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Evaluate your e-commerce Website with Simple Metrics
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It is true that you cannot manage your e-commerce website unless you are measuring its effectiveness at regular period. The very first step in this regard is to get a breakdown of the traffic by using some form of analytics. Candid has an extensive experience and sound knowledge of e-commerce sites & suggests clients to use Google Analytics to evaluate their site's performance.
When you are tracking the numbers on your website, you will still need to do some calculation to know how it's performing. Follow these four basic methods that are highly helpful for e-commerce websites:
Conversion Rate
When a person visits your site and does what you want him to do, this is called conversion. It could be anything from making a purchase to leaving a comment in the section.
Identify the goal pages in Google Analytics to track your total conversion rate. You can make the thank you page as your goal that will come after somebody places an order.
The next step is to divide the total conversions by the number of visitors. You can see the total traffic in numerous ways. The highest result would be achieved by considering page views but this is least accurate because the same visitor can see other pages also.
You can also consider the total visits, which tells the number of people who visited your site including the visitors who returned again. An absolute unique visitors option is also present, where you won't get the record of people visiting the page for the second or more time.
It is better to consider visits for getting accurate conversion rate because it is more conservative and accurate measure for the calculation.
The formula for finding out conversion rate is:
Conversion Rate = Total Conversions/Visits
Cost per Conversion
If you have a high conversion rate, it doesn't mean you are doing a good business. Cost per Conversion is a more accurate way of judgment. You can calculate Cost per Conversion by:
Cost per Conversion = Monthly Website Expenses/Total Conversions
Do not forget to consider all the costs of your website including web design and development, SEO, online marketing, web hosting, PPC, blog writing and more.
Suppose you are spending $1,817 per month and the number of conversions in the month are 50. Then you Cost per Conversion would be $36.34.
If you are making more than $36.34 on every conversion, you are getting benefited.
Average Profit per Conversion
If you know your average profit or loss on every conversion, it will help you in making a budget and planning for future. You can also set online sales goals after knowing this. The formula is:
(Gross Revenue from Website – Total Costs)/Total Conversions = Average Profit per Conversion
The total costs should include all the costs apart from web costs.
Abandonment Rate
It describes the number of people who started to convert on your website and dropped out later. If the rate is high, it means the site is inefficient or you have to check out the conversion process. Abandonment rate is calculated by:
(Number of Visits to the Conversion Page – Number of Visits to the Goal Page)/Number of Visits to the Conversion Page
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Posted by Navneet Kaushal on Jul 30 2009 under Ecommerce Trail |
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February 27th, 2010 at 1:43 pm
The goal is to compare the feature contribution to the site’s success to help optimize site design and future feature investment – build more features like which of the existing features and remove what features on the site.
March 3rd, 2010 at 7:38 pm
gr8, I also like http://www.wework4web.com for cool web development and design services
June 3rd, 2010 at 4:42 pm
he exact metrics you focus on will vary according to your business. A site selling hard goods may find their key metrics are different from a company selling subscriptions, for instance.
June 12th, 2010 at 12:50 am
Admiring the time and effort you put into your blog and detailed information you offer! I didn't know that!
June 12th, 2010 at 5:17 pm
the hottest, and most hyped web development framework. The Rails framework includes tight integration with the Prototype and Scriptaculous JavaScript libraries. With the addition of Prototype and Scriptaculous as a backend choice for the Ext JavaScript library, the integration of Ext with Rails has become much easier to accomplish, with less overall included code.
June 24th, 2010 at 9:13 pm
The real problem arises when website owners never look beyond these simple metrics. Relying and optimizing website around these metrics is a serious error. What you indeed need to optimize should be something I call visitor lifetime value.
July 22nd, 2010 at 5:42 pm
How long have you been in this field? Certainly, you know a lot more than I do, I would love to know your sources!
July 28th, 2010 at 6:29 pm
Is bounce rate ever segmented for new visitors? I think that would also be more telling than simply the bounce rate for all visitors (isn't the bounce rate for a blog pretty high b/c many people come back just to check if there's new content on the blog, yet?).
August 4th, 2010 at 10:43 am
Wow, I can imagine how you did it. But, I appreciate for your brave. Good luck!
August 20th, 2010 at 3:23 pm
Resources like the one you mentioned here will be very useful to me! I will post a link to this page on my blog. I am sure my visitors will find that very useful.