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Season 1 - Episode 9

from markets to millions, online store success with jodie minto

Season 1 - Episode 9

This week on the podcast, I breakdown metrics to measure in your eCommerce business.

Although most of us start our own stores to express our creative side, being on top of the analytical side of your business is super important!

Understanding this will ultimately help you to scale your online store to success.

 So grab a pen and listen in!

xo




Show Notes:

Resources:

Wayflyer:

https://www.wayflyer.com/

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This episode is brought to you by my 12-week course and group coaching program Online Store Success which opens again very soon.

Online Store Success is for those looking to triple their traffic and skyrocket their sales on their online store. My speciality is fashion, lifestyle and childrenswear stores but many of the strategies I teach apply to all types of ecommerce businesses. 

Online Store Success is my signature program and the only way I currently work with coaching clients. It couples small group coaching with weekly calls and a private Facebook community as well as a jam-packed learning hub with over 50+ videos covering everything from branding, to social media marketing, to getting your products made, taking your own product photos, to Facebook, Instagram, Google and Tik Tok ads!

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Show transcript

Hello, and welcome to this episode of online store success with me Jodie Minto. Today we are talking about the metrics and analytics you need to measure on your online store. I know this sounds kind of boring and a little bit dry. However, as business owners, we really need to be able to wrap our head around these numbers because inside of this data, and these analytics as there’s so much gold, and information on how we can scale our sales. 
Often when we launch our online stores, it's because we have this beautiful product or idea that we want to share with the world. And we're coming from a really creative space, we're all about the website design and colours for our logo and fonts and things like that. But once we've started making sales in our business, we need to be able to look at this and understand our analytics and our metrics in order to know what's working and what's not. 
We need to wear many hats as an online store owner. And it's not just that creative visionary one, which most of the time is where we fall into. I know I'm more of that kind of creative and visionary, and I love marketing. But the numbers side of things is sometimes not the most exciting part of my business. But once you manage to understand them and know which numbers you need to be paying attention to, it becomes more fun, I guess you could say in that you can go in and get insights into what out of all that hard work you're doing in your online store, in your business, what's working and where you could make more sales. 

So understanding your analytics and metrics is absolutely crucial, because like I said, they contain such powerful insights as to the next steps we should take. I know I often will come to the office and sit in front of my computer and think, What am I going to do today? What should I be focusing on today? Should I be doing Facebook ads? Should I be looking at the next collection? Should I be looking at email EDMS for this week? Like where should I be focusing? So by coming in and looking at our analytics on a regular basis, it will tell us where we should be focusing our time and energy. 
Now, I would love for you to save this episode, download it to your phone. So you can come back to it when you have more time. If you're in the car or driving, or at the gym right now and you don't have a pen and paper, I want you to come back to it another time when you do have a pen and paper handy. So that you can take down these notes. And I'm going to share with you the metrics that are most important to pay attention to. I'm also going to share some of the industry benchmarks and what my metrics are for iland co. so you can compare and see where you sit. So it is I know, like I said, the analytics and the number side of things is often people's least favourite part of the business. But once you are confident knowing what you're looking at, you will find that you start to enjoy it more. And you will be able to make better, more informed decisions on what you should be doing next in your business. 

Okay, let's get started. The very first metric, and probably dare I say one of the most important metrics I want you to be all over and checking on a monthly basis is your conversion rate. So I spoke a little about our conversion rate in my last episode. So do go back and watch that, or sorry, not watch that, listen to that if you like and want a little bit more insight into that. But what our conversion rate is, is the percentage of visitors that actually buy or convert on our website. This is your number of sales divided by the number of visitors over a space of time. I look at this on a monthly basis, you can look at it, you could look at it on a weekly or even a daily basis. But I wouldn't suggest looking at it on a daily basis unless you're getting lots and lots of visitors because it might not give you enough information on a day to day basis or even maybe on a weekly basis. Unless you're getting 1000s of visitors to your website a day. So if you're, you know your traffic isn't huge, I'd suggest looking at this on a monthly basis to see what your conversion rate is. The idea here is to consider whether or not it's drastically changed month on month and if so, doing some problem solving to figure out why. 

