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Insights, observations, and stories from the front lines of ecommerce and online marketing

8 Ecommerce Revenue Metrics: How To Track & Improve Them With Google Analytics

Ecommerce is a fiercely competitive space. If you’re not growing, you’re dying. And to maintain consistent growth, you’ve got to be on top of your numbers.

Google Analytics is an invaluable tool offering every metric and stat you could conceive of. But without context, numbers are just numbers. It’s useless having all this data if you don’t know what to do with it.

And even if you know which metrics to look at, what do you actually do with that information to bring in more revenue?

Fear not, we’ve got your back. Below is a list of the key revenue metrics you should be paying attention to. You’ll find out how to calculate each metric, how to track it in Google Analytics and how often to check it.

Most importantly, we’ve put together some actionable tips and examples showing exactly what to do to improve each metric. Put these into practice and you’ll be sure to see your store grow.

Let’s get into it.

1. Conversion Rate

This is arguably the most important metric in ecommerce, showing how effectively you monetize your hard-earned traffic. Conversion is king. But globally, stores are only converting 2.86% of visitors. 

Tracking your conversion rate properly and taking steps to improve it should be a top priority.

How to calculate this metric

Whatever your conversion goal is, your conversion rate is a measure of how many times this goal was completed versus how many times it had the potential to be completed. So your conversion rate equals the goal completions divided by the interactions with your content.

An obvious conversion goal in ecommerce is for the user to make a purchase. In this case, the conversion rate would equal the number of transactions divided by the number of sessions on your store.

How to track it in Google Analytics?

Assuming you’ve already set up ecommerce tracking on your store, head to Conversions > Ecommerce > Overview in your Google Analytics dashboard. The overview gives you a chart of your store’s performance over a given period of time and the conversion rate is given below the chart.

How often should I check this metric?

There’s a reason conversion rate is top of this list. It’s one of your most important metrics and one that you should be keeping a close eye on. Check it at least weekly for any major fluctuations.

However, you need a fair amount of data to get useful insights from your conversion rate for testing and optimization. I suggest tracking it in more depth quarterly or yearly.

If you’re doing A/B testing or other methods of conversion optimization, this leaves enough time to pull in the data, optimize your pages and take action based on the results.

How can I improve this metric?

Testing your pages is crucial for optimization. Here are the best ways to improve your conversion rate, along with some examples of best practice.

Great copy on product pages and a clear value proposition

Compelling copy is hands-down the best way to increase conversions. Snappy, persuasive on-brand copy that speaks to the pain points of your customers builds trust and drives action. You might be surprised how changing one word produces a jump in your conversion rate.

Loaf

Loaf sell mattresses, furniture and other items for the home using a little cheeky British humor. The copy is consistently casual, fun and direct and always addresses the needs of the target customer.

They cleverly market this lower priced mattress as a spare room mattress. After all, you don’t want to spend too much on a mattress you’ll never sleep on.

 

AYR

AYR is an online fashion retailer renowned for their snappy copy, which is always conversational and humorous. The product details are left for the bullets below, the copy speaks directly to the customer.

 

High-quality photos

When you walk into a brick-and-mortar store you can try on clothes, play with gadgets and taste foods. With ecommerce, you are asking the customer to buy something without ever having touched it or used it. This makes the photography extra important. It should be eye-catching and create a sense of need.

Bang & Olufsen

Making the best speakers with the sleekest designs, Bang & Olufsen need great photography to do their products justice online.

The photography should help the customer see themselves using the product by showing it in context. On the product page for this eye-catching speaker, the beauty of the speaker is displayed in a range of environments using a carousel of images.  

Customer reviews

The easiest way to produce persuasive copy on your product page is to get your customers to write it for you. Adding customer reviews provides social proof and is a very powerful way to influence the buying decision. Typically, this is the final push they need before purchase.

Free People

Right beneath this product description is a five-star review which couldn’t have been more perfect it was written by the brand themselves.

 

Live chat

Live chat is making waves in the ecommerce world, producing results that no one thought possible. 79% of businesses say offering live chat has had a positive effect on sales, revenue, and customer loyalty.

A chat box popping up at just the right moment can, in real-time, deal with anything stopping the customer from purchasing. Chatbots can even guide them right through the purchase automatically.

