Selling things online has never been both easier and harder.
On one hand, you have platforms like Amazon, eBay, and Etsy, all of which have lowered the barrier to entry for aspiring online merchants.
On the other hand, succeeding as an online store operator means having to track a lot of data, which is much easier said than done.
The most successful ecommerce businesses are the ones that can harness metrics to make informed decisions.
These metrics, in turn, tell you everything you need to know about your store’s performance, from the number of sales by day, week, and month, to the average value of all items purchased at any given time.
This, however, doesn’t mean that you should be tracking and optimizing every metric at your disposable. The key is to know the metrics that make the biggest impact on your ecommerce venture.
To point you in the right direction, here’s a list of the seven most important ecommerce metrics you should be tracking and optimizing today.
1. Sales Conversion Rate
Your ecommerce sales conversion rate is, simply put, the percentage of people who visit your online store or page who make a purchase.
To calculate your conversion rate, use the following formula:
So, if 1,000 people visited your store this week and only 10 people made a purchase, your conversion rate for the week would be 1%.
Obviously, you’d want as high a conversion rate as possible.
But the truth is that the average ecommerce conversion rate in the U.S. is much lower than you think – between 2% and 3%.
According to WordStream, however, you might fair better with Google Shopping Ads.
Now for the big question: How can I improve my conversion rate?
This is a huge topic in itself, but a few things you can try include:
Speeding up your product pages.
Upload high-quality images of your products
Optimize product listings using keywords
2. Website Traffic
Once you’ve tracked and optimized your conversion rate, you can then look at bringing more people to your ecommerce store.
This is where measuring website traffic comes in.
Let’s go back to your conversion rate of 1%, or 10 purchases for every 1,000 visits. After optimization, let’s suppose this rate increased to 5% – 50 sales for every 1,000 visitors.
We can then infer that if you were to get 10,000 people to visit your site, you would also multiple your sales tenfold.
This isn’t a guarantee, of course, but it’s nevertheless important to ensure that people know your online store or page exists to maximize your likelihood of generating more sales.
To grow your website traffic, you can:
Promote your offerings on social media.
Optimize your site/store for search engines.
Grow the number of people subscribing to your newsletter.
3. Email Opt-in Rate
Even in today’s social media age, email marketing continues to be one of the most important tools for ecommerce, particularly when it comes to remarketing and generating repeat business.
According to Campaign Monitor, email marketing delivered an ROI of 4400% in 2016 and their 2018 annual report revealed 59% of marketers believe email delivers the highest ROI of all marketing channels:
Similar to website traffic, the idea is to get as many people on your email list, even if they don’t necessarily purchase your products right away.
But unlike ordinary website/page visitors, people who sign up to your newsletter care enough about your brand to get updates on your products and services. This means they are also more likely to become paying customers in the near future.
One way to get people to subscribe to your emails is to offer something of value in exchange for your audience’s email addresses and contact information.
For example, you can offer an exclusive deal (e.g., a voucher or code) to first-time subscribers on their next purchase.
4. Customer Lifetime Value
Customer lifetime value (CLV) measures the total amount of what you earn from an average customer over their lifetime.
For example, if a typical customer makes six transactions, each one worth $30, throughout their life, your CLV would be $180. Note that you still have to deduct your acquisition costs from this number, which brings us to the next point.
Your CLV is important because it serves as a benchmark for how much you can spend to acquire customers and the lengths you should go to keep them.
To increase your online store’s CLV, you can work on improving your average order value (more on this later) and engendering loyalty among your existing customers so they become repeat buyers.
5. Average Order Value
Obviously, you want your customers to spend as much as possible on your online store.
As the name suggests, your average order value refers to the average value of each purchase made in your store.
To calculate yours, simply divide the sum value of all sales by the number of carts.
Tracking your average order value allows you to set benchmarks and figure out how to get people to spend more on every purchase they make.
Here are a few ways to drive this metric up:
Upsell your customers complementary items that improve the usability of their primary purchase.
Offer products as a package so customers get a small discount on each item as opposed to buying them separately.
Offer free shipping on purchases above a certain threshold to entice customers to maximize their spending.
6. Customer Acquisition Cost
While growing your customer base is obviously important, it’s also just half of the equation.
If you’re spending an average of $30 to acquire every customer but your average order value is only $25, that means your business is still operating at a loss.
This is where measuring your Customer Acquisition Cost (CAC) comes in.
Your CAC tracks the average cost of gaining one customer, including everything from marketing and sales costs to the cost of paying your staff and hosting your site.
This will give you an overall figure, but you can also calculate your CAC by source (e.g. different traffic channels like search engines, social media, or email list).
To bring down your CAC, you can:
Improve your conversion rate.
Optimize your advertising to spend less for every acquired customer.
Invest in free/organic marketing like SEO and social media marketing.