Now, an industry benchmark for a good conversion rate for Ecommerce is 2 to 3%. So that means for every 100 visitors that come to your website, if everything's going well, you can be happy if you're getting two to three orders from those 100 visitors. I can tell you in all honesty that that number is actually hard to achieve and for iland co. We often sit around 1 to 1.5. If we hit 2% I am happy. Now there's many different things that can affect your conversion rate. And often these are things that are outside of our control. And what I would also recommend to you is to check your conversion rates per country. Because for iland co. I am currently running ads to Australia, New Zealand and the US. And from time to time, I think, oh, you know, we haven't, you know, there hasn't been many sales for, say, New Zealand for a while. And I'll go in and have a look at my analytics, both in Shopify, in Google Analytics, and even in Facebook ads and see what's going on. Sometimes, you know, I'll look at it and New Zealand will have a really high conversion rate, and we'll be sitting at 2 or 3%, while Australia might be at 1%. And the US might be at less than 1%. And I think, right, okay, well, that tells me I need to spend some more time and effort in dollars marketing to New Zealand because I know that for every 100 visitors from New Zealand, 2% or 3%, will buy. So knowing even by country, what your conversion rate is, will give you lots of valuable information as to where you should be focusing your attention and your marketing dollars. Now, like I said, there's elements within our business that we often can't control, which will affect our conversion rate. For example, if you've sold out of your best selling product, or if it sells out quite quickly, or if you've sold out of your most popular sizes, that will definitely affect your conversion rate in a negative way. 
On the flip side, if you all of a sudden, you hold a store wide 50% off sale, and you've just sent out an email and promoted on social media, your conversion rate will look a lot better, because you're offering a great deal. And you will find that those people that come in across are more likely to buy because you've got everything on sale. Now, I'm not suggesting you go out and do that. But just know, on those days that you are offering some sort of flash sale, you will probably find that your conversion rate is higher. 

So that's why I recommend looking at it over the course of say, a week or fortnight or a month to see if there's any, you know, information there that you need to know. Also, you can consider and you can find this inside of Google Analytics, what landing pages have the best conversion rates. So you might find that you're running ads, for example, to certain products, maybe you're sending them to the homepage, or maybe you're sending them in some ads to a collection page and in other in other ads, you're sending them directly to the product page, you might discover that there is a high conversion rate for a specific landing page. And if that's the case, you would then go and edit your ads to send them to those winning landing pages, whether that happens to be the collection page or the product page. So understanding your conversion rate across the board for your online store is really important, but then breaking it down to different pages of your website and different locations and countries. And even you could break it down into age categories to see where the gold is, where you can go and and hit that switch and attract more of those people that are more likely to convert. 
 
Okay, so conversion rate, that's our first metric that we need to understand. The second metric I want you to be all over is your average order value. This is exactly what it says: it's the average order amount or CART value over a certain period of time. To calculate your company's average order value, simply divide the total revenue by the number of orders. Knowing this dollar amount is so powerful when you start to embark on paid advertising. 
Because if you know your average order is say, in my case for iland co. it’s $180, you can then decide on how much you are willing to pay to get a sale. So say for me, say for an example, just to round up to an easy number, let's say my cost of product on $190 Order is $50. That means I've got $130 profit to play with from that sale in order to get the sale in the first place. So perhaps if that's your if you're in a similar situation, and you've got $130 to play with spending $78 on a Facebook ad to get that sale still means that you have profit left and not only have you got profit left, you've gained a new customer who hopefully will come back and buy from you again and again.

Ideally, you'd be working constantly on increasing this average order value so that you are increasing not only your profits and your revenue, but you're giving yourself more fat in that sale, more profits to be able to go and invest in other areas of your business, especially marketing. A great way to increase your average order value is to look at things like bundle offers, perhaps it's like buy one piece get the second half price, those offers that you often see at the checkout. So when you add in one item, it pops up and says, How about adding this matching accessory or something like that. For iland co. we actually offer this pop up. And we offer a Hollywood tape, which is a double sided tape that you can use to keep your kimono in place and from falling off your shoulders. And it works great. Maybe it's for you, it's slowly increasing your prices on new products as they come out knowing the cost of the marketing, and how much it costs you to get that customer which I'll talk about next. Knowing that if the prices are rising to acquire new customers, you also need to look at increasing the average order value so that you are still in a profitable situation. 

Now then the third metric I want you to understand and be comfortable with is your returning customer rate or your repeat customer rate. For me inside of Shopify, I can see this inside of my analytics. I think the top plan, I'm not Shopify Plus, I'm just a regular Shopify, but I can see this inside of there. I think it depends on which, which plan you're on with Shopify as to how many metrics you can actually see. But I can see this returning customer rate. And for me, it says that mine over the course of the year is around 30%. We want this rate to be possible because it means we're doing a good job at retaining our customers and inviting them to come back again. And again. However, if it was more than 50%, so for example, your analytics told you that your returning customer rate was a 90 or 100%, I would suggest that you need to balance that out with existing and repeat customers and new customers. So you would need to look at some marketing strategies to keep acquiring new customers as well as servicing your existing ones. Like I said, iland co. rate is around 30% for the year to date, when I just jumped in and had a look now, which is pretty good. You know, there's room to improve, we predominantly still mostly sell kimonos. And I do understand snd I'm aware that not everyone needs a whole wardrobe full of 35 different components.
So we're in the in the process of developing new products, blouses, pants, tops, dresses, all those different things and things that you can wear together with the kimono in order to look at not only increasing our average cart size, order our dollar value per order, but our returning customer rate having new things for our customers to come back and buy from us. So they're knowing what your customer return rate is, is really important. Because again, if you know that your customers are coming back time and time again, that means that you can afford to spend a little bit more money in marketing dollars to acquire them in the first place. 

