The most important metrics to monitor in your online store (and how to improve them) - Part II
Raising AOV raises your overall revenue
In our previous post we introduced the three most important metrics of your online store worth monitoring. Let’s move forward and take a closer look at your business performance. What do specific statistics actually indicate, how do we measure them, and what tools can help us make the work easier? In this post we’ll cover the following metrics:
1. Average Order Value
You may guess from its title that AOV stands for the average customer’s spend per order (i.e. the value per transaction - note, not the customer!). This is calculated as Total Revenue divided by the Number of Orders.
AOV supplies very valuable information for driving business decisions such as product pricing, store layout, shipping costs, and how much is spent on advertising. It also lets merchants see where their investments are paying off the most for each order. You want to see your AOV rise relative to the amount spent by each customer - the more they spend each time they visit your site, the better.
Average order value, as one of the critical ecommerce metrics, is usually reported in each online store’s analytics and Google Analytics, and is therefore one of the main statistics that comes up on any dashboard.
How to raise your AOV?
While we talk about the AOV and products, you don’t need any special tool except from your online store reports. When it comes to loyalty programs, there’s no better expert than SweetTooth which is one of the top platforms for eCommerce.
Read more about how important watching your average order value is.
2. Rate of Returning Visitors
(also known as Repeat Customer Rate - RCR)
This stat is displayed as a percentage of how many visitors come back to your store to shop repeatedly. This metric is also monitored in your online store and Google Analytics.
The group of returning customers is very important for your business because it shows customers’ preferences and is also a good measure of how loyal they are to your brand and how much they trust it. Additionally, this demographic is also important because they can supply desired reviews and spread your brand by word-of-mouth.
The share of returning customers compared to new customers is usually slammer and this is quite natural, whether you’re a small up-and-coming store or one with name value. The important thing is the care given to both the groups and the effort spent on converting new visitors into loyal customers.
Returning visitors become an evangelist for your brand.
How do you make that transition?
To keep your customer database under control it’s also a good idea to find a good CRM tool. We can recommend Salesforce and Insightly for small online stores. Other apps that easily integrate with emailing protocols include MailChimp or GetResponse.
Sometimes CRM, emailing, and loyalty tools don’t give the whole picture for a proper understanding of correlations between specific numbers. To make your offer more accurate you might need to add some detailed analytics to know what campaigns drive the most visitors, which of them make them purchase, and what the busiest shopping days and hours tend to be. Consider using a reporting app that provides detailed stats about your online stores.
3. Traffic by Sources
This metric has a bit different character than the previous ones. It is used to identify from which sources your visitors are coming to your store. There are 3 basic types of traffic sources: Organic Search, Direct traffic, and Referrals, which are sites or social networks that incorporate links back to your store. Foremost, it helps eCommerce merchants to understand how well their campaigns are performing.
Google Analytics provides only basic traffic analysis, so if you want to work with your traffic and campaigns wisely you should know which channel and campaign generates the most leads and revenue.
Kissmetrics, Compass, MonkeyData and Vantage are best in the field. Each serves a slightly different purpose so it’s up to your needs which tool fits you best.
Which channel bring the most visitors to your store?
How can you improve your website traffic?
We could devote a whole article or e-book to this topic. To sum it up, we recommend focusing on organic searches - it’s free and much more effective than paid searches, especially if you’re just starting out. There are a few key things to keep in mind:
Tracking and understanding the metrics from of your online store can take you to the next level as an entrepreneur. Accurate and easy-to-understand data can give you confidence and ability to make educated business decisions. And the increasing availability of eCommerce tools allows you to outsource some work to professionals, allowing you to focus on the things that matter.
Good luck and enjoy doing your business!
The second edition of E-Commerce Berlin Expo took place on 2 February 2017. The event attracted the most important industry representatives from areas such as: Online Marketing, E-Shop Software, Hosting & Cloud Computing, Cross-Channel Technologies, E-Payment, Digital Marketing and Logistics.
The building of the former Dresdner station – currently Station Berlin – hosted 80 exhibitors (including DHL, Idealo, Rakuten, PrestaShop, Meet Magento Association and Lengow) and 3,000 international visitors. Industry experts shared their knowledge and insights on four stages, giving a number of presentations on the most up-to-date e-commerce trends, challenges and solution.
Many discussions revolved around entering new markets, with the Chinese and the Russian markets in particular. Karl Wehner (Alibaba Group) and Dominik Johnson (Yandex) characterized these markets. There was also a special panel session on China and Russia, with Roman Decker (Schneider Group), Dominik Johnson (Yandex), Nenad Cetkovic (Lengow) and Steven Morell (AX Semantics). The session was chaired by Oliver Prothmann, the President of Bundesverbands Onlinehandel e.V.