Invest in referral marketing to encourage existing customers to bring in new customers.
7. Shopping Cart Abandonment Rate
This metric refers to the percentage of shoppers who add products to their cart but ultimately leave your store without completing the purchase.
These are window shoppers who are considering a purchase but haven’t quite made up their mind just yet.
Shopping cart abandonment is more common than you think. According to Barilliance, around 78% of shoppers abandon their carts.
This figure, however, can vary between industries. General retail, for example, has an abandonment rate of 72.8%, while fashion has 68.3%.
But even if your abandonment rate is roughly equal to these benchmarks, it’s still a good idea to do everything you can to bring it down.
Simplify the shopping experience, particularly the checkout process, so customers can shop smoothly.
Use remarketing to bring undecided shoppers back to your store. This can include targeted ads and follow-up emails.
Although this list of ecommerce metrics is by no means exhaustive, it’s at least a good starting point for any online store.
If you have a smaller online enterprise, you can start with primary metrics like average order value, customer lifetime value, and conversion rate.
As your store grows and gets more orders, your data points will also increase in number, giving you more data to track, measure, and improve.
And when you work on improving one metric, you’ll find that this leads to ripple effects on other metrics – for example, improving AOV helps you outpace your CAC.
Ultimately, tracking these metrics will help you make the best decisions for your ecommerce site.
In-post Image #1: Screenshot taken by the author, September 2019 In-post Image #2: WordStream In-post Image #3: Campaign Monitor In-post Image #4: Red Rocket Blog In-post Image #5: Yotpo In-post Image #6: Barilliance
Yoast has released version 12.1 of its WordPress plugin; the update adds your custom favicon to the mobile snippet preview, matches Google’s font sizes on desktop search results and introduces new schema filters.
Why we should care
An accurate preview of your mobile and desktop listings enables you to get a better idea of what your customers see before they click through, which may help you optimize your snippets and encourage them to click on your results.
The new filters introduced in this update can also be used to control your schema output and provide searchers with pertinent information about your brand.
More on the announcement
Yoast 12.1 also adds the following filters for more granular control over schema output:
wpseo_schema_organization_social_profiles filters an entity’s social profiles. You can use it to customize social profiles within the Organization schema object.
wpseo_schema_company_name and wpseo_schema_company_logo_id filter your company’s name and logo from the theme options if it hasn’t been designated in Yoast SEO’s settings.
wpseo_enable_structured_data_blocks disables Yoast’s structured data block editor blocks.
For more on Yoast’s structured data implementation updates, check out our coverage on Yoast SEO 11.0 (general schema implementation), 11.1 (images and video structured data), 11.2 (custom schema), 11.3 (personal image and avatar structured data), 11.4 (FAQ structured data), 11.5 (mobile snippet preview) and 11.6 (updated How-to structured data block).
About The Author
George Nguyen is an Associate Editor at Third Door Media. His background is in content marketing, journalism, and storytelling.
Google announced an update to Reviews Rich Results. The goal is to improve the Reviews Rich Results for users and to “address” abusive implementation and impose limits to where rich results trigger. Additionally,the “name” property becomes required.
Reviews Rich Results
The reviews rich results are explained in Google’s Review Snippet developer page. Google takes your schema structured data related to reviews and show stars in the search results.
The rich snippets developer page states:
“Review snippets may appear in rich results or Google Knowledge Panels.”
It’s the guidelines on their appearance in the rich results that is affected.
Limits Imposed on When Rich Results Reviews are Shown
Google announced that the display of rich results reviews will be limited. This means that any reviews outside of those limits will no longer show review snippets.
These are the allowed schema types:
Self-serving Reviews Not Allowed
Self-serving reviews are reviews of oneself. Google will no longer display self-serving reviews in the featured snippets.
This is how Google explained it:
“We call reviews “self-serving” when a review about entity A is placed on the website of entity A – either directly in their markup or via an embedded 3rd party widget. “
“name” Property is Now Required
In perhaps the biggest change to Reviews Rich Results is the mandatory requirement of the name property in the featured snippets.
Publishers who rely on schema structured data plugins, including Reviews WordPress Plugins, should check if their plugin is currently including the “name” property.
If the name property is not included with your plugin then look for an update to your plugin and update it. If there is no “name” update then it may be something your plugin maker has in a future update.
You may wish to contact your plugin maker to find out when this is coming because the “name” property is now important.
Will Rich Results Disappear if “name” Property Missing?
Google did not say if failure to have the “name” property in the structured data will result in a loss of the Reviews Rich Result. They only said it’s required.
“With this update, the name property is now required, so you’ll want to make sure that you specify the name of the item that’s being reviewed.”
This is an important update for publishers who use reviews structured data. Make sure your structured data is properly updated in order to continue to show rich results for your structured data.
