31 Jul 2013

5 Key Day-to-day Ecommerce Functions

Original Article courtesy of  DALE TRAXLER www.practicalecommerce.com

As ecommerce owners, we frequently look for something new to help our businesses grow. This could be a magical analytical tool that deciphers why conversion rates are lower this year than last. Or, it could be a new, exclusive product that becomes a worldwide best seller.

Certainly new discoveries are important. But, we should also execute the basic day-to-day functions that it takes to be successful. Here are five key examples.

1. Search Engine Optimization

I’ve had a few SEO discussions in recent months with ecommerce merchants. I was reminded how much SEO is about content. One of the discussions was about the negative impact of Google search algorithm changes last year on a merchant’s business. Another was with a client who launched a new online store and then suffered a hit on search rankings. Both of them are now looking for the instant solution to fix their problems. The reality is there is no quick fix. Both merchants need to focus on their content and on building relationships with authority sites that will link back to it.

For example, I just wrote a lot of content on a website that did not have any real SEO strategy and was not visible for relevant searches. I researched keywords, ensured that the page structure included H1 and H2 tags, and put in optimized titles and descriptions. I linked related content throughout the site. I bolded key phrases and tried to optimize the keyword density on pages. We republished and prioritized the site map. The results? A week later, we had climbed to the first page on Google for most of the keywords we were targeting. In several cases, we captured the fourth through seventh ranking for different pages on the site.

Was this because I wrote brilliant content? Not really. It’s because I did the basics with SEO to create original content that was optimized separately for each page.

2. Selecting New Products

A key to the success of new products includes trends, price, quality — for the right target audience. Too many ecommerce businesses invest in new products without aligning them to their customers.

When purchasing a new product line, be sure that your customers will buy it. If they are value focused, is it a good strategy to add a high-end product? It may work, but more often than not, you’ll end up selling it on clearance.

Most small ecommerce stores develop a niche. You may not think of yourself as a niche store, but it’s likely that you sell consistently to a similar demographic. Check that for yourself. Ask your customers why they buy from you. Find out what other products they would like to see you sell. Learn as much about them as you can and sell them what they are looking for. You will be less likely to add a dud to your product mix if you really understand your customers.

3. Merchandising New Products

Now that you have invested in new products you are sure your customers will buy, it’s time to sell them. Be sure to write good product descriptions and use compelling photos. Feature your new products prominently on your website. Promote the new items in your newsletter, on your home page, and on Facebook or Pinterest.

Review your sales history and search for customers who have purchased similar items. Send them an email, stating you have a new product that may interest them.

This is basic selling. But all too frequently, new products get buried at the bottom of a new or existing product category.

4. Customer Service

In my previous ecommerce business — selling jewelry and bead products — we emphasized fulfillment accuracy. We made mistakes, for sure. But we took great pains to ensure that what was shipped matched the pick list.

We also learned not to question a customer. If a customer said a product was missing or incorrect, we might ask him to recheck the packing materials, or confirm the quantity. But, regardless, we would refund or reship the missing parts. Likewise, if a customer said she did not receive a package, we would reship or refund — even if we had a delivery confirmation from the shipper.

Why did we do this? It’s basic customer service. Think about your own experience as a consumer, when you experienced problems with an order. You likely wanted it fixed and did not want to discuss it, or argue. When the supplier corrected the mistake, you likely were inclined to reorder. If the supplier disputed your claim, you likely moved on to a new source.

5. Monitor Your KPIs

In “21 Key Performance Indicators for Ecommerce Businesses,” I addressed key metrics to focus on, to improve your business. At a minimum, monitor sales, average order value, cost of goods sold, traffic, conversion rates, abandonment rates, and your cash position.

1 Jul 2013

21 Key Performance Indicators for Ecommerce Businesses

Key performance indicators are becoming common in large corporations as a way to measure and monitor the success of key activities. But they can also play an important role in any sized ecommerce business.

