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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

18 comments:

Online Survey Software said...

Wow, incredible blog layout! How long have you been blogging for? you make blogging look easy. The overall look of your site is magnificent, let alone the content!

Damian Bathory said...

What we have here is a perfect example of what happens when every piece of the puzzle fits together. It takes time, but finding the right people, market, and even epos system is all worth it in the end.

Mickey Blue said...

A feedback is one important aspect of measuring an online success. The seo company adelaide uses feedbacks as a means of knowing their productivity, efficiency, and customer satisfaction.

Sophie Atkins said...

Yes, by knowing the feedbacks from your clients, you can tell if you are successful with your business. My small business coach also told me that before I start planning for my business.

David Brucker said...

Great point talking about offline turnovers as well. I think it's also one of the major factors that really affect the net margin of an e-commerce site as a whole.

Britney Palmer said...

Keep up the fantastic work, I read few posts on this site and I think that your blog is very interesting.

Online Survey Tool

Dave Thomas said...

Knowing your client's feedback gives you an edge in the business. That’s why it is always advised to keep in touch with your readers. It is where you build trust between you and your readers and when the trust is being built, that’s the time you gain more customers..

Dave Thomas said...

Knowing your client's feedback gives you an edge in the business. That’s why it is always advised to keep in touch with your readers. It is where you build trust between you and your readers and when the trust is being built, that’s the time you gain more customers..

Heather Francisco said...

Tracking your business by knowing or collecting feedback from your clients can give you an edge in your business. E-commerce business will not work without knowing your client’s wants and needs; you should always find time to get in touch with your clients to build a good relationship and at the same time, to boost your sales.

Gabriel Bennette said...

Yeah, I totally agree with you there Heather, the very reason why I think they've created a level up standard called ecommerce fulfillment services online to make sure they are satisfying the needs and wants of their clients. Also to make the client trust you, you must show them how sincere and how passionate you are on working with them just to satisfy what they want.

Wes Aaron said...

I will always keep in mind that your net margin, ratio/turnover of regular customers and conversion rate means you have an efficient online business. I'm planning to make a simple online store for baked goods. I'm helping out my mom with his hobby and I also take advantage of it.

Susannah Duncan said...

Starting up an online business is harder than it appears to be. One would've thought that he'll just have to log in, create a site, post his goods and then wait. How wrong I was. There are a lot of stuff to consider and take care of: website utility, fulfillment services, storage and logistics, credit card acceptance, fraud prevention, among other things. It was a slow and complicated start for me but thankfully everything are now staring to fall into place.

Sarah Smart said...

Perhaps for now, we can say that what online setting has given to us is still measurable, but maybe later or sooner we may no longer take count on what benefits internet had given to us. Like for me, booking of flights to Laoag, which is my hometown, has become a lot more easier compared to before's long queueing process.

Fatna Lolkema said...

A company should regularly do a survey so that they will know if they are doing well. Business is always two sided so they should balance out things on a regular basis.

Eve Richards said...

One good implication of an online business being a success is when the public started recognizing how trustworthy they are. Also online shops and markets are booming because it's just so convenient and the processing is just so easy and the stuff they've ordered are delivered to their doorsteps right away.

Bookkeeper Caloundra said...

Hi John,

Thank you for the information. And I think this will help us to be successful in our online business.

Christopher Hatfield said...

Good topic John, Customer satisfaction drives business results. Several studies have demonstrated that satisfied customers will be more loyal, more likely to purchase product, more willing for you to recommend it to people. Satisfied customers directly impact your net profit. Thanks for sharing your knowledge about this topic, it's good to gain input here.

Martha Flat said...

I agree Susannah starting up a new eCommerce site you can run into a bit of the unexpected such as all of the above you've mentioned. One in particular I had lots from was fulfillment services. I really had no clue as to how much work this would be and to mention expense =(