Jerome’s Furniture

California-based furniture retailer, Jerome’s, takes a soft-sell approach by letting the customer initiate the chat. Even so, they’ve seen phenomenal results using live chat, achieving a 1000% increase in their conversion rate.

2. Average Order Value

This is a simple yet crucial metric for any ecommerce store. It tells you the average dollar amount spent by your customers.

AOV, along with conversion rate and unique sessions, completes the revenue equation. It helps you get to know your customers’ spending habits and identify opportunities to upsell, cross-sell, and make tailored offers.

How to calculate this metric

Simply divide the total dollar value of sales over a given period by the number of orders over that period.

 

How to track it in Google Analytics

You’ll find average order value next but one to your conversion rate in Google Analytics: Conversions > Ecommerce > Overview.

 

How often should I check this metric?

Most brands track average order value as a moving monthly average. This approach gives you enough time to collect the data but is regular enough that you can take action if things start to go the wrong way.

How can I improve this metric?

The easiest way to improve average order value is to upsell and cross-sell to existing customers as they are checking out by recommending other items. This is how Amazon became the dominant force in ecommerce.

Product recommendations

iHerb

iHerb recommends products in a number of ways. On this product page, it recommends products frequently purchased together as well as related products. This makes sense for a store that sells thousands of low-priced items that are very closely related.

 

Upsell

The upsell is a surefire way to increase average order value. If the customer is ready to purchase one item, they’re already well on the way to moving up to a higher-priced item. Sometimes they just need to see it there in front of them.

Upsell Recommendations by Innonic

This free Shopify app allows you to easily add product recommendations at checkout to entice customers to add more items to their cart. The recommendations are automatically generated based on previous purchases. It’s easy to install and integrates flawlessly with your existing store.

 

Cross-sell

Offering customers items similar to what they intend to buy is another way to increase average order value.

Relatify

Relatify lets you tag products by type and arrange them into collections. Then it displays related products to entice customers to add more to their orders. This app stands out for its easy integration with Shopify stores and great support.

 

 

Offer free shipping with a minimum order limit

By offering free shipping when customers spend a given amount, you all but guarantee that most of your orders will hit this benchmark. Set the level just above your current average order value to push orders up over that value.

This works particularly well for stores whose products have a long shelf life where customers have recurring orders. It makes sense to bump up the order because they would be making the purchase down the line anyway. But the trick is, they’ll likely do this each and every time.

Vision Express

Vision Express changed the game for those of us with less than 20/20 vision by offering prescription glasses frames and contact lenses online, without the hiked-up optician prices.

Here, I’m 5p from hitting the minimum order and they let me know, offering free delivery if I spend over £49. One more pack of contact lens solution pushes the order over the minimum threshold and saves me £2.98 in shipping. It’s a no-brainer, even though it’s adds £9.99 to my order.

 

3. New vs Returning Customers

Returning customers are far more valuable and cheaper to procure than new customers.

A recent survey found that compared to first-time customers, returning customers:

  • Added 65.16% more items to carts
  • Converted 73.72% more 
  • Spent 16.15% more per transaction

In a nutshell, it’s more cost effective to look after your loyal customers than to chase after new ones. Tracking the rate of new vs. returning customers tells you how well you are doing this.

How to calculate this metric?

For the percentage of returning customers, divide the number of returning customers by the total number of customers and multiply by 100.

How to track it in Google Analytics?

There are two simple ways to track this in Google Analytics.

To compare the total users to new users, head to Audience > Overview and find the figures underneath the chart.

Or, to get the percentage of returning customers, navigate to Conversions > Ecommerce > Overview and click on + Add Segment. Check the boxes for New Users and Returning Users and click Apply, as below.

 

How often should I check this metric?

Keeping your loyal customers coming back is a long-term strategy so it should be tracked monthly. Although larger stores with bigger teams may be able to track it more regularly.

How can I improve this metric?

Regular newsletters

An email newsletter to existing customers with news, product updates, offers etc. is a great way to keep them engaged and entice repeat purchases. This is a must for ecommerce stores and should be seen as the minimum requirement in your efforts to improve this metric.

It helps to keep the timing of the newsletter consistent and regular. If you do it weekly, do it every week at the same time. If it’s only bi-weekly, that’s ok, but do it every time at the same time.

If the content is genuinely compelling your best customers will look out for it and be disappointed if it doesn’t arrive on time.

