The Metric Every Online Retailer Looks At But Shouldn’t

July 13, 2016
Matt Forman

Context is a funny thing. It can take an outcome from zero to hero without really changing anything about the result. Instead, context provides a clearer view of the circumstances, which lead to the outcome, allowing you to evaluate it beyond just the end result.

What if I told you that there’s one metric that almost every eCommerce manager looks at, analyses, reports on and potentially loses sleep over that means absolutely nothing? That is, until you add some context.

 

Ecommerce Conversion Rate

As a standalone metric, Ecommerce Conversion Rate conveys very little about how your site, and beyond that your marketing activity, is performing.

Ecommerce conversion rate
Consider 100 people came to your site but only one of them purchases…if you look only at the Ecommerce Conversion Rate by default you will make the assumption your site is converting at 1%. Maybe there’s a conversion issue? Maybe your user-experience is all wrong? Or maybe there’s a problem with your product?

Let’s look at the same equation but add some context. 100 people come to your site in an off-peak period, one of whom purchases directly, 15 visit from Facebook and read multiple blog pages and sign up to a newsletter, 12 users use the store locator on your site and visit your bricks and mortar shops and another four contact you via the phone number on your contact page.

All of the sudden, with some broader context your site’s ability to convert isn’t looking so bad, your user experience is working well and helping users learn more about your products and navigate from the very early awareness stages of the purchase journey through to eventually purchasing.

 

What Should You Be Looking At?

Realistically there is no single report in Google Analytics that will tell you everything you need to know but from a channel perspective the Acquisition Report broken out by Source / Medium is a good place to start.

Source medium
We talk a lot about comparing like-for-like and through this Source / Medium report you can start to do that. Consider the role each of your channels plays in the purchase journey from introducing new people to your brand (Facebook, Instagram, Display Advertising) to capturing and converting leads (Google CPC, Facebook Remarketing, Bing) and evaluate performance accordingly.

The next step is better understanding the role each of those channels play in the path to conversion and what would potentially happen to that journey if that channel didn’t play it’s part.

Access the Multi-Channel Funnels – Top Conversion Paths report in your Google Analytics. This report provides a very visual representation of how the overall path to purchase plays out from a touch point to touch point basis, each channel has its’ role to play and without that, the journey potentially collapses. Our top tip is to then filter this report by Source / Medium to give you a really clear view on what activity is driving the traffic.

image3
The above paths to conversion are a good example of how each channel plays an important role in the purchase journey without necessarily resulting in a direct conversion.

What metrics do you find most valuable for your business and why? We’d love to hear from you.