The ecommerce economy has seen significant growth in recent years and that is set to continue throughout 2017. The opportunity for success within the ecommerce world is intriguing and promising which explains why more and more people are combining traditional business methods with new technology, through an e-commerce channel. The concept of ecommerce is simple, it allows online stores to sell physical goods without actually managing a store front. Whilst within the ecommerce economy there has been a forecast for rapid growth, you must remember that you can only expect to see results if you take the right approach and measure your success. This article will explain some of the different methods of measurement when it comes to ecommerce success, as well as how you can take full advantage of your online presence and win over customers.
Ecommerce success metrics for your business.
When managing an online store your revenue will be generated through selling products or services, as well as any ad impressions and if you choose to adopt exclusive membership fees. Whilst the ecommerce market is growing, the industry faces intense competition between organisations where profit margins are often thin and when it comes to newer businesses, there are very high failure rates. It’s important to measure your level of success every step of the way, 3 ways of doing so include looking at conversion rate, customer loyalty and acquisition cost.
1. Conversion Rate
For anyone that isn’t familiar with what a conversion rate is, in short, it is the percentage of visitors to your site that complete a transaction. This definition makes it an obvious metric for determining whether your ecommerce site is running successfully. What most people don’t know about a conversion rate is that they are often quite low; statistically, it can be predicted that around 2-3% of visitors will end up making a purchase from your site which leaves a majority of potential customers just browsing and leaving your site without buying anything. Some visitors fail to reach a product page whereas others get as far as putting items into their basket and even putting their delivery details in, but end up pulling the plug on purchasing before confirming the order.
Some of the challenges that arise which influence a customer leaving the purchasing journey include:
> Not being able to find the desired product
> Not being happy with the amount of information available on the product
> Feeling uncomfortable with the amount of personal information required
> Discouraged by the shipping costs
> Any technical issues
2. Acquisition Cost
Acquisition Cost determines the cost of acquiring a new customer, inclusive of all the costs associated with promoting a product/service or using a salesperson. Before you start seeing a conversion rate, you need to think about getting people onto your site in the first place. Big brands don’t necessarily need to worry about this as they generate direct traffic naturally for the simple fact that they’re more commonly recognised, this includes brands such as Amazon and ASOS. If you’re a new business without an existing customer base then you have to look into attracting customers through paid means. Many ecommerce sites rely on paid traffic for efficiency however with the growing competition in many ecommerce categories, it’s hard to obtain cheap Pay-Per-Click (PPC) traffic. Doing a random Google search will show you how many ads there may be for one single product type, look at this one for example:
It is common for ecommerce sites to spend a lot of time on deciding what the best way to buy affordable traffic is because if your conversion rate is showing you that around 97% of visitors are leaving your site without making a purchase, you don’t want to be spending much to get them there in the first place.
3. Customer Loyalty
Getting people to your site is a tough job and takes a lot of work and whilst attracting a high level of visitors is ideal, it’s almost important to try and repeat business and retain customers. You want to create an online store where customers don’t just purchase once but they return again and again to shop with you; if shoppers have a good experience on your site then they’ll stay loyal. Monitoring and maximising this factor, requires tracking visitors with the desire to retarget them at a later date. You can do this by dropping a cookie on the machines of your visitors which will hold ads at a later date; in turn this can also serve as an effective way to keep acquisition costs down.
Enhance your ecommerce site to win over customers.
It’s one thing getting an ecommerce site live and ready to take orders but it’s another thing getting your to part ways with their money. You can’t just add products to your site and expect customers to put their trust in you and spend money with your business. For that reason, you should do everything you can to enhance your online store and make it as approachable as possible. As consumers, we can agree in saying that if a site looks unreliable then we are less inclined to spend money on it due to the fear of losing our money. The following factors will enhance your ecommerce site: credibility/being trustworthy, creating helpful and relevant product descriptions and reviews.
Very few ecommerce sites run without ensuring the following but it’s important to mention it regardless; you need to make sure you have an SSL certificate and serve your pages via https, this is a crucial step in creating an ecommerce site. Without doing so, Google are unlikely to rank your site because you’re not promising visitors a secure transmission of private and financial information. If a site visitor gets the impression that your site isn’t trust worthy then the truth is, they won’t be spending their money on your product/service. A good tip is, to clearly display what security steps you take in order to protect your customers against theft and fraud.
2. Helpful and Relevant Product Descriptions
Images are great for visually selling a product but when it comes to ecommerce, they won’t do the magic that words can do. Many online stores adopt stock images and descriptions in a bid to generate sales but more than likely, these products won’t sell as many compared to a product with a carefully considered description would. Originality is key in the competitive world of ecommerce so it’s vital that you don’t forget that when writing the content for your products. Not only will it be good for making you stand out from the crowd but you should also note that Google will not favour your product in terms of ranking if it sees duplicated content. Ultimately, consumers want great products at the lowest price so when it comes to selling something that 100 other competitors are doing, differentiate yourself and go the extra mile; write captions for humans not robots, video a live demo of your product and take professional photos. See this example from Kate Spade (www.katespade.co.uk), a designer brand selling fashionable garments and accessories. The products benefit from great professionally shot photos and a unique brand tone in their descriptions, which makes them stand out from other competitors:
You might not think much of them but they are your online store’s digital word of mouth and the most powerful and effective way you can tell potential customers that you are in fact a reputable business. Allowing other people to endorse you through the method of reviews is a key step of setting up your ecommerce site and you should make sure it is easy for a customer to leave a review on your site. Customers trust other customers more than they’d trust the brand trying to sell them something and whilst it is unfortunate, it is the truth. Fortunately, businesses have the opportunity to reply to reviews so even in circumstances where the review is negative, you can attempt to rectify the issue accordingly.