metrics for online retail (shopify/.co/luxr webinar)
DESCRIPTION
We discuss the three key metrics that online retailers should be watching and pushing and why they're important. We also cover a simple framework for making experiments to help drive those numbers.TRANSCRIPT
March 5, 2014
Metrics For Online RetailersShopify’s Build a Business Competition
Janice FraserJason Fraser
© 2014 Luxr Incorporated www.luxr.co
Jason FraserFounderMaster Coach
© 2014 Luxr Incorporated www.luxr.co
Who is ?Supporting entrepreneurs worldwide
Video based curriculum
Short video workshops
In-person workshops around the world
© 2014 Luxr Incorporated www.luxr.co
Follow Us
@luxrco
Event Hashtag
#retailmetrics
© 2014 Luxr Incorporated www.luxr.co
3 Key Metrics
Acquisition
Conversion
Dollars per sale
© 2014 Luxr Incorporated www.luxr.co
How do I find my numbers?
Google Analytics
has some basic features
© 2014 Luxr Incorporated www.luxr.co
How do I find my numbers?
Buy a clicker!
© 2014 Luxr Incorporated www.luxr.co
How do I find my numbers?
Buy a clicker!
© 2014 Luxr Incorporated www.luxr.co
How do I find my numbers?
Keep a log by the register
Buy a clicker!
© 2014 Luxr Incorporated www.luxr.co
How do I find my numbers?
Keep a log by the register
Buy a clicker!
© 2014 Luxr Incorporated www.luxr.co
How do I find my numbers?
Keep a log by the register
Buy a clicker!
© 2014 Luxr Incorporated www.luxr.co
How do I find my numbers?
Keep a log by the register
Buy a clicker!
© 2014 Luxr Incorporated www.luxr.co
How do I find my numbers?
Keep a log by the register
Buy a clicker!
© 2014 Luxr Incorporated www.luxr.co
Why?
Make informed decisions
Make more money
Move the numbers
© 2014 Luxr Incorporated www.luxr.co
Metrics Pattern
Observe ObserveAct
© 2014 Luxr Incorporated www.luxr.co
AcquisitionHow many people come to your store?
Your Store
© 2014 Luxr Incorporated www.luxr.co
There are many ways to acquire customers
Paid traffic
Mailing lists
Search results
Social media
© 2014 Luxr Incorporated www.luxr.co
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Establish a baseline
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Brainstorm ideas to
drive traffic.
Try one as an experiment.
Establish a baseline
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Using the Pattern
Track the results
Establish a baseline
Observe ObserveActBrainstorm
ideas to drive traffic.
Try one as an experiment.
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!What can you do to get more customers to
come to your store?
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!Just 4 ideas to increase traffic
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!Just 4 ideas to increase traffic
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!Just 4 ideas to increase traffic
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!Just 4 ideas to increase traffic
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!Just 4 ideas to increase traffic
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!Just 4 ideas to increase traffic
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!Just 4 ideas to increase traffic
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
Brainstorm!Just 4 ideas to increase traffic
:15
:30
:451:00
1:15
1:30
1:45
2:00
© 2014 Luxr Incorporated www.luxr.co
ChooseTwo selection criteria:
© 2014 Luxr Incorporated www.luxr.co
ChooseTwo selection criteria:
CHOOSE 2: Most likely to generate traffic
© 2014 Luxr Incorporated www.luxr.co
ChooseTwo selection criteria:
CIRCLE 1: Easier to implement
CHOOSE 2: Most likely to generate traffic
© 2014 Luxr Incorporated www.luxr.co
Make it happen
Get started right away
Put some time in your schedule to do the work
© 2014 Luxr Incorporated www.luxr.co
Using the Pattern
Track the results
Establish a baseline
Observe ObserveActBrainstorm
ideas to drive traffic.
Try one as an experiment.
© 2014 Luxr Incorporated www.luxr.co
ConversionOf the people who visit, how many buy?
© 2014 Luxr Incorporated www.luxr.co
ConversionOf the people who visit, how many buy?
$$MONEY
$$MONEY
$$MONEY $
$MONEY
$$MONEY
$$MONEY
$$MONEY
© 2014 Luxr Incorporated www.luxr.co
Kinds of Conversion
Site visits to purchases
Ad views to site visits
© 2014 Luxr Incorporated www.luxr.co
Conversion Is Key
Wrong target market
Low conversion suggests fundamental problems:
Wrong product for the market
Wrong message
1
2
3
© 2014 Luxr Incorporated www.luxr.co
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Establish a baseline
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Brainstorm ideas to increase
conversion.
Try one as an experiment.
Establish a baseline
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Using the Pattern
Track the results
Establish a baseline
Observe ObserveActBrainstorm
ideas to increase
conversion.
Try one as an experiment.
© 2014 Luxr Incorporated www.luxr.co
Dollars per SaleAverage cart size
© 2014 Luxr Incorporated www.luxr.co
It’s hard to get people to visit your
store.