Google’s news Tuesday that it is treating the nofollow attribute as a “hint” for ranking rather than a directive to ignore a link, and the introduction of rel="sponsored"andrel="ugc" raised reactions and questions from SEOs about next steps and the impact of the change to a nearly 15-year-old link attribute.
Choices for choice sake?
It’s useful if you want a choice to be more granular. You didn’t have that before. Now you do. If you want it.
As Google Search Liaison Danny Sullivan stated in a tweet Tuesday, the announcement expands the options for site owners and SEOs to specify the nature of a link beyond the singular nofollow attribute. The additional sponsored and ugc attributes are aimed at giving Google more granular signals about the nature of link content.
As a point of clarification, Google’s Gary Illyes tweeted that nofollow in meta robots will also be treated as a “hint,” but there are no ugc or sponsored robot meta tags. He also stated that he’ll be updating the official documentation to explicitly reflect this.
There is no real benefit for the sites that implement these new attributes instead of nofollow, other than organizational classification if it’s helpful. That has some viewing it through a lens of skepticism.
I want to believe this. It’s just that I don’t recall Google ever coming out with anything that did not have a direct benefit, or apparent hopeful benefit for Google’s own internal goals.
Drawing the focus back to that the key change that nofollow is now a ranking “hint,” not a directive, Sullivan tweeted, “As Gary says, that’s very helpful to our systems that impact *lots* of people. The new attributes are a minor aspect.”
That was in reference to Illyes earlier tweet that the treatment of nofollow could have a “massive impact on the end user.”
This has the potential to have a massive impact on the end user. While SEOs implement the nofollow, the outcomes of it trickle down to ranking, which directly affects end users.
It can be hard to reconcile hearing that the change could mean significant improvements in search results for users while also being told that most sites won’t see any ranking affect from the new nofollow treatment.
According to the announcement, these changes have already taken effect (save for nofollow being used as a crawling and indexing “hint,” which goes into effect in March 2020). “In most cases, the move to a hint model won’t change the nature of how we treat such links,” Sullivan and Illyes wrote in the announcement. “We’ll generally treat them as we did with nofollow before and not consider them for ranking purposes.”
Who benefits from the new attributes?
Implementing the more granular sponsored andugc attributes is optional, and Google clearly stated there is no need for SEOs to go back and update any existing nofollows. So will site owners adopt the new attributes if they don’t have to?
But if no one is clear on the incentive to implement….they won’t.
As Sullivan has stated, the purpose of them is to provide options to help it classify these kinds of links more clearly. The nuances Google looks at between nofollow,sponsoredand ugc attributes won’t have an impact on your own site and the new attributes are voluntary to implement. “If you do want to help us understand the web better, implement them. If you don’t want to, don’t,” tweeted Illyes.
Making the new attributes voluntary means you don’t have to bang down IT’s door, but it could also mean the change request may fall to the bottom of the priority list for a lot of companies and never get implemented. As consultant Kristine Schachinger expressed in the tweet below, even the slightest SEO change can be hard to get implemented.
Do you really think we are going to get dev teams to start doing this, or content teams? We can hardly get them to write a title or description? What happens if we just ignore this? Seriously asking since no one is going to do this.
Google seems very clearly fine with that. At this stage, the actual work involved should be minimal. If your dev teams can’t implement a code change to incorporate ugc or sponsored attributes for several more sprints, or quarters (and you’ve been implementing nofollow when appropriate), you don’t have to fret.
For WordPress sites, Yoast SEO plugin founder and Chief Product Officer Joost de Valk said Tuesday that support will be coming in the next release.
“It’s quite easy,” said de Valk. If other vendors follow suit, it could speed up adoption of the new attributes.
An opportunity for manipulation?
Now that nofollow is a “hint,” some are also concerned about spammers that might want to test out whether their tactics have a new lease on life.
I’m sure this is well tested and has prob been live for like a year now without anyone noticing. It’s one of those things you prob should of not announced though – it’s going to create a plague of comment spam for blog owners now because ‘hey, nofollow links might work’.
Google says this shouldn’t spur spammers because most links will still be ignored just as before, whether they use the nofollow, ugc or sponsored attributes. Further, given that one of the stated reasons Google made the change to consider nofollow a “hint” is to be able to better understand link schemes, this spam tactic could be more risky than before.
This change should not have you overhauling your nofollow strategy. If you publish sponsored content or host forums or comments on your site, consider implementing the new attributes when you are able to make a code change. If you can’t or just don’t want to, there’s no harm in that either.
“On the surface, this only benefits Google,” Chris Silver Smith, president of Argent Media, commented via Facebook. “But, if you read between the lines, ‘hints’ mean a passing of PageRank or equivalent values. They’re already using Nofollowed links in some cases. They just want it easier to choose between links to use now in more cases.”
About The Author
George Nguyen is an Associate Editor at Third Door Media. His background is in content marketing, journalism, and storytelling.