eCorner

eCorner
Secure eBusiness Solutions

Saturday, 28 July 2012

Selling Onlines - Indicators of Success


Online Success is 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.  
A mistake that is often made is to think that appearance is more important than usability or capability. We have seen online businesses fail because of the store owners subjective opinion versus the objective view of the visitor.

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 and reporting system be used to track results. This could be Google Analytics or our own Wagtail Analytics as examples or any tool 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.

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
Conversion rate
High
Low
Costs for new customer acquisition
Low
High
Net margin
High
Low
Uncompleted orders
Few
Many
Customer satisfaction
High
Low

These “hard”, distinctly measurable indicators of success can be used 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.

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. The regular assessment of customer satisfaction, e.g. through surveys or customer feedback forms is thus a must for every online merchant. 

It is very easy to ask a customer who just bought from you what they thought of the process and what would make them buy again. Most people that buy from you will truly appreciate that you reached our and asked for their opinion.

Remember you can always improve. Often it is the small things that make the big differences.

I wish you success selling online.

John