Popups and email capture

A good way to collect email addresses and build your list of loyal customers is to use pop-ups. With tools like Privy, you can target campaigns only to people who have showed genuine interest in making a purchase.

Offering a lead magnet, like access to a video or entry to a competition, is a great way to capture their email so you can nurture them further and turn them into long-term return customers.

Coupon codes

Offering a coupon code for a special discount gets customers in the door and hopefully gives you their email address and opt-in for marketing.

Be careful not to give too much of a discount as this will attract the wrong type of customer. Remember we are looking for people who will become long-term, high-spending customers.

This example from Prospector Knives offers a 20% discount on the next purchase in exchange for the user’s email address.

Customer loyalty program

Creating and managing a customer loyalty program is much easier than it used to be and has huge potential benefits. Loyalty program members spend between 12-18% more per year than non-loyalty program members.

Smile.io

Smile is an easy way to add a custom loyalty program to your Shopify store without any coding. It has thousands of five-star reviews which show how much ecommerce stores value the ability to keep customers coming back.

You can connect Smile with your email marketing software and other tools, and access analytics to optimize your loyalty program for maximum retention and sales.

 

4. Revenue by Traffic Source

Breaking down where your revenue is coming from is vital in refining your strategy. It not only helps you recognise consumer trends, but also see where your marketing dollars should be spent.

Assessing which channels are bringing in the most and comparing that figure to the cost of each channel helps you understand your ROI for social, organic search, paid search, referrals etc. and figure out the value of a customer from each traffic source.

How to calculate this metric?

Google Analytics tells you conversion rates and total revenue from each channel.

How to track it in Google Analytics?

Navigate to Acquisition > Overview and look at the Conversions > Revenue column.

 

How often should I check this metric?

This is something you need to keep an eye on for any big changes. Check it weekly and make sure there are no significant fluctuations. If you’re running a new campaign on a new channel, of course you will want to check it more carefully and regularly to gauge performance.

How can I improve this metric?

Scale traffic sources with a high conversion rate

Once you know your best performing traffic sources, you can increase spend on that channel, hopefully increasing traffic and improving your overall conversion rates even further.

A word of caution though, don’t put all your eggs in one basket – or all your marketing budget in one channel. You want to have multiple campaigns running on multiple channels so you can continue to track their performance and change your strategy accordingly.

Don’t focus your effort on sources with poor conversion rates which don’t assist conversions

An assisted conversion is any interaction, apart from the final click, that led to a lead converting. They tell you which sources are helping other sources to convert, even if they are not directly converting visitors themselves.

For any sources that aren’t converting directly, only put money into them if they are assisting other sources.  

Check the attribution models and assisted conversions

Attribution models determine the way Google assigns credit for conversions to different channels. It’s not always a straight path from source to conversion, so it’s not as simple as assigning credit for an assisted conversion to the channel with the last indirect interaction. It’s a good idea to make a comparison between the seven different models:

  • Last non-direct interaction
  • First interaction
  • Last interaction
  • Linear
  • Time decay
  • Last ad click
  • Position-based

Navigate to Conversions > Attribution > Model Comparison Tool to make this comparison. It will give you a much deeper insight into your customers’ paths to purchase.

For a more detailed exploration of ecommerce attribution models, check out this comprehensive guide.

To see how each channel is performing in terms of assisted conversions vs. direct conversions, head to Conversions > Multi-Channel Funnels > Assisted Conversions.

In this example, you can see that although referrals had marginally fewer direct conversions than organic search (43,429 vs. 46,167), the channel’s assisted conversion value is almost 4x higher. This is a great example of the nuances present when you dig this deep.

This kind of analysis tells the real story of how your channels are performing.

 

5. Revenue Per Email

This is a vastly undervalued metric. It doesn’t dig down to your bottom line in terms of the costs of email marketing, but it does tell you how much your email marketing is bringing in, which is an extremely valuable measure.

How to calculate this metric?

Revenue generated / (Email quantity sent – number of bounces)

How to track it in Google Analytics?

Click through to Acquisition > All Traffic > Channels.

 

Choose Email as the Source.

 

You’ll see a breakdown of your revenue per email in the final column on the right.

 

How often should I check this metric?

You will probably be tempted to track this more often after blasting a new email campaign. It can be tracked monthly, giving you a true insight into the money each of your emails is bringing in.