A KPI — key performance indicator — is simply a measure of some process, event, or activity. An example is checkout abandonment, when shoppers exit before completing an order. This KPI should be monitored closely by all ecommerce businesses. If it is typically 10 percent and suddenly goes to 15 percent, that may be an indicator that something is broken on your website, like your SSL or your credit card authorization. By monitoring that KPI daily, you will mitigate the risk of losing business if something breaks.

Establishing KPIs

KPIs differ among businesses. For example, large corporations monitor the time between orders and final payment, striving to reduce that cycle. For an ecommerce business, checkout abandonment is an important KPI and lowering that percentage generally leads to higher revenue.

For strategic and operational planning, KPIs are also used for SMART goals — Specific, Measurable, Achievable, Realistic, Time-bound. As an example, you may want to set a goal to improve your checkout abandonment from 10 to 7 percent in six months. Or, you may want to set customer service goals to reduce the average number of open cases from 10 to 5 in three months.

All businesses should regularly monitor their revenue, cash position, receivables, payables, and basic accounting reports. If you have an inventory and higher-end accounting system, you can also monitor your cost-of-goods sold and gross-profit margins daily. Beyond that, you should monitor pay-per-click advertising performance, social media metrics, email marketing results, and marketplace sales (such as Amazon, eBay) to identify areas of improvement. Virtually any measurement can become a KPI as long as you have a means of capturing the data in a consistent method.

21 KPIs for Ecommerce

Baseline KPIs should always be monitored, and acted on if they deviate from their normal range. KPIs used for goal setting may change, as may the target range of those KPIs.

In my experience, the important KPIs that ecommerce merchants should monitor are as follows.

  1. Unique visitors
  2. Total visits
  3. Page views
  4. New visitors
  5. New customers
  6. Total orders per day, week, month
  7. Time on site per visit
  8. Page views per visit
  9. Checkout abandonment
  10. Cart abandonment
  11. Return rate
  12. Gross margin
  13. Customer service open cases
  14. Pay-per-click cost per acquisition
  15. Pay-per-click total conversions
  16. Average order value
  17. Facebook “talking about this” and new Likes
  18. Twitter retweets and new followers
  19. Amazon ratings, response and order turnaround time, and open cases
  20. Email open, click, and conversion rates
  21. Referral sources: percent from search, direct, email, pay-per-click, other

Your business may have many more than this if you outsource fulfillment, have a high percentage of call-in orders, and so forth.

What’s a Normal KPI?

You may be wondering what the normal range is for these types of KPIs. In general, there is no answer, as every business is different. Develop your baseline over time and become aware of your typical operating ranges.

Once you have established your standard ranges, you can begin to use KPIs to set goals and measure improvement. More than likely you already do that with PPC advertising — with targets for click throughs, cost per acquisition, and cost per click. Perhaps you set targets regularly to improve those metrics. You can do the same thing with all the KPIs listed above.

Make Monitoring Easy

If you don’t have a dashboard that is capable of displaying most of your KPIs — this usually requires a higher-end, highly integrated system — then pull KPIs from all your various monitoring tools and dashboards into a spreadsheet on a weekly or monthly basis. This will provide you with a snapshot of your historical performance that identifies seasonal trends and necessary troubleshooting if KPIs deviate from their normal ranges.

Monitoring Peaks and Valleys

KPIs are also useful to check your normal cycles. In a simplified example, if you suddenly get a bump of new customers and don’t really understand why, you may want to look at your social media activity or referral KPIs to identify new traffic sources. Perhaps your “talking about you” KPI in Facebook is high because of a new product someone is talking up. Likewise, if your gross margins are suddenly much lower, it may be because your cost of goods sold has increased or because more customers are taking advantage of free shipping. In short, use your dashboards or any other tools you can to monitor your KPIs on a daily basis if possible.


Seasoned ecommerce managers can often predict revenue based on the number of visitors, checkout abandonment, cart abandonment, and other factors. More importantly, they can flag problems immediately.

Use your KPIs for setting SMART goals for your business improvement. KPIs can be identified for almost every operational area — from shipping to traffic to conversions. Work with your staff to identify areas for improvement, choose your baseline KPI, and set a target for improvement in a specific timeframe. Then you have a measurable goal.