This quick guide is aimed at online retailers running their marketing programs in-house who need some guidance on how best to go about it and what to look at to identify performance improvements. It assumes you have 12 months trading history for comparison purposes, but can equally apply when starting up in terms of the process it follows.
1. Create A Business Scorecard
It's important to keep a scorecard of your key metrics and year-on-year benchmarks which analyse your traffic, revenues, order volumes, average order values, ROI and sales conversion rates through your different channels and devices such as desktops, tablets and mobiles.
Channels are the different ways that traffic reaches your website and each one will usually have their own campaign associated to them, which you can measure via Google Analytics:
- Impressions (i.e. number of times your site has appeared on Google search pages)
- Direct to the site (campaigns include mailers, handing out business cards, direct mail, bookmarking)
- Via organic listings (run content optimisation campaigns to achieve better listing positions)
- Click-throughs from email campaigns (send regular and relevant emails to buyers without flooding them)
- From paid advertising such as Product Listing Ads, retargeting, display ads etc (run campaigns for each ad type)
- From social sites like Facebook and Twitter (assign a person to manage your social campaigns)
- Via referrers such as links in forums and blogs serving your niche (run PR campaigns to build trusted links via outreach programs)
Important: Use Google Analytics to get your traffic figures but take your sales revenues from REC because they are accurate whereas Google analytics won't include returns / cancelled and manual orders and sometimes fails to attribute an order correctly in its stats.
Multi Channel Conversion Overlap
Use Google Analytics to understand how channels overlap in the conversion process so you have a more rounded view of how a channel which may have a lower ROI is in fact assisting the sale in another channel and is therefore contributing more than the straight channel analysis shows.
Check through your transactions to understand changes in order volumes, average order value changes by channel (especially useful when running campaigns targeted within channels, such as PPC or social) and unusually large orders that occurred in the same period in the previous year that may be absent in this period and need to be followed up. On that point, it's also important to look ahead to the next month to see what orders came in during the same period last year and then reach out to those buyers in advance. Note, that I suggest looking at the previous year, but if your business has a different repeat buying cycle, for example people tend to make purchases every 3 months, then analyse against your cycle period instead.
Top Customers Analysis
Analyse your top customers this year and in the previous buying cycle to identify those who have stopped buying and contact them, plus to engage with your new top buyers and understand their full sales potential. Use Prospect Manager to record your sales contacts, funnel and conversion.
Product Group Analysis
Check which products and groups of products are selling better or worse this period compared to your previous buying cycle period. Identify the reasons for the change and take corrective action.
Collect feedback from your site's product reviews, 3rd party reviews, thanks page feedback and surveys. Then look at competitor's feedback on their site or via 3rd party reviews. Summarise this and identify improvements and opportunities you can implement.
Tip: Measure Accurately With Like-for-like Comparison
It's important to check your figures in the correct way, otherwise you can get a false picture. Always analyse your year-on-year activity for the exact same "like-for-like" sales period as last year, i.e. starting and ending on the same days of the week. This gives you a fair comparison period rather than looking at a previous month or quarter which could've included something that distorts the picture, for example Black Friday sales.
Once you have this set up you can then keep track of your key performance metrics by adding them each month.
2. Know What To Expect In Terms Of Conversion & Abandonment
It helps to understand what to expect in terms of conversion. Research tells us that conversion rates for smaller retailers are typically in the 1% - 3% range, pushing up to an almighty 5% for highly established retailers running a comprehensive set of marketing programs targeting existing as well as new clients.
How Many People Abandon & Why?
Research tells us that on average, of those people who add products into their basket, 77% then abandon without buying, with expensive
shipping being identified as the top factor, followed by a large percentage who are just browsing or doing research ahead of a purchase:
Conversion Funnel Analysis
Analyse your conversion funnel to see where visitors are abandoning your checkout process and work on initiatives to improve your funnel and campaigns driving visitors into it. For example, have you performed user testing on the checkout process? Is your latest design change browser tested? Are you driving in the right type of visitor via your campaign changes?
Monitor your social campaigns for traffic, shares and mentions and measure the ROI to ensure the time expended is worthwhile compared to other campaign types, especially well-tuned PPC .