How can I improve this metric?

A/B testing subject/headlines

Improve open rates by A/B testing your subject lines. You can also test headlines, images and copy within the email to improve click-through rates. These two factors combined will increase the revenue derived from each email.

Use swipe files

The best copywriters in the world swear by their swipe files. These are collections of high-performing copy to use as inspiration for new sales letters and emails.

To improve the performance of your emails, hold onto any sales letters or landing pages that you see performing well or that you find inspiring. When you need to write or improve a sales email, your swipe file is your reference.

It’s much easier to start with inspiration when you’re staring at a blank page.

Use power words and tested headlines  

Power words hook the reader by making them feel an emotion. Words like joy, trust, fear, surprise, sadness, disgust, anger and anticipation among many others.

Add these words to tried headline formulas. Try using numbers, offering value, asking a question, creating intrigue or making a comparison.

This headline analyzer is a useful tool for a quick check on the power of your headlines:

 

It assigns your headline a score out of 100 and offers tips to improve the score to make your headline more compelling.

6. Revenue Per Demographic Segment

By segmenting your audience, you can isolate key elements of your data. Looking at revenue by different demographics allows you to drill-down and really get to know your audience. Looking not just at how much revenue each demographic is bringing in, but how well they convert informs your strategy going forward.  

How to calculate this metric?

The advanced segmentation feature in Google Analytics allows you to read off your revenue by age range and gender.

How to track it in Google Analytics?

Start by going to Audience > Demographics then choose Age or Gender.

The screenshot below shows more traffic in the 25-34 demographic but the 35-44 year olds have a higher AOV and convert better.

 

To segment further, add a secondary dimension from the drop-down. Here I select Gender.

 

This shows that the highest revenue segments are not the best converting segments (highlighted in green).

 You can see that 35-44 year-old males offer the best combination of high revenue and high conversions. Armed with this information, you can go ahead and create a new segment for future analysis.

 

How often should I check this metric?

This is a deep-dive metric that takes some time to analyze. For smaller stores this could be a quarterly check, larger stores with more resources might check this monthly.

How can I improve this metric?

Scale high-converting demographic segments in your ad campaigns

This key insight tells you which specific demographics to target harder with your ad spend. Read off your best converting demographics on the high revenue list and target these.

Don’t waste your effort on segments with poor conversion rates and exclude them from your ad campaigns

Given finite ad budget and resources, it’s best to leave the poor-converting demographics and focus your attention on those bringing in more revenue from a lower ad spend.

7. Revenue per Geographic Segment

It’s useful to track geographic segments in a similar way to demographics. Google Analytics has all the information needed to look at revenue and conversions by language and location, and cross-examine this against age and gender for a complete analysis.

How to calculate this metric?

Again, Google Analytics gives you the data for this, including total revenue, average order value and conversion rate for each language or location, from specific cities, to wider geographical regions to whole countries.

How to track it in Google Analytics?

Navigate to Audience > Geo. From here you can choose to segment by Language or Location.

 

We can see that US-English-speaking visitors bring in the most revenue by far and are the best converting group. So we can add this parameter to the buyer persona.

Choose Edit from the Actions menu on the segment you added in the previous step.

 

Add en-us in the Language field.

 

Similarly when you look at the data by location, the US is by far the best performing.

 

PRO TIP: Change the primary dimension to City for a deeper-dive into your data. The highlighted cities here have the highest conversion rates. Exclude the worst converting locations in your PPC ads to save money on low-converting traffic.

 

You can also easily check this data in Conversific. Here’s what it looks like:

 

The beauty of this interface is its simplicity. Once you’ve decided on the metrics to track, use Conversific to keep on top of them without wading through the reams of data offered by Google Analytics.

How often should I check this metric?

Check this metric along with the demographic data monthly or quarterly depending on your resources.

How can I improve this metric?

The same advice applies as demographic segmentation above:

  • Increase spend to scale high-converting geographic segments in your ad campaigns
  • Save time and money by excluding segments with a poor conversion rate from your ad campaigns
  • Update your buyer personas with these valuable insights
  • Easily track this metric with Conversific

8. Cart abandonment rate

Cart abandonment is a huge problem in ecommerce. On average 69% of shopping carts are abandoned. That means stores are only taking $3 out of every 10.

