For Success in e-Commerce
Our team of e-Commerce experts outline an effective strategy for increasing and optimising your sales!
As is commonly known among etailers, a turnover that’s not watched will never improve. This also means that if you do pay attention to your turnover, chances are you’ll be able to improve your online store every step along the way. |
The internet is great for this: you can track your visitors’ behaviour at all times, which gives you access to all the information you need to decide which strategy to take put in place to change their buying behaviour…to your advantage!
This expert advice is a heartfelt appeal to all of you: FOLLOW YOUR STATS! Look them over, spend time with them, take care of them, make them grow day after day. They really are your best friend when trying to develop your e-Commerce website properly and sustainably.
Our e-Commerce experts are here to take you through some simple tips to get your stats growing!
THINGS TO KEEP IN MIND:
1. Not keeping a close eye on your stats is almost criminal: you’re missing out on potential turnover and profitability!|
2. Keep in mind metrics for pirates AARRR for the most important stats to follow
3. Follow your conversion tunnel closely and optimise each step for your customers
4. Your statistics give you an “objective” image of your e-Commerce website: learn to love them
5. You can use concrete marketing campaigns and measure their impact on your business: profit margin, shopping carts, loyalty…but only if you keep an eye on your stats!
Statistics: your best friend for developing your business!
Which figures should you follow?
Each business sector has its “key figures” or favourite metrics. We’re lucky in e-Commerce: everything (or almost) happens online, and it’s possible to have statistics on almost anything you want. A quick overview of the most important factors to keep in mind. Here’s a good test for you: do you know these numbers by heart?
- CAC or Customer Acquisition Cost
Except in exceptional cases (hopefully in yours!) visitors to your site aren’t free. Your marketing and communication costs you, and the traffic you generate is usually in direct correlation with your budget. Your website’s profitability relies on the delicate balance between how much your traffic costs and how much income it generates.
CAC is essential. It’s calculated by the total you’ve spent to acquire traffic (AdWords, email lists, Facebook Ads, etc.) divided by the number of orders actually placed on your site. If, for example, you spend £3,000 in communication and this generates 425 orders, your total CAC is £7.06. Be careful not to calculate the cost per visitor: we only count customers who’ve actually made a purchase.
The following details can be very useful:
> What is your CAC per acquisition channel?
> Per type of customer?
> Per specific sales?
What is your CAC?
- Average shopping cart & profit
Knowing how to effectively acquire customers is a good thing, controlling your CAC is a real priority. The second part of the equation should be looked at just as closely: what is your return on those coveted customers?
Here there are two figures that should come out on top: average shopping cart, or how much each customer spends, and your average profit margin.
Both are directly linked to your site’s profitability: if your average shopping cart is too small, even if you have a good profit margin there’s a risk you might not cover your acquisition costs. On the other hand, if you have a good average shopping cart size and your profit margin’s too weak you will be forced to sell a lot. It’s important to constantly keep an eye on these two figures and make sure that everything balances out!
Here again it’s helpful to keep an eye on these amounts per product category, or try to find the similarities between a certain group of customers. If you discover that certain behaviour is clearly more favourable (for example purchases in a certain category constantly lead to higher shopping carts) you can steer your future campaigns in that direction.
- Conversion rate
This figure is easy enough to understand: how much of your traffic actually become customers? If for 100 visitors to your site you make one sale, then your conversion rate is 1%. A number of factors influence this rate, and sometimes it’s small details that can make a big impact. And you have access to them: don’t hesitate to check out our Oxatis expert advice on those little details that make a big difference!
- Abandonment Rate
While not all of your visitors become customers, some get a lot closer than others. Some are just a few pixels away from the “Confirm” button when they abandon their full shopping carts. This is the case for 67% of filled shopping carts, which will never be converted. This is an area for growth which is important to be aware of and optimise for your customers. We focused on abandoned shopping carts in our previous Oxatis expert advice.
- Return Rate
This is the last of those “don't overlook” figures. Your return rate is the number of orders your customers will send back compared to your total orders. Following your return rate helps you be aware of certain products’ flaws (or lack of popularity). As returns lead to added fees for you and lower customer satisfaction, it’s important to keep a close eye on them.
- Metrics for pirates: AARRR
Developed by Dave McClure, the idea here is to understand above and beyond the figures we’ve already discussed not only which metrics you should keep an eye on, but how you should prioritise them. AARRR (the sound a pirate makes) allows you to organise your statistics in order of importance throughout the relationship you’ll build with your visitors, prospects and customers.
1. Acquisition: these are all of the figures linked to acquiring traffic (cost, number of visitors, etc.)
2. Activation: Your visitors are going to go from being simple visitors to prospects when they sign-up for something (newsletters, creating an account, etc.)
3. Retention: All of those figures that show customers who’ve visited your site more than once, that are more enthusiastic than others (returning visitors, creation of a loyalty card, making a second purchase, etc.)
4. Referral: All statistics coming from “word of mouth” used to find out if your existing customers bring you new customers (referral schemes, retweets or Facebook shares, etc.)
5. Revenue: This refers to all of those stats surrounding turnover and generation of revenue (average shopping cart, turnover, profit margin, etc.)
Luckily with your Oxatis online shop, everything was designed to make this job easier and you can follow your advanced statistics right from your back office! This will help you a lot, especially when monitoring what happens to your incoming traffic at each step in your conversion funnel.
Set goals, put strategies in place and sell more!
Now that the significance of different figures is no longer a mystery to you, don’t hesitate to call 0845 129 4800 if you want a hand with the statistics in your Oxatis solution—our experts are here to help, and it’s time to make the most of the information you have.
As we’ve said, it’s when you start looking at your figures that you’ll be able to start improving them. And this is exactly what the Oxatis experts offer you below: ideas for boosting your turnover and profitability.
- Goal: Increase your average shopping cart
Situation: your average shopping cart is too low or is starting to decrease under price-slashing pressure.
Strategy: you can for example integrate a cross-selling system. When your visitors are filling their shopping carts they’ll be presented with related items.
- Goal: Decrease your abandonment rate
Situation: you think your abandonment rate is too high, or has been deteriorating lately.
Strategy No.1: Systematically contact visitors who’ve abandoned shopping carts in the following hours.
Strategy No.2: Improve your conversion funnel by offering more payment methods (with Oxatis!) or shipping options, or by giving your customers the option of calling customer service to ask their questions directly.
- Goal: Diminish your acquisition costs
Situation: one of your acquisition channels is not profitable enough or you know that your acquisition costs are too high for your field or compared to your competitors.
Strategy No.1: Increase your existing customers’ loyalty. As it costs 5 times less to keep a current customer than to win a new one, we’ve outlined the keys to building customer loyalty.
Strategy No.2: Test new channels to see if they perform better. Multichannel is a strong trend, and marketplaces can also bring in traffic for a reasonable cost. Take a look at Facebook for example, and purchasing more specific traffic, and for categories with higher average shopping carts, consider buying customer databases.
- Goal: Follow the evolution of their shopping habits
Situation: the number of purchases made on mobiles or tablets grows each month (or on the contrary, doesn’t grow).
Take action: More than 20% of people already make purchases on mobiles! Here’s a great reason to follow these customers’ behaviour closely: average shopping carts, purchasing frequency, loyalty, type of navigation, sources of traffic…Optimise your customers’ shopping experience and grab the bull by the horns!
- Goal: Improve your conversion rate
Situation: Lots of traffic, not enough purchases!
Take action: Work on specific landing pages and make sure your acquisition campaigns lead to these optimised pages for maximum conversion and so you can guide them through your conversion funnel. Avoid leading them to your homepage!
Now it’s your turn!