"Up-to-Date Info on Web-metrics..."
E-commerce is a numbers game. The trick is to focus on the right numbers so that you can make accurate decisions about how to improve your site.
- These six simple calculations will give a snapshot of where you are:
1. Customer Conversion Ratio (CCR) -- Divide your number of orders by your unique visitors to arrive at your CCR. The CCR (also called sales closing ratio and sales closing rate) is the bottom line metric out there. It's a measure of how many of your visitors actually complete the action you desire.
2. Customer Acquisition Cost -- Divide your web-marketing expenses by the total number of orders you receive from unique new buyers over a given time period. Your cost of acquiring a customer is critical to improving your profitability and also your cash flow. Estimate the marketing expenses component of the calculation.
3. Sales Per Visitor -- Divide gross sales by the total number of unique visitors. This is similar to CCR, except that instead of showing you the percentage of visitors you "close" into becoming buyers, the Sales Per Visitor shows you the actual average amount purchased per visitor (not per order).
4. Cost Per Visitor -- Divide your marketing expenses (or your marketing expenses plus your Web expenses) by the number of unique visitors. Cost per visitor measures the effectiveness of your marketing and your conversion processes. The objective is to minimize cost per visitor and increase sales per visitor.
5. No Sale Rate -- Divide the number of one-page visits to the home (or landing) page by the number of visitors entering the site through the home page. This metric is crucial; if you have time to track only one thing, track this one. For any site you can imagine, if visitors are not making it past the home page or other high volume entry page, something is wrong. The problem may be usability -- visitors simply cannot find what they want, or the design is simply not working.
6. No Sale Rate -- Divide the number of one-page visits to the entire site over a period of time by the total number of visitors over the same period of time. While focusing on top entry pages is more important in the short term, this more global metric is likely to point to global design flaws in navigation or page layout. When you make global design changes, pay attention to this one -- you want it to be forever falling.
2. Customer Acquisition Cost -- Divide your web-marketing expenses by the total number of orders you receive from unique new buyers over a given time period. Your cost of acquiring a customer is critical to improving your profitability and also your cash flow. Estimate the marketing expenses component of the calculation.
3. Sales Per Visitor -- Divide gross sales by the total number of unique visitors. This is similar to CCR, except that instead of showing you the percentage of visitors you "close" into becoming buyers, the Sales Per Visitor shows you the actual average amount purchased per visitor (not per order).
4. Cost Per Visitor -- Divide your marketing expenses (or your marketing expenses plus your Web expenses) by the number of unique visitors. Cost per visitor measures the effectiveness of your marketing and your conversion processes. The objective is to minimize cost per visitor and increase sales per visitor.
5. No Sale Rate -- Divide the number of one-page visits to the home (or landing) page by the number of visitors entering the site through the home page. This metric is crucial; if you have time to track only one thing, track this one. For any site you can imagine, if visitors are not making it past the home page or other high volume entry page, something is wrong. The problem may be usability -- visitors simply cannot find what they want, or the design is simply not working.
6. No Sale Rate -- Divide the number of one-page visits to the entire site over a period of time by the total number of visitors over the same period of time. While focusing on top entry pages is more important in the short term, this more global metric is likely to point to global design flaws in navigation or page layout. When you make global design changes, pay attention to this one -- you want it to be forever falling.
By monitoring and optimizing these "conversion" metrics, you can begin to improve your results.
With a little education, anyone can calculate basic Web metrics and understand and use these numbers to maximize results.
With a little education, anyone can calculate basic Web metrics and understand and use these numbers to maximize results.
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