E-commerce in social media was another widely discussed domain. Kamil Glenszczyk from Google Ireland covered the topic of YouTube and e-commerce, while Peter Podolinsky from ROI Hunter focused on Facebook and e-commerce. Apart from that, other speakers focused on: Sales Channels (Thomas Ficht, Idealo), Performance Marketing and Programmatic Marketing (Bjorn Espenes, FINCH), SEO tips for e-commerce businesses (Fernando Angulo, SEMrush) and Data-driven e-commerce (Moritz Corbelin, Otto Group)
The second edition of the E-Commerce Berlin Expo was a large success. The next event will take place in 2018. Exact date will be announced soon.
For more information, please visit: ecommerceberlin.com
In an ideal world, customers would come to your ecommerce site, search for what they need, complete the checkout form quickly and easily and write rave reviews to say how excellent their customer experience was. In reality, shoppers make mistakes, get frustrated in the checkout and abandon the process.
According to Baymard Institute, the average cart abandonment rate is 67.91% - a worrying statistic for ecommerce companies. Recent research from Invesp also stated that 12% of carts are abandoned due to the amount of information buyers need to enter. However, these issues can be remedied with the implementation of address validation, a solution that is often overlooked by ecommerce companies.
To combat this issue, many companies have invested in address validation tools - however not all tools are created equally, and most companies use a simple postcode lookup which still requires a large amount of typing on the customer’s part. Even worse, some companies don’t provide pre validation, meaning that customers are expected to complete form fields manually and for address data to be checked after the customer has completed. In an age where customers expect the checkout journey to be completed as speedily as possible, the prospect of filling out seemingly endless form fields is not relished by shoppers and drives many customers away.
At PCA Predict, we offer an effective solution to this dilemma that is quick and simple. Our smart address validation service allows the customer to search for their address, typing the first few letters of their street name, town or postcode. Our intelligent technology then accurately auto-completes the entire address verifying against official postal sources. Taking out potential extra steps (such as fixing address errors), and reducing the amount of typing required has a noticeable impact on the conversion rate through the checkout. In fact, some of our customers have even increased conversions by up to 40% after implementing our address validation tool.
Not only this, but PCA Predict’s address validation is also quick and easy to integrate, and you could be up and running in minutes.
Try our demo for free and see the benefits of user experience and deliveries for yourself.
In this interview, Robin von Hein from the Simplesurance Group explains how the digital change paved their way to success and how e-commerce companies and their customers can benefit from insurances made easier. Also, in the run up to his talk at the E-commerce Berlin Expo on 2nd February 2017, this interview will definitely inspire you to simplify things for your customers too. And perhaps, to insure your pet with just a few clicks.
Paulina, E-commerce Berlin: Simplesurance develops and distributes innovative cross-selling software solutions that have revolutionized the insurance and the e-commerce industry. How did you come up with the idea for this business?
Robin von Hein, the CEO and Founder of Simplesurance-group: I worked in the traditional insurance industry for almost 10 years and experienced how the insurance market was standing still for a long time, not transforming, not using the possibilities provided by digitalization, like other industries. Receiving insurance coverage always meant combing through lots of fine print, a lot of bureaucracy and it was always considered a highly complex product. The gap between traditional insurance and the new digital environment grew further apart. When I traveled in South Africa, I saw how easy it was to get a risk life insurance for a bus ride via SMS, because traffic there is considered more dangerous than any other form of crime. I was instantly fascinated by the beauty and simplicity of closing a contract as fast as by sending a short message. It was there, when the idea for simplesurance was planted. I realized that the insurance market should use the potential offered by technology. I wanted to make insurance for everyday objects just as easy as any digital offer. I saw the most potential in the gap between e-commerce and the insurance industry, especially since cross-selling of two different types of products has been best practice in offline retail stores for many years. Many stationary stores already offered insurance and warranty extensions with their products, but the market looked empty in online retail. I envisioned a company that mediates between traditional insurances and online stores, enabling customers to insure any type of product at the digital point of sale with just one additional click.
You have your own nine retail portals that offer consumers the possibility to directly insure purchased products – this done completely paperless and with only a few clicks. How did you notice that people need such solutions?
Along with the digital change, customer’s behavior has been changing. Nowadays, people are media-oriented, they don’t want to comb through a lot of fine print. The mobile phone has become the new anchor for acquiring new customers, because the mobile phone is omnipresent in people’s lives. It is used for communication, orientation, guidance, entertainment and shopping. Why should the insurance continue to be complex and complicated? Our platform as well as our cross-selling solution that can be easily implemented via software-plugins in various common shop-systems and allow customers to purchase an insurance via just one click.
Do you plan to extend the scope of insurances offered in the future?