3. Set Up A Marketing Diary
It's easy to forget what we did a year ago, so make sure you keep a marketing diary with the significant changes you made to your marketing, catalog and website. You can annotate your balanced scorecard with your marketing activities to identify trends, plus calculate income and expenditure plus return on investment (ROI).
Record Changes In Your Normal Day-To-Day Retailing Operation
Once you have your benchmark data, factor in what sales and marketing activities you did at the same time as last year which might've made a difference:
- Did you change your paid advertising campaigns?
- Did you send out more or less email campaigns?
- Did you run more or less promotions?
- Did you offer out more or less coupons?
- Did you change your delivery services
- Did you change your payment methods?
- Have you added / removed popular products or ranges?
- Did your pricing change significantly?
- Did your product catalog size change significantly?
- Have you started targeting a different type of buyer (e.g. less B2B and more consumers?)
- Have you been marketing to a different channel (e.g. through social media)
- Which channels and campaigns have seen most change in Return On Investment (ROI)?
- Are you getting more or less positive reviews, complaints and returns?
- Has your average order value changed?
- Has your order volume changed?
Tip: The last point is especially important to make sure your efforts only go into activities which give you back the best profit.
Check External Factors
There could be other factors at play which are outside of your normal day-to-day merchandising:
- Did the economy change significantly?
- Did your sector face a downturn?
- Has international trade been affected by foreign currency volatility?
- Are you still competing against the same competitors or have new ones appeared?
- Have any of your competitors increased their marketing programs?
- Are your suppliers starting to compete against you?
- Have new suppliers entered the market?
- Are the major supermarkets now selling your products?
4. Check Pricing Regularly
Being over-priced is normally a major culprit for losing sales on price-sensitive products, so you will need to price check regularly for:
- Your product pricing - how do you stack up against your competitors on main price, options, special prices and quantity break prices?
- Who's running promotions? Check if competitors are running special promotions or campaigns
- Check if your distributors have changed their prices and are running promotions
- Check if your supplier is running their own promotions which are under-cutting you
5. Check Delivery Services Are Fair & Competitive
As we saw in the last illustration, delivery is an area which causes a lot of abandonment. Buyers expect fair delivery services and charges, with many retailers offering ways to qualify for free delivery. Start by checking:
- Delivery charges - do you offer at least the same-priced delivery as your main competitors?
- Delivery services - do you offer the same services as others? How about fast track delivery for urgent purchases at busy periods?
- Delivery times - Is it clear how long you take to deliver? Do you have text describing your services, either on your product pages or on it's own page?
- Can buyers return goods easily? Make sure your returns and refunds policies can be found easily and that your terms are on the site.
6. Perform Regular Website Checks
Aside from keeping a regular eye on your analytics, here's the essentials you should check for your website:
- Search Console - Google's handy tool to help check the health of your site; be sure to record indexed pages, errors and crawl issues in your scorecard.
- HTTPS mixed content issues - use our HTTPS Checker tools to identify and monitor your site for mixed content issues once your site has an SSL certificate.
- Google Merchant Centre feed - check this daily if you are using product listing ads to ensure your products have been accepted into the feed.
- If you think there is an issue stopping people placing orders on your site, put test orders through using different browsers (via a tool like Browserstack).
Tip: Make sure you have reminders set up for when your domain name and SSL certificate need to be renewed.
7. Review Your Performance Regularly
Each month, update your balanced scorecard with your sales and costs and then review what was most effective in generating the best profit. Add in your website monitoring stats for a complete picture too. Review what marketing activities took place this month versus the period last year to identify any changes that may have affected performance. Write up a list of actions and timescales that need be taken and ensure these are actioned and reviewed at the next meeting too.
Some key things you will wish to ask yourself include:
- Which channel makes the most profit for the business and is it rising or falling in a predictable and managed way?
- Which campaigns are most profitable and am I spending my time and money in the right place?
- Am I getting more or less orders and how has this affected my average order value? Was this planned? Am I giving too much away in promotional pricing?
- What is driving growth in my visitors, revenues and profit and how do I do more of it?
- What initiatives have I undertaken which could explain a change in results?
- What risks can I foresee in the near future and what can I do about them?
Bonus Tip: Conversion Optimisation
Use our 50+ conversion optimisation hints and tips to improve your sales conversion rate.