Number of visitors to a site is the first statistic that any online retailer looks at. But there are two other key statistics that are critical.
Looking at your site analytics dashboard – be it Google analytics or any other tool – can be a daunting exercise given the vast amount of data and measurements available.
There are three key statistics that should be measured regularly and are very good indicators on how well your e-commerce business is performing:
The goal for every e-commerce site is to increase online sales. So you might be asking why is sales missing from the above measures? The reason is that the combination of the above three will determine online sales. Every time a visit results to a buy, a conversion has taken place. In other words you have made a sale. The amount of that sale is determined by the Average Order Value.
When devising a marketing strategy and trying to grow online sales, these three measurements are key to understanding how different aspects of your site are performing:
The most obvious statistic to start with. Of course it all starts with getting more visitors to your site. However there are many techniques available for better targeting of your online marketing campaigns that result in more relevant traffic.
When looking at visitor numbers it is important to distinguish between visitors, visits, and page views.
A visitor is one person who can make a number of visits to a site. For example one visit in the morning and then another visit in the afternoon. During each visit that person views a number of pages which is tracked as page views. Number of pages per visit is also important when it comes to measuring user engagement.
More visitors doesn’t necessarily mean more sales. What determines sales is what percentage of your site visitors are converting to buyers.
Conversion rate is the best indicator on how well targeted your marketing campaigns are. A successful marketing campaign is targeted for the right target audience. If you have done customer profiling and understand the profile of your best customers then a marketing campaign can be targeted towards that audience. Driving more of the right visitors to your website means better conversion. Pay Per Click advertising such as Google AdWords or Facebook advertising allows targeting your ads for the right search terms or audience profile.
A visitor places an order on your site, but how large is the order? If you do a good job of cross selling, related product recommendations, and promotional offers, then the size of the orders is likely to increase. Hence this is a key statistic to keep a close eye on. Many site improvement and product placing factors can effect this figure.
Keep in mind the same customer could initiate multiple transactions; AOV determines sales per order, not sales per customer.
In general terms, AOV can help you understand whether customers tend to order more expensive or less expensive products or how many products they tend to order.
This figure can have varied importance based on the website strategy. Also the importance of the AOV can vary between first time buyers and returning customers. For example if your returning customers tend to place larger orders then it makes sense to focus on converting first time buyers on small orders.