VOL. 0021 – FLORIDA, MONDAY, MAY 29, 2023
Juan F. Arjona Harry
President & CEO Strategee
Like other corporate sales channels, evaluating the performance of the digital sales channel is essential to ensuring prompt repair of any activity deviations, ecommerce design flaws, or ineffective campaigns that harm return on investment.
In addition to the disastrous effects that a poorly designed, poorly advertised, poorly served, incorrectly offered, and/or difficult to navigate brand experiences, the user's non-conformity over time results in decreasing sales and dissatisfaction, and ultimately results in the brand failing as a sales channel.
E-commerce requires the same management, attention, and investment in advertising as traditional outlets because it is a sales channel. It cannot be regarded as a channel where thousands of buyers appear by magic simply because it has been implemented. In Latin America, it frequently fails to receive the attention and investment that an e-commerce channel need. Given the degree of influence that digital commerce has across all categories, this even becomes a separate firm for sophisticated corporations.
There are KPs that allow you to identify potential causes and viable solutions to assure the success of e-commerce and monitor its advancement and evolution. These are:
Conversion Rate: The ratio of visitors to transactions on a website. In this case, it is crucial that the rest of the website, starting with the portfolio it offers, as well as the FAQs and commodities return policies, are clear.
Customer acquisition cost: This figure is calculated by dividing the sum of marketing and advertising expenditures by the quantity of new clients attracted.
Average Order Value: This figure is calculated by dividing total sales for the studied time period by total orders received. CRM and loyalty initiatives work quite effectively to increase the average ticket size.
Social Media Engagement: This is quantified using metrics like: 4.1. Click-Through Rate: Calculated by dividing the number of clicks to the posted content by the total number of posts. 4.2. Referrals from other websites where the brand has been published, listed, or displayed. 4.3. The realization of the transaction while you are on a network is known as a social conversion.
Bounce Rate: The percentage of site visitors that leave after viewing the first page. It is expressed as a percentage of all page visitors. It is crucial to use Google Analytics to analyze this page's time in session in order to determine whether the issue is with the website, the offer, or the portfolio, rather than with the search and finding speed. Examining this KPI in its context is important.
Return Rate: First, this should take into account how lax the return policy is; the more lax the policy, the higher the measurement or alert threshold will likely be when it rises. In order to make the purchase as informed as possible, it is generally recommended that the subject of the images, the sizes or references offered, and the alerts in each photo, image, or video be evaluated. The amount is calculated by dividing the total number of orders or items sent by the number of returns. (May be used both ways).
Shopping Cart Abandonment Rate: Calculates how many orders or carts are left unfulfilled after you begin to make a purchase. It is crucial to go over: 7.1. The price of shipment. 7.2. Different payment methods. 7.3. Low load speed. 7.4. Transaction security aspects. 7.5. Among other causes.
The proportion of returning customers against new customers: This data may be extrapolated from Google Analytics and gives you a comparison of the costs of acquisition and retention.
Customer Lifetime Value, or CLV, is a key indicator for reinvestment and loyalty and personalization campaigns. There are several ways to calculate it, the most popular of which is by RFA, or Recent, Frequency, and Amount; however, the most recommended is to develop an algorithm with a greater number of variables, which allows to reflect the value in a more realistic way.
NPS - Net Promoter Score: This method of calculating NPS for the e-commerce channel limits the percentage of brand critics to the percentage of brand advocates (while excluding neutral respondents).
At Strategee, we follow up on our clients' e-commerce metrics in a critical manner, backing up every recommendation with data and facts that let them make adjustments as they go along and ensure that their e-commerce channels develop in line with the company's anticipated commercial dynamics.