Online Success - Measurable –Indicators of Success
What are the most important indicators and key numbers that can be used to measure the success or failure of internet-based sales?
These are important questions that you will be faced with if you want lasting success with an online sales model. In the end you will want to know if your company is successful or not in selling online. Unfortunately, many business people are still judging the efficiency of their online store on the basis of subjective estimates. In doing so, the success of eCommerce sites is often overestimated – or incorrectly underestimated. Simply being online is no guarantee of success when there are millions of other stores. And the sheer numbers of visitors to your site says just as little about the success of your store.
For this reason, an internet-based sales system always includes efficient and transparent measurements which make it possible to objectively judge success based on reliable information.
The following rule of thumb applies:
The higher the net margin, ratio of regular customers, the turnover per customer and the conversion rate is and the lower the acquisition costs for new customers are, the more efficient your online business is.
We recommend a web analytics system be used to track results. This could be Google Analytics as an example or we use and recommend the “etracker” Web Analytics which allows you to keep an eye on the most important key figures and can measure and judge the performance of your store at any time – all relevant data is generated and clearly displayed at the click of a button.
You should also ask your eCommerce solutions provider what business reporting tools are available to track items like best selling product, basket drop out, revenue by demographics and even revenue via social networks. The influence of social networks like Facebook and Twitter on your success needs to be measured as you will need to allocate valuable time to maintaining the social network content.
The following overview shows the key indicators of success that you should regularly retrieve and continually evaluate for your online sales activities:
|Good performance||Poor performance|
|Ratio of regular customers||High||Low|
|Turnover per customer||High||Low|
|Costs for new customer acquisition||Low||High|
These “hard”, distinctly measurable indicators of success can be use to clearly differentiate successful online stores from less successful ones. You should always keep an eye on these key figures if you want long-term and lasting success.
You can help yourself to be more successful and get return buyers by offering coupon codes with the order confirmation that can be redeemed at the next purchase online.
Many potential customers use the internet to help themselves make a purchasing decision and then don'’t buy “online”, but “offline” in a bricks and mortar store instead. This “offline” turnover induced by the eCommerce site is often not assessed by companies with both a virtual and physical presence. The “offline purchases” generated by the eCommerce store should always be taken into account when assessing online operations because in the end it really does not matter where your customer made the purchase.
Another key indicator of success is the increase in customer satisfaction through improved service and special offers for regular customers. In the long-term, this increase in customer satisfaction will also be noticeable by improved customer relations and ultimately by rising turnover per customer.
One easy way of gaining an understanding of the offline conversions is to offer coupons that visitors can print from your website and take instore to retrieve gifts, discounts or special offers. The regular assessment of customer satisfaction, e.g. through surveys or customer feedback forms is a must for every online merchant.