Yes, we are constantly driven by our ambition to provide our customers and partners with the best service and products, so we are constantly working on new products. We offer insurances for mobile electronic devices, stationary electronic devices, tools, musical instruments, pets, car legal insurance, tyres, bikes and furniture. In 2016 we started offering stroller insurances and travel insurances as well. We continuously do research to establish new market entry strategies and to develop new products. We’re planning to release a cyber insurance for different types of online activities. More information will follow soon. We’re also currently working on extending our business model.
From the point of view of your customers, what are the biggest advantages of using your portals?
The three main advantages of using our portals are: simplicity, automatization and service. We enable our customers to receive insurance coverage for one product in particular and set them free from insuring more than necessary, while reassuring the best service and insuring a broad variety of damages, such as water damage, breakage and fire damages. This makes it possible for us to offer insurances at a rather low price. The household insurance for instance protects the household, but doesn’t protect self-imposed damages and different types of theft that occur outside of a locked place. By using our portals, our clients can insure any product they want, from smartphones and other mobile devices to bikes, furniture and electric household devices. It only takes one click to insure these products, by simply entering an email-address and the serial number of the product that has to be insured. Customers, who purchase a new product, e.g. a smartphone at one of our partner’s shop just need to make one additional click in the checkout box to add the product insurance, while all information required are automatically taken from the purchase details. For customers, the one-click-solution creates several benefits: the insurance isn’t automatically extended, the process is automatized and mostly anonymous. In case of a damage claim, we handle the process fully automated. Thus we offer an enjoyable and simple customer journey in which customers can report claims to us 24/7 online and have to provide only little data. The claim management is regulated fully automatized as well: after filling in the claim form, our algorithm-based system can handle claims at scale and speed.
And from the point of view of e-commerce, how can e-commerce companies benefit from partnering with simplesurance?
We have more than 1.700 partnerships with e-commerce-companies. The number speaks for itself and shows, that we are the most important provider of cross-selling solutions at the interface of online retail and insurance. Our innovative software enables online retailers with a new way to extend the level of service they supply to customers, as well as increase their profit margins by offering product insurances and extended warranties on their products. Customers have a one-click-experience by adding the product insurance to their shopping basket and have increased protection for their purchased goods. By this means, the shops become more attractive to the customers as they offer additional service and makes the respective shop stand out from competitors. Most importantly, the integration is also simple for the e-commerce. We offer two solutions, one via Plugin which takes two hours to integrate. We also offer a full integration via API, which takes a little more effort but is just as easy to integrate as the Plugin. All interactions can be customized and constantly improved via A/B-testing, by adjusting the design, user experience or prices, to guarantee a high conversion rate.
Based on your expertise, what is the hardest part of connecting the world of insurances with the world of e-commerce?
Insurance has always been seen as a very complex product. However, offline retailers have been selling insurances and warranty extensions for a long time. For us, the first challenge was the implementation of our technology into the e-shop as well as the optimization of the conversion rate. Therefore, we constantly conduct A/B-tests by testing different parameters, such as the user experience, design, price options and different products.
Was Simplesurance so innovative that it did not have any direct competition at that time? Or if you had competitors, what helped you outscore them?
We were the first movers on the market with our cross-selling software solution. It took us two years to perfect it and we are continuously optimizing our software and the conversion rates for the e-commerce.
On February 2, 2017, you will give a talk at the E-commerce Berlin Expo, which is the biggest event of this type in Berlin. What will you focus on in your presentation? Can you reveal some details?
I’m very excited to speak at the E-Commerce Berlin Expo! I’m going to show how e-commerce companies can profit from a cross-selling software solution and show how many awesome and easy ways there are to use cross-selling software plugins in the e-commerce systems. However, I don’t want to spoil the ending.
“There is a significant chunk of revenue tucked away in that long tail that is always at risk of being overlooked. Your C-Items may not be top sellers, but it doesn't mean that no one wants them… They just need to find the right audience!”, says Fernando Angulo, the Head of International Partnerships at SEMrush. In this interview before his SEO-oriented talk at the E-commerce Berlin Expo, you will learn more about his expert background and his insights on the most frequent SEO mistakes of Ecommerce websites.
Paulina, E-commerce Berlin: You have more than 5 years of professional experience in online marketing. In your eyes, how has online marketing changed over time?
Fernando Angulo, Head of International Partnerships, SEMrush: Marketing has not changed conceptually in the last 5 years, ten or thirty years. Absolutely. We can talk about the evolution of how we consume products and services, and how it has evolved with the society itself and the advancement of technologies. Marketing is strictly a living discipline that is much more technical than many "sell" it.
Looking at the developments in online marketing, what do you perceive as a must-do to succeed in running a business online in 2017? Are there any areas that we simply must not overlook?
For all types of business, there are 5 areas that I'd suggest to improve constantly:
You have lived and worked in Argentina, Chile, Spain and Russia. If you were to compare the state of online marketing in these countries, what differences would you list?
