Track The Success of Your Company with 4 Essential Metrics
When 2016 began, the internet was flooded with tech predictions. Each prediction arose by tracking the history and developmental pattern of the technology. Tracking has arisen as a major unit for measuring the development of applications, services and technological products, in general. Consider Toggl, a time management app which can track your productivity levels and tell you how to improve your efficiency. Apart from logging your work hours, you can also make a task list along with visual reports that tell you where you are using up your time the most. As with our individual lives, enterprises can also track their working pattern and realize where they need to put in the effort to increase productivity and revenue. This influential habit has been part of lives of giant industries like eBay, Amazon and Target.
Once you have entered the age of Big Data (that began in its full swing last year), there is no dearth of information in the company’s hands. What is significant is how this information is translated into insights which can consequently nurture the company’s future. This translation occurs when you can answer the following questions accurately: What is the current state of your company? Which areas are lagging? How can positive changes be brought about in these areas? The answer to the first question lies with tracking tools. You need to know what you must measure to see the current state of your company. Once you have these measurements with you, you can decide how you wish to utilize them for bringing about changes. Here are four metrics which will tell you the health of your company:
- Conversion Rate (CR)
When your site begins getting traffic, you will be able to check the number of visitors who are buying. Conversion rate tells us the number of visitors who are turning into our buyers. The greater the conversion rate, the better it is. For instance, if your conversion rate is 3%, then 3 of 100 visitors are becoming store buyers.
Beginning with doing A/B (aka Split) testing, you should set up a value proposition (Answering the question, “Why would someone buy from your store?” and not only “What will they buy?”). Move on to setting up a sales funnel where you can psychologically incline your visitors to buy the product.
Make sure you do not dip into excessive technicals which could put off the customer from reading more than a sentence on your page. Set up a blog and hire a content writer who can portray your product as an essential without sounding like a sales pitch. You also need to keep track of comments and provide satisfactory feedback. Provide reviews which reveal the trustworthiness of your company and also eliminate anything that could distract the visitors (like a humungous menu bar, unrequired images).
- Average Order Value (AOV)
In order to get an idea of how much revenue you can produce, you need to know how much every order is bringing in. This will be the average size of your shopping cart. Your company is progressing when this measurement increases. For instance, your AOV is $82 per order if it receives $246 from three orders. The AOV will be on the higher scale provided there are at least a few high-value orders.
You can increase the Average Order Value by setting up free shipping points (with offers like: “Free shipping when you spend $35). Providing discounts once a minimum amount of purchase is made will also help significantly. Apart from putting up a limited-period offer, you can also experiment with bulk-buy discounts and cross-selling options.
- Shopping Cart Abandonment Rate
If you track the lifeline of a buy, you will witness the psychology behind purchase. Shifting from a visitor to a buyer is a long process which is mediated by multiple pit stops at different online stores. Every store where they did not buy consisted of the potential shopping cart abandonment factors. You need to find out what could be putting off your customers from turning the Wish List into a Buy List.
Remember that when visitors browse, they are not necessarily ready to buy. They might be simply collecting options and checking out the alternatives. At this point, your main objective is to create an impression of your store on the customer’s mind, subliminally attracting them to your page when they actually reach the point of purchase.
To reduce the rate of shopping cart abandonment, begin by removing any compulsory registrations and pitch in prominent trust-seals. Also cut out any unnecessary fields in the checkout page, eliminate distractions with the addition of a chat widget. Make sure you mention the estimated shipping date and keep space for any special instructions.
- Cost Per Acquisition (CPA)
Calculate the total amount spent on marketing for a particular channel over a certain timespan. Divide this value by the number of customers you have gained on that channel during the same time span. This will bring you to the cost per acquisition. For instance, if you spent $250 on Google AdWords and acquired 12 customers through that channel, then your CPA would be $20.84 per customer for that AdWords channel.
You can increase your CPA through many ways. Once you have established your site, ask your users to share a URL on FB or other strong social networks and invite a friend while signing up. You can also set up incentives of this form: higher the number of friend sign-ups, the more gifts they receive. If you are running a shoe store online, you could give store coupons or a sample product to them after they got a certain number of friends to sign up.
While analysing your CPA, check out which of your products is receiving the best response and which of the products is trending through social media the most. Keep an eye on whether the advertisements are leading customers to the target page and also that the products displayed on your welcome page are in sync with your demo. Keeping a track of these factors will allow you to be focused in your approach starting with establishment of unique tracking URLs, positioning the best products on home page and provision of offer codes.