If you are a one-person company or even part of a small team, then you could be under the impression that using analytics on your ecommerce website is a drain on one of your most-valuable resources: your time. But the reality is, investing your time to understand and maximize your results is one of the best ways to understand how your business works.
If you can’t measure something in your business, then it doesn’t exist. If you can’t prove something is not working, you can’t fix it. And, if you can’t prove something is working, you can’t take credit for it.
Data and analytics run the business world and it will be in your best interest to understand what you are looking to understand. Let’s cover off on some of the key metrics and ways to measure them in your social commerce and ecommerce campaigns.
Demographic Data (Investment)
The first step with understanding metrics is having a keen understanding of who your customers is and the type of profile you can build about them. Customer data (or demographic data) can tell you everything from age, gender, and geographic location and other information you can use to help target your message. For example, if you sell a certain type of toy for young children, your customer demographic would mostly likely be the child’s parents. It will be absolutely essential to collect this data and information because it will help you in many important ways, such as telling you who is purchasing your products, where they are located, and their demographic information. It will also help contribute to the language of your branding, copy, and overall marketing campaigns. Listening to what your customers are saying and how they are acting is the most important way to reach success using analytics.
Engagement rate is a simple metric used to measure how effective a brand or company is at engaging with their customers and audience. If you are running campaigns using Google Adwords and Facebook Ads, It can easily be used to compare how these different platforms are working for your brand. Maybe you are finding that more people will click on the ad through Adwords but aren’t sticking around, whereas those potential customers who click on the FB ad not only stick around, but are returning more often and even purchasing your products.You should probably have your analytics dashboard setup so that you can measure key events such as engagement rate. If not, doing so well help you accurately measure the type and quality of traffic coming to your ecommerce site. Maybe you are looking to reach out to a specific type of customer, but on further review, you are finding that those customers aren’t coming to your site as much as you had hoped.
Isolating specific customer segments and measuring the engagement rate with each one you are analyzing can bring to light who exactly is having a positive engagement with what you have to offer. If you feel comfortable building a custom segment, even though it is a bit more advanced, it can easily be done. Google has some great instructions here.
Measuring the Process
The Click Through Rate (CTR) is an easy way to measure how successful your advertising campaign is by measuring how a customer clicked a specific link. That link could be in an email campaign or even on a branded advertising campaign. How it works is pretty simple: the higher the clicks on a specified link, the more effective the campaign was at getting people to the destination. The CTR also measures the number of customers who were reached, clicked the link and redirected them to the destination page where they can learn more about your products or services and, ultimately, make a purchase. This action is known as a conversion, which can more broadly be defined as a percentage of users who take a defined action, which, in this case, is a purchase.
Finally, if you are able to reach out to the best potential customers, what happens if they don’t make it through the final step which is making a purchase? The term for this is the ‘shopping cart abandonment rate’ and it happens more often with ecommerce sites than brick and mortar stores. For example, if you see that 10,000 people loaded a basket, but only 2,500 made a purchase, your abandonment rate is 75% (7,500 / 10,000 = 0.75). The typical abandonment rate is between 60% – 80% for ecommerce sites. All of these measurements are great tools in the toolbox. If you don’t know them now, be sure to learn them.
Setting up your toolbox
Being able to collect and analyze the data from the various sources you are sharing content is the next step in improving your conversions. Google Analytics is the first platform that should be learned as it is essential to understanding how people are interacting with your site, how much time they are spending there and if they are purchasing anything. There is an easy-to-use tutorial here. Also, both Facebook and Twitter have powerful tools to analyze what your customers are doing. You can learn more about Facebook here and Twitter here.
Understanding how to read basic metrics from sites like Google Analytics, Facebook Ads, and Twitter Analytics are essential for running your ecommerce business successfully. Without all of these tools, you will be essentially shooting at a target blindfolded. Although it may take some time to understand how these tools work, learning them is absolutely one of the best strategies you can utilize to effectively run your social commerce business.
In my next post on analytics, I will go over best practices for using the Shoppost dashboard so you can easily rule the social commerce kingdom and if you’re ready to experience Shoppost, sign up now!