is decent? Are you missing key opportunities to convert users? How many times do people visit your site before they buy? Looking more closely at your conversion rates gives you a better picture of your site’s actual health and where you can do better. Start by analyzing your overall conversion rate, then test elements such as content, price, and design to optimize your store to convert as many visitors as possible.
For more information on conversion optimization and testing, check out our CRO blog series.
Customer Lifetime Value – How well am I engaging users?
With every first purchase comes an opportunity to start a new long-term relationship. Sure, your dance card will fill up pretty quickly as you try to woo all your customers into sticking around. But unlike dating, your bottom line actually increases the longer you and your customers work together and the more customers you have.
The Benefits of Hiring an eCommerce Agency
If you’re just starting out, a DIY ecommerce strategy will likely serve you best. You can test and tweak different areas of your site until you’ve started generating significant revenue. This is a great opportunity to learn about branding and online marketing while staying within your means if you have a small budget.
Once you’re financially ready to expand the company, you may want to work with an ecommerce or digital marketing shop to ramp up your operations. You’ll need partners and team members who can execute different parts of your business with a high level of expertise, including marketing strategies and branding initiatives.
At Metacake, we use our expertise in branding, marketing, technology, design, and optimization to take businesses to the next level. Establishing your brand is one of the most important things you’ll ever do for your organization. We help you define your company’s voice and image, and use innovative marketing strategies that attract customers and position you as an industry leader.
Whether you choose to go ahead on your own or are ready for a professional ecommerce partner, if you remember to always be evaluating your acquisition costs, conversion rates, and customer lifetime value, you’ll have a good shot at success with your ecommerce store.