Managing metrics


E-commerce businesses spend too much time analysing the wrong data and risk taking their eye off the bottom line, says Jon Woodall

The development of the web into a fully fledged competitive sales channel means businesses are constantly exploring ways to gain a commercial advantage. However, many of the metrics these businesses distract themselves with actually make little difference to revenue.

Your objectives should be the same as those of a bricks-and-mortar store. Drill down to the basics: you want to gain new customers, develop brand loyalty, grow sales and increase profit. Obsessing about your competitors and the tips and tricks offered by those considered to be market leaders can mean losing sight of your own business goals. What works for one retailer will not necessarily work for the next, so it is always important to keep your own objectives front of mind.

 Page load speed is probably the metric that e-commerce professionals become most tormented with. It is constantly measured, and under fire as a point of change for e-commerce firms, but too many managers spend their time trying to get page load speed as low as they can. This isn’t as productive as you might think. While a slow site can be hugely detrimental, it’s all relative. Aiming for around the two- to three-second mark is practical.

 Time on site and page views, while important, is far from being your main aim. A customer may visit and purchase quickly, for example, so spending copious amounts of time analysing the minutes individual customers spend on site will not get the most out of your metrics.

Likewise, if you’re targeting your PPC (pay per click) ads correctly, your ‘page views’ could be quite low. You are still driving traffic to your website, but instead of customers browsing various products and pages, they are taken directly to the right product.

 Obviously, the primary aim for all e-commerce is driving customers. If they’re not there, they can’t buy. However, it’s crucial you don’t stress and waste time over traffic volume. Think about what’s really important: you want your traffic to convert. Traffic that is outside of your target market is irrelevant if it doesn’t affect the bottom line.

The key metrics, the ones you should be measuring on a daily basis, are those that will increase conversions and boost sales. This may sound obvious, but the number of e-commerce managers who are unaware of the factors directly affecting their bottom line can be startling.

Ask yourself, how can you turn traffic into paying customers?

Interrogate cost per acquisition rates (CPAs). This will flag up which traffic-driving channels are least efficient. By scrutinising the detail of this data, you will likely identify the causes of problems and collect enough information to make the changes that will, in time, increase your turnover.

Equally, measure the number of transactions. You need to assess which web pages are affecting your conversion rates and amend the ones that aren’t. Do high bounce rates (often a key cause of a high CPA) indicate that traffic is being driven to the wrong product? Should you be pushing them to a category page or personalised page, which offers a little more choice? This can often be revealed by looking at the metrics that really matter.

It’s also crucial to examine your average order value (AOV) so you can identify the media channels that are delivering higher AOV, and then investigating how you can exploit them further.

Abandonment rate is another element that is often overlooked. If it is high, there could be something seriously wrong. You can identify ‘exit pages’ and learn which are triggers for shoppers to leave the site. By improving these pages, perhaps using multivariate testing, you should see tangible results that could potentially make a huge difference to your business.

By focusing on the metrics that matter, you could make a fundamental difference to the success of your e-commerce site, and give your overall revenue a much-needed boost.



Jon Woodall is founder of digital agency Space 48

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Jon Woodall

Jon Woodall

Jon Woodall is founder of digital agency Space 48

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