Image credit: PxHere
If you’re unfamiliar with the intricacies of ecommerce, you might make the mistake of assuming that measuring success is as simple as looking at how much profit is being made. That’s far from the case. While making a profit is certainly the end goal, it’s not only the only sign of success, nor does it necessarily mean that a business is healthy.
The smart ecommerce merchant knows this, and patiently monitors the general performance of their business to build a broad understanding of what’s happening (and what they can expect in the imminent future). If you want to max out your sales and help your ecommerce store reach its full potential, you need to do the same — let’s look at 5 ways (other than looking at profit) in which you can measure ecommerce success, and how you can use them effectively:
Following brand mentions
Branding matters. Every time your brand is mentioned online, it has some kind of effect on how you’re perceived overall, and that perception will gradually alter your level of success. Negative mentions will invariably sap interest in your business, even leading your strongest supporters to start to question their loyalty.
If your store is doing the right things, then when your brand name comes up on Twitter or Facebook, it should be as part of a positive comment. The stronger the positivity, the greater the level of detail, and the larger the number of followers, the more it will benefit you.
The easiest way to track brand mentions is to use a dedicated tool, like the aptly-named Mention. Set up the terms you’re looking for, and you’ll easily be able to see when people talk about you — take advantage to reach out to people praising you, and you’ll be able to achieve even more with that positive coverage.
Monitoring cash flow
Profit won’t save you if you run into major issues with cash flow, which is the sum of all the money entering and exiting your business. The moment you don’t have enough money in the bank to cover your ongoing costs, you’ll run into huge problems — you could even fail to make your hosting payments and see your store taken offline.
Ensure that you always have enough money in reserve to cover your costs if some customer payments come in late or there’s an unexpected issue with your stock. You can survive a lack of profit by continuing to sell and turning things around, but a lack of cash flow will sink you.
All you need to do is add up all your regular costs (restocking, software fees, advertising, etc.) and log them in one place along with your average sales revenues — you can use a spreadsheet or a business accounting tool, it’s up to you. After that, just monitor things closely, and take action to cut costs or boost sales when you start to feel the squeeze.
Aggregate review ratings are powerful on webpages and in search results — in general, a 4.5-star store will be viewed as much more worthy of attention than a 3.5-star store. Individual reviews, meanwhile, are very useful as highlighted testimonials, whether on your homepage or on your specific product pages.
By keeping an eye on your reviews, you’ll get a solid idea of how your overall service is being received: not just how much customers are liking your products, but also how they’re rating your website, shipping, prices, and support processes. Sentiment is important. If it starts to turn against you, you need to make suitable changes.
Your ecommerce CMS will likely have native review functionality, so you can start there, but you may want to expand the options (particularly at enterprise level where so much more is on the line): for instance, you can pick up Product Reviews & Ratings if you’re running Magento, or you can supplement a Shopify Plus store with the free product review app available in the app store (there’s also the option of using the dedicated Trustpilot integration). After that, it’s just a matter of making a habit of reading through reviews and identifying actionable takeaways.
Tallying loyal customers
Loyal customers are incredibly valuable in the ecommerce game: they return again and again, spend more, recommend you to others, and provide you with insightful feedback. That’s why a great way to tell if your business is moving in the right direction is to count how many loyal customers you have.
If you’re doing great business in general but your customers aren’t coming back, that suggests that you have a problem. You’ll run out of new customers sooner or later, and your revenue will dry up. You need to impress customers as much as possible so they want to stick around.
Look at your analytics to see what your customer retention rate is like, and to check your average order value and the average number of orders per customer. The better these metrics look, the more stable your business will be in the long term.
Checking search rankings
Appearing near the top for relevant search terms brings in a lot of actionable traffic without requiring much ongoing financial commitment, so how you rank in Google should matter to you. It will be particularly significant when you’re engaging in forecasting, because if you know that you rank for certain evergreen terms, you’ll know that you can expect more traffic to arrive.
Your website should be linked to Google Search Console, and you can find the information you need there, so log in and take a close look at where your pages are appearing for particular terms. Are you looking at upward trends? Seeing irrelevant keywords?
When your rankings are going up, that’s a great sign that your content is performing well relative to that of your competitors. If you’re ranking for irrelevant keywords, though, that means that your pages aren’t correctly written (or formatted). Think carefully about what you want your pages to rank for, and cater the content accordingly.
As we’ve seen, e-commerce success is a complicated thing to gauge, with numerous elements coming together to steadily influence how much profit you end up with. By doing each of the 5 things we’ve been through, you’ll form a much stronger understanding of how well your store is performing.