It's Monday morning, so you check your KPI Dashboards in Google Analytics and Magento. Everything looks ok. Great, you can get on with answering some emails. If there's a ring of truth here, then you're not alone.
Analysing performance of an ecommerce store does not need to be a data-crunching chore. It should be an exciting opportunity to learn something new about your customers and how they use your website. These insights can then be used to take pro-active actions to improve profitability and win the admiration of your colleagues!
Why Measure Performance?
I have yet to find any crystal ball solutions, so the next best thing is to use past performance as an indication of where you are heading, and why. Then add your knowledge, expertise and some gut-feeling to determine the best actions to take to improve on past performance. Simple.
If you don't have an analyst on your team, please don't ignore this vital aspect of running an ecommerce site. You need to be selective with what you do with your time.
Determine What You Are Trying To Achieve
You do need to know what good looks like, some context is important.
Comparison with a previous period (Last Week, This Week Last Year, etc) and against budget are standard. Industry benchmarks can also be used; but I am wary of using benchmark data - unknown variables can skew KPIs, and comparisons should be made with caution.
Remember, as the name suggests, KPIs are Indicators of Performance. They do not tell the whole story. A decreasing AOV may be perfectly acceptable if your business strategy is to focus on lower priced products; but you'll need a higher Conversion Rate or increase in Visits to counter the lower AOV.
Use Trends, Not Absolute Numbers
If you have ever used two tools to measure the same metric, then you'll know it's near-impossible to have the same figures reported by both. They'll collect data in different ways, and present different results.
So, irrespective of which tool you are using, it is the trend that holds the key. Being 100% accurate with the absolute number of visits last week is less relevant than compared with how many visits you received each of the previous 8 weeks or 12 months. A downward trend will indicate that your customer acquisition channels need closer inspection.
You may not need to invest more money to learn more, but you do need to know where to look. Most businesses will have more data available than anyone has time to properly use. Ensure that you consider these sources before you reach for a credit card.
- Talk to your Customer Services Manager to understand what topics are prompting customers to get in touch by email, phone or social media. Can reasons for contact be reduced with more information or self-service online?
- Has there been any recent customer satisfaction surveys? There will usually be some useful nuggets of qualitative data.
- Company and Product reviews: What is being said about you? These are customers who have taken time to write about their experience, and should be listened to. Don't only check your paid-for solution (if you use one), check other review sites as well.
- Not for the faint-hearted, but ask your colleagues in the office what 'one thing' they would change on the website (if they've not already voiced their opinions!). As ecommerce professionals, we'll view and use online stores in a different way, and may overlook something.
- In a multichannel company, take some time to talk to store managers about customers and questions they ask. Online and offline buying behaviour often differs but you can still learn something from each other.
- Sales data. There's a wealth of information here, and most useful when compared with previous period. If sales in a particular category are down, then have you lost visibility in search results, is industry demand lower, or do your competitors now have a more attractive product than you?
- Profit and Loss statements. Profit is determined by outgoing costs, so: Have you reviewed fulfilment contracts recently? Are there process efficiencies to be found? Or is your packaging supplier still priced competitively?
- Stock holding. If sell-through is low on a specific item, then what can you do to increase visibility, click-through and conversion?
- The humble marketing email will tell you which categories or articles your customer database is currently interested in.
- Online user testing. It can be low-cost and easy to see users interacting with your website, with tools such as User Testing and What Users Do.
- If you're serving product recommendations, then you may be able to see which products are bought as add-ons when an item has been Added to Basket.
- Heatmap and user behaviour tools such as Hotjar and Crazy Egg. For example, overlay this with your Time On Page metric to understand if visitors are reading down to the bottom of articles, and which onward links are proving popular.
- Be sure to know the winners and losers from any A/B or MVT tests you have been running.
- Use previous performance as an indicator. You need to have a good idea of the history of your website.
- There are many tools you can use to access industry and competitor data. Options include SimilarWeb, SEM Rush and Advanced Web Rankings. Free trials are available.
- Site speed. A faster site will help with site visibility in search results,and reduce visitor frustration. Google PageSpeed and WebPageTest are free to use.
- Check in to your Google Search Console as well to see how Google views your website, including any errors it sees.
Whoa, That's Too Much!
I am not advocating that you review all of these every week. However, I would recommend dedicating time each week to learn more about what visitors are doing and buying (or more importantly, not buying).
We may only be looking for a spark to generate an idea. And the more we persevere, then the better the chance of finding something to act on.
Most businesses are now drowning in data. The key is to know how to use it, what decisions to make as a result, and how you measure success. You probably already have a list of ideas you'd like to add to the roadmap: Use data to prioritise development, addressing areas that need improvement first.
And don't forget to celebrate success, it's ok to feel good when you've made a positive impact to your company profitability. Even if you don't win the admiration of your colleagues.