Interestingly, there are many similarities. The main differences are, of course, the language and the Internet speed. In the Spanish-speaking world, digital marketing moves in Google in an absolute majority. In Russia, where I have lived for the last 15 years, the presence of Google is significant, but has not yet displaced the regional giant Yandex.
What has working in such an international environment taught you?
I take the experience of working in a multinational leader among its sector, with a great team of professionals who have really helped me grow professionally with their knowledge, experience and advice. And what I really think has gratified me the most, has been knowing the value of proactivity and what it can bring in a working environment.
Since 2013 you work as the Head of international Partnerships at SEMrush Inc., a powerful and versatile competitive intelligence suite for online marketing, from SEO and PPC to social media and video advertising research. What does your job actually entail?
Yes. In a very few words, we have a business based on the analysis of data. We are providers of data. So if you are a marketer you can deeply analyze any online marketing channel directly from our platform. I'm right now developing and organizing our partnerships with Opinion Leaders from different niches related to Online Marketing.
SEMrush has made its way from a small startup to a big international company. It started out in 2008 – and now has offices in 4 countries and employs more than 350 employees. What made it possible for the company to grow so rapidly?
A lot has happened in the recent years. How did we achieve what we have now? On the one hand, our answer will sound simple — we were doing a job we loved and we listened to our users. Our users keep giving us tons of great ideas and we generate a lot of them too. By the way, only during 2016 we launched 100 new more features in our platform and we are already developing more for 2017. Saying that, I think we are doing a pretty good job here.
On 2nd February 2017 you will appear on the stage of the E-commerce Berlin Expo with a talk titled ”Strategies to improve your SEO and get even more conversions for your Ecommerce”. Why the choice of this specific topic for this event?
For me it was very clear from the beginning, since I heard about the E-commerce Berlin Expo and the type of audience we will have there. I knew that I have to talk about my specialty. I knew that my experience in the Ecommerce organic growth using SEO techniques was the right choice and I have a lot of data and case studies to show.
In this talk you will focus specifically on long tail keywords and their potential for Ecommerce. Why is long tail a better way to connect with customers?
There is a significant chunk of revenue tucked away in that long tail that is always at risk of being overlooked. Your C-Items may not be top sellers, but it doesn't mean that no one wants them… They just need to find the right audience! And once that audience finds you, you’re going to realize that they’ll buy your C-Items, and conveniently pick up B-Items and A-Items from you along the way (especially if they’re complementary) to take advantage of combined shipping.
While A-Items may be fast moving, these encounter plenty of competition from other retailers. After all, if a certain product is really popular with consumers, many retailers will jump at the opportunity to boost their sales by selling similar products. Moreover, if you’re selling the same or similar popular products like your competitors, there’s a high chance customers will flock to either big brands or the seller who sells it the cheapest… and the latter means really thin margins where you generate little to no profit (let alone covering your carrying costs).
SEO is fundamental to ecommerce. From your perspective, what are the most frequent sins and mistakes that ecommerce companies (especially SMBs) make with their SEO?
My top 3 sins working with different Ecommerce businesses belong to these categories:
1. Poor navigation and indexability of an Ecommerce website.
These are the pillars to determine the behavior of a user and their possible transformation into a final client. In addition to facilitate indexing to search engine spiders, our SEO Long Tail improves, something fundamental in any online store with an average quantity of products.
Segmenting tree categories and subcategories correctly improve the route that the user must take from any page of the online store to the desired product. Ideally, in this the user has to make no more than three clicks, although in stores of a large size in terms of quantity of products it is difficult to achieve it through category navigation, so remember to also integrate an internal search engine that works correctly. It is essential.
Another good tip is to integrate product-related links in each product tab always at the end, so if the product itself is not of interest to the user, they will help make the user stay on the website and jump to another related product that may be of interest. This way we improve the conversion and improve the Long Tail SEO through a good strategy of internal links.
For indexability, nothing is better than a segmented, clean, XML sitemap linked in our Google Webmaster Tools account.
2. Duplicity of content on Ecommerce sites. The most typical SEO error.
If you use the description that the manufacturer gives for each product as standard in our online store, we will automatically have a serious problem of duplicate content for all products of your store.
3. No integration of Microdata.
Very few Ecommerce websites currently integrate the microdata correctly. We have a range of formats to integrate that to improve the visibility of our products in the SERPs, hence as we have said, the CTR improves from the valuation that will appear on the search pages by means of stars (ranking), to the opinions of the product, or the prices. Showing these features directly on the search page when a user is looking for our product decants towards us the choice.
This year again, E-commerce Berlin Expo is promising to be one of the best industry gatherings in Europe. What do you personally expect from the 2017 edition?
One of the first things I look for is to learn more from professionals in the sector, and to be able to give more of myself in the things that I have learnt over time. I am very anxious to see new faces and engage in long and productive talks.