Monitor All Metrics – Even the Small Ones
There are a ton of e-commerce marketing metrics that you’re constantly forced to pay attention to when it comes to your health brand. With the big players like click-through rate (CTR), return on advertising spending (ROAS), and average order value (AOV) taking up so much space, it’s easy to let something like the speed of a page load slip through the cracks.
But take this Google search engine study into account. In an experiment where Google intentionally slowed down their search page results to monitor the effect on users, they discovered that searches went down 0.2 to 0.6% for changes that were under half a second. They also discovered that the cost of slower performance increased over time.
These might seem like insignificant numbers, but it’s estimated that Google is used for about 5.8 billion searches a day, which would mean a drop of up to 34.8 million searches. When it comes to the e-commerce of your health brand, think of small optimizations like a dripping faucet. When not monitored, it may only seem like a small amount of water being lost every day, but how long would it take to fill up the sink if you put the plug down?
Ecommerce Marketing Metrics Monitored by Pro Marketers
You might not get to these metrics every day, but they’re something that pro-marketers never let out of their site.
Page Load Speed
I’ve already talked a bit about page load speed, but it’s not something to take lightly. Let’s consider mobile page load times for a minute. A separate Google study found that as page load time goes from 1 second to 10 seconds, the probability of a mobile site visitor bouncing increases 123%. So it’s a good idea to remember that these types of metrics affect the experience of users on both your desktop and mobile landing page.
Your baseline goal for conversion rates should hover somewhere around 2% or 100 conversions per 5,000 visitors. Understanding what’s getting in the way of turning visitors to conversions can take some time, but a landing page audit is a good place to start. Also important to ask: how seamless is your checkout experience?
Customer Acquisition Cost
Before I jump into any formulas, let’s talk about why the cost of customer acquisition is important. Imagine that you are a health brand with an e-commerce storefront, and you offer a 50% off sale on select granola bars. The sale runs for a week and drives record traffic to your site, but afterward, you discover that the top-selling granola bar during this promotion was actually being sold at a cost to you. Because of the offer, it accounts for 20% of your sales for the month. But was selling the bar at a cost to your business a good decision? Will the new customers you acquired be back to purchase more bars when the promotion is over? These are the types of scenarios you can monitor in the bigger picture, by keeping an eye on your customer acquisition cost.
Assessing your CAC requires somewhat of a balancing act between acquisition and lifetime value (LTV). This is usually represented as a ratio: LTV/CAC. The key to monetization is to ensure that your CAC is well below the LTV. Your CAC is usually calculated by accounting for the total cost of marketing efforts involved in acquiring a new customer. Or with a formula that looks like this: CAC = (total cost of sales and marketing) / (# of customers acquired). You can perform that calculation over any set period of time. But doing it regularly is important for monitoring how much you’re spending on campaigns. And whether or not they’re contributing the value necessary to turn a profit.
Now is a good time to talk about retention. The way to truly be successful is to move up from just selling products, to acquiring customers long term. You might be determined to drive a certain number of new customers to your e-commerce business. This is because more customers mean more sales—right? But with CAC fresh on your mind, keep in mind that it’s about 5 to 25 times more expensive to acquire a new customer than it is to retain a current one. And repeat customers tend to spend more money. Make sure that your time spent on acquiring new customers isn’t coming at the cost of retaining current ones.
Also, stop merely measuring on a 30-day cookie. Start checking to see what the annual value is of the customer. Customers include those who came in the first time through hour marketing. You may find you’re driving a lot more return-on-investment (ROI) than you thought.
There’s a reason why metrics like CTR have become so valuable. And you definitely need to monitor them. But don’t let them blindside you from other important metrics. Matrics that could have a large impact on the growth of your e-commerce business.