The online retail market is developing at very fast rates and customers are searching for more engaging content and highly personalized retail experiences. If you don’t want to be left behind the competition, you should start to question your understanding of your prospective customers’ behaviors and preferences.
What products should appear first on your listing? How best can you adjust your e-shop to your main customer segments? Is your marketing strategy is working as expected? You can’t possibly answer these questions without putting website analytics to use.
PrestaShop understands the importance of web analytics and supports tracking of some metrics in the platform itself, however, you should definitely track as much information as you can to make better-informed decisions for your business. To do that, there are many Google analytics integration modules for PrestaShop to choose from. We think this tool offers plenty of analytical possibilities.
To save you some time when using this tool, in this article we’ll share our thoughts on the 5 most important website metrics that you should start tracking on Google Analytics.
1. Conversion Rate
A conversion can refer to any desired action that you want the user to take. This can include anything from visitors signing up to your newsletter list or making a purchase and becoming your customers. Generally, conversion rate is the number of conversions divided by the total number of visitors. For example, if an ecommerce site receives 100 visitors a month and has 10 sales, the conversion rate would be 10 divided by 100, or 10 %. Of course, the numbers usually aren’t that high in e-commerce businesses – the industry average is about 2% of visitors converting to your customers. If your conversion rate is 2% or higher it’s a good indicative of successful marketing and good e-shop design!
Even though you can calculate your conversion rate by dividing sales made by total traffic in your eShop (which is tracked by PrestaShop itself), setting up conversion rate tracking in Google Analytics will let you see which traffic sources and channels (i.e. Facebook, Instagram) bring visitors that convert best. This is invaluable for improving your business strategy.
2. Customer Lifetime Value
CLV is an estimate of all the future profits to be accumulated from a relationship with a given customer. This is the overall revenue you forecast a customer to bring you during their lifetime or span of time as your customer. It is used in the business to measure the performance of retention strategies and to provide insights into how much money should be spent on customer acquisition.
Sometimes, this metric can be difficult to track for businesses because of varying variables, however, to calculate LTV, you need to find out your average order value, purchasing frequency, customer lifespan, and profit margin.
3. Customer Acquisition Cost
This is the cost associated with “convincing” a consumer to buy your product or service, including research, marketing, and advertising costs. CAC measures the amount of money you’re spending to acquire each customer. Since customer acquisition and retention are the main expenditures in e-commerce, if your CAC is higher than the lifetime value per customer, you will be operating at a loss.
The calculation helps a company decide how much of its resources can be profitably spent on a particular customer and what marketing channels are contributing the most to bringing new customers for each dollar spent. CAC can be calculated by dividing all the costs spent on acquiring customers by the number of customers acquired in the period that the money was spent in.
4. Bounce Rate
This type of web analytics measures the behavior of visitors to a website or page within the website. To bounce from a website is to leave without interacting or visiting another page on the website is considered a 100% bounce rate for that session.
The bounce rate provides information on the behavior of a website’s visitors, and in turn how well the website is engaging them.
It is one of the most important metrics by which shop owners can understand how well their website is performing. Bounce rate analysis isn’t complex. It can be widely different depending on the source of traffic and the pages that they are first “landing on”. For example, it’s likely that the search traffic will produce a low bounce rate while social media might produce a higher bounce rate. In this example, a higher bounce rate can be solved by creating special pages for visitors coming from social media channels, improving your overall shop bounce rate and thus creating a better chance for more conversions.
Once you are familiar with tracking bounce rate, another important metric to have in mind is Shopping Cart Abandonment rate, which you can track on PrestaShop platform, but we’ll get back to that later.
5. Return on Ad Spend
Return on ad spend (ROAS) is one of the easiest revenue-based metrics to measure. It is simply the total revenue generated for a specific marketing channel (like PPC) divided by the total spend on that channel.
Return on ad spend is a breakdown of total revenue generated by channels such as social media, organic search, paid search, referral traffic and etc. This metric highlights the most valuable sources that direct traffic to your e-shop. It shows which channels are most valuable and where to invest more resources.
When you combine ROAS with previously mentioned CAC, it paints a more holistic picture of a marketing channels’ performance and profitability, letting you make better decisions.
To achieve success in a highly dynamic market, e-shops must be able to stay one step ahead of their customers. They must be able to predict what customers are looking for in their e-commerce store.
With that in mind, the importance of analytics for e-shops cannot be overemphasized. In this article, we have shared, in our opinion, a few of the most important analytics metrics, which you should consider tracking in your E-shop. Having in mind the easy integration Google Analytics offers with PrestaShop, we suggest you to start tracking your shops’ analytics from today.
And if you need our help in any step of the way – you can email us at [email protected]