Okay, our fourth metric I want you to be aware of, and if you can calculate this one, awesome, but it's a little bit trickier than the others that I've just talked about. So I'm talking about the lifetime value of a customer. If you ever speak to a marketing agency, or a numbers person, or you know a Facebook ads person, they will probably ask you what your lifetime value of a customer is. Because we know exactly how much we can spend to acquire the customer in the first place. The tricky thing is though, that with this metric, it's not that clear cut or easy to calculate. It doesn't tell me this inside of Shopify, it possibly tells me inside of Google Analytics. But I use a different dashboard called Wave Flyer and I will link this in my show notes that actually pulls this information in for me, but let me come back to that.

So understanding and calculating this is quite tricky. Because more often than not, we're pretty new in business. If you're, you know, only been in business for 6 to 12 months, you won't have enough data to be able to tell you what the lifetime value of a customer is. And also I like I said it's not it's not totally clear cut. This would probably be easier to calculate if you had a subscription style business where people were ordering from you every month, or every three months. If you sell a product that's a consumable, say for example, skincare, or I don't know protein powders or something like that. Your lifetime value of a customer is probably a bit healthier than say a fashion business and again, the fashion business for me that's very niche, and at the moment and really only focusing on one sort of style of product. But if, for example, you knew that your lifetime value of a customer was $1,000, or $2,000, that means you can spend a bit more money getting them to become a customer in the first place, knowing that you will make up the profits and the sales over the long term.

Now, like I said, I use a dashboard, called Wave Flyer. And like I said, I'll put it in the show notes. I'm not affiliated with them in any way, I'm a customer of theirs. But it is a free dashboard, or it was when I joined, where you go in and you can link your Shopify store, your Google Analytics and ads and your Facebook ads. And it calculates this for you. So I can log into this w and it tells me lifetime value of a customer and I can see it there. They actually their business is inventory financing. So once your business gets to a certain revenue point, and off the top of my head, I think it was about $10,000 in revenue a month, you can actually apply for the inventory financing. But I won't go into that because like I said, I'm not, I'm not affiliated with them, you can chat with them. But their dashboard is free. When I signed up, it was free. And if nothing else, I jump on and have a look at their dashboard, because it is awesome. And it tells you some of these harder metrics. It has this dashboard that plugs everything in and tells you what they are.

Now the final metric I want you to look at is your customer acquisition costs. So I've touched on this already. But how much does it cost you to gain a new customer. Again, this metrics difficult to calculate on its own, it doesn't tell me this inside of Shopify, or even in Google Analytics, it does on this Wave Flyer dashboard, however, because in order to calculate what it costs you to acquire a new customer, it needs to pull in all of that information from your advertising, spend channels. So whether that's Facebook ads, Google ads, all the different places that you might be spending money, it needs to bring in all of that information to be able to create an average of what it costs you to acquire a new customer. Right now the way flyer dashboard is telling me my cost per acquisition for iland co. is $78. Now this is higher than it has been in the past and higher than I'd like it to be. But it is also a reflection of the costs in Facebook after the iOS updates and whatnot. But I'm constantly looking at that, you know, for me where my advertising dollars are spent and seeing how I can reduce that. And not only reduce it, but if I can also increase the average cart value. That means okay, if it cost me $78, but now my average cart value is $250. That's okay, I'm willing to spend that. So like I said, if you know, for example, that previous metric, where your lifetime value of his customer is, say $1,000, and my returning my returning customer rate is high, I'm happy to spend $78 on that first order to acquire that new customer in order to then make $1,000 in sales over time, because that's where I'll make my profits.
 Now, I hope these metrics were helpful to you. I really, really encourage you to look and investigate where you're sitting with your online store, and also put on a calendar reminder to check these on a monthly basis. Because, again, they give you so much insight. And when those days when you sit in front of your computer and you feel like nothing's working, you can simply go into Google Analytics and say, right, you know what is working sales to New Zealand, the conversion rates really high, I'm going to spend more money there, or you know what my conversion rate for the US is really low, I'm going to wind down the advertising dollars to them. There's so much insight inside of these metrics that will give us information in order to pull the necessary levers in our business to accelerate our success. So I really hope and encourage you to have a look at these metrics. Check them out on a regular basis. And I will see you next week in for the new episode. So I encourage you to go away and have a look at these metrics. And I cannot wait to chat with you again. Same time, same place next week. Bye for now.




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My mission is to help other emerging fashion entrepreneurs crack the code of eCommerce success for a life of uncapped income, flexibility and fun.

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