You can see this as an opportunity. That remaining $7 represents potential revenue on each order. That’s why keeping track of your store’s abandonment figures is so important.

How to calculate this metric?

Cart abandonment is a measure of how many shoppers put something in their cart but didn’t check out. Take your total orders for a given time period and divide it by the total number of visitors who added an item to their cart.

 

How to track it in Google Analytics?

Navigate to Conversions > Ecommerce > Shopping Behavior. Your total abandoned carts and abandonment rate are shown below the main bar chart.

The final column in the chart below that gives you a comparison of the completion rate for sessions with transactions between new and returning users.

 

To make this comparison by other factors, select one from the User Type drop-down menu.

 

These stats offer a deeper dive into your abandonment stats, but numbers are just numbers in isolation.

Conversific puts these numbers into real-world context by offering benchmarks from your industry. The conversion report shows you the stats you need at each stage of the funnel.

 

How often should I check this metric?

Tracking your cart abandonment by month will provide you with the necessary insights to make targeted efforts to improve the drop-off.

How can I improve this metric?

The opportunity to recapture the revenue from abandonment carts is so huge, a bunch of solutions have been developed. Using the techniques below, stores have recovered up to a third of the lost revenue.

Exit-intent coupons

Exit-intent pop-ups use data about a user’s behavior to predict when they are just about to leave a site without completing their purchase. The technology is getting more and more sophisticated all the time.

Pop-ups can be used for lead capture or to directly offer a discount on items added to the cart. Either way, the goal is to make sure the user doesn’t leave without completing the purchase.

Lush

Handmade cosmetics retailer Lush uses humour to get the attention of visitors who are showing signs of leaving without a purchase. The CTA here is to sign up for their newsletter which they use to nurture leads and remarket to make sales further down the funnel.

 

Swisswatchexpo.com

This example from Swisswatchexpo.com includes a countdown timer for a sense of urgency and an offer of $100 off and free shipping.

A well-designed checkout page

The goal of payment page design is to make it as easy as possible for the customer to enter their payment details and complete the transaction.

To make the path to purchase as frictionless as possible, you need to consider the following:

  • Intuitive UI
  • No distractions
  • Multiple payment options
  • Optimize for mobile
Apple

Design is central to all things Apple and their checkout page is no different, clearly displaying the key information with no distractions. Product recommendations appear below the fold, out of sight of the key information.

The Buy Now button is consistent with the CTAs used throughout the journey and stands out with a bright blue colour against the white background.

 

Cart abandonment emails

A host of tools like Recart and CartStack have made retargeting customers who abandoned carts easier than ever. These tools automate the sending of personalized emails reminding them of their lonely cart or even offering discounts in an attempt to get these customers to complete their purchases.

Here’s an example from Asos with an attention-grabbing headline.

 

Remarketing Ads

With Google Remarketing, you can target ads to individuals who visited your site and added items to their cart but didn’t complete the purchase.

By adding a tag – a few lines of code – to your site, Google has the necessary information to retarget these cart abandoners across their Display Network with an ad reminding them to return and complete their purchase.

Targeting to customers who already have enough brand affinity to visit and add an item to the cart produces 2-3x higher click-through rates than standard display ads.

Conclusion

Concentrating on these key metrics should help you streamline your marketing efforts and improve your store’s performance.

Take the information for how often to check each metric and add that to your weekly and monthly routines. And adapt your reports to make it easy to track the metrics mentioned.

Here’s a reminder of the key takeaways:

  • Improve your conversion rate with compelling copy and optimized design.
  • Increase average order value by upselling, cross-selling and offering free shipping.
  • Increase customer loyalty with a newsletter, pop-ups, coupons or a customer loyalty program.
  • Optimize email marketing with A/B testing, keeping a swipe file and using power words and tested headlines for better copy.
  • Look at revenue by traffic source, demographic and location, optimize your buyer personas and adjust ad spend accordingly.
  • Recover lost revenue by remarketing to improve your cart abandonment rate.

Get started implementing these tips today and taking inspiration from the examples offered, and you’ll be on the way to skyrocketing your sales and smashing your store’s goals.

This post is by Steve Smith, CEO of Conversific. They found that there’s a direct correlation between trying to understand data and being sad. That’s why the team behind Conversific wants to change the world of eCommerce analytics upside down and make it mainstream to every Shopify store.

Posted by Steve Smith

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