Make the most of each transaction.
© 2014 Luxr Incorporated www.luxr.co
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Establish a baseline
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Brainstorm ideas to
increase the dollars per sale.
Try one as an experiment.
Establish a baseline
Observe ObserveAct
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Using the Pattern
Track the results
Establish a baseline
Observe ObserveActBrainstorm
ideas to increase the
dollars per sale.
Try one as an experiment.
© 2014 Luxr Incorporated www.luxr.co
Many other things to measure
Customer referrals
Repeat sales
Page views per visit
Abandoned carts
Item views per visit
© 2014 Luxr Incorporated www.luxr.co
If tracking your metrics doesn’t
change your behavior...
© 2014 Luxr Incorporated www.luxr.co
If tracking your metrics doesn’t
change your behavior...
...then there’s no point in doing it.
© 2014 Luxr Incorporated www.luxr.co
Measure Measure Again
Act
Using the Pattern
© 2014 Luxr Incorporated www.luxr.co
Measure
Act
Over and Over
© 2014 Luxr Incorporated www.luxr.co
What’s good?
Set your own goals
What’s good for you?
Do some math
© 2014 Luxr Incorporated www.luxr.co
How they play together
If 500 people visit my store in a day
© 2014 Luxr Incorporated www.luxr.co
How they play together
If 500 people visit my store in a dayAQUISITION
© 2014 Luxr Incorporated www.luxr.co
How they play together
2% make a purchase
If 500 people visit my store in a day
That’s 10 purchases
AQUISITION
© 2014 Luxr Incorporated www.luxr.co
How they play together
2% make a purchase
If 500 people visit my store in a day
That’s 10 purchases
AQUISITION
CONVERSION
© 2014 Luxr Incorporated www.luxr.co
How they play together
2% make a purchase
If 500 people visit my store in a day
That’s 10 purchases
Average cart size is $40
My gross is $400
AQUISITION
CONVERSION
© 2014 Luxr Incorporated www.luxr.co
How they play together
2% make a purchase
If 500 people visit my store in a day
That’s 10 purchases
Average cart size is $40
My gross is $400
AQUISITION
CONVERSION
DOLLARS PER
SALE
© 2014 Luxr Incorporated www.luxr.co
Backtrack to discover what you need
If it costs me $300/day to run my business, I know I need to change
something
If your profit (net of COGS) is 50%, that’s $200
-BUT-
© 2014 Luxr Incorporated www.luxr.co
What do I do?
Increase Conversion to 3%
Increase Acquisition to 750 visitors
Increase Dollars Per Sale to $60
-or-
-or-
© 2014 Luxr Incorporated www.luxr.co
Acquisition: Baseline
10 purchases x $40 each = $400 gross
500 visitors converting at 2% = 10 purchases
$400 gross x 50% = Net of $200
© 2014 Luxr Incorporated www.luxr.co
Acquisition: Improved
15 purchases x $40 each = $600 gross
750 visitors converting at 2% = 15 purchases
$600 gross x 50% = Net of $300
© 2014 Luxr Incorporated www.luxr.co
Conversion: Baseline
10 purchases x $40 each = $400 gross
500 visitors converting at 2% = 10 purchases
$400 gross x 50% = Net of $200
© 2014 Luxr Incorporated www.luxr.co
Conversion: Improved
15 purchases x $40 each = $600 gross
$600 gross x 50% = Net of $300
500 visitors converting at 3% = 15 purchases
© 2014 Luxr Incorporated www.luxr.co
Dollars per sale: Baseline
10 purchases x $40 each = $400 gross
500 visitors converting at 2% = 10 purchases
$400 gross x 50% = Net of $200
© 2014 Luxr Incorporated www.luxr.co
Dollars per sale: Improved
10 purchases x $60 each = $600 gross
500 visitors converting at 2% = 10 purchases
$600 gross x 50% = Net of $300
© 2014 Luxr Incorporated www.luxr.co
This is a way of life that grows your business
22 purchases x $60 each = $1350 gross
750 visitors converting at 3% = 22 purchases
$1350 gross x 50% = Net of $675
© 2014 Luxr Incorporated www.luxr.co
Measuring tells you what, but not why.
Listen to your customers
Talk to your customers
Learn from your customers
Empathize with your customers
© 2014 Luxr Incorporated www.luxr.co
3 Key MetricsAcquisition
Conversion
Dollars per sale
© 2014 Luxr Incorporated www.luxr.co
Why?
Make informed decisions
Make more money
Move the numbers
© 2014 Luxr Incorporated www.luxr.co
Why?
Make informed decisions
Make more money
Move the numbers$
$MONEY
$$MONEY
$$MONEY $
$MONEY
$$MONEY
$$MONEY
$$MONEY
© 2014 Luxr Incorporated www.luxr.co
Metrics For Online RetailersShopify’s Build a Business Competition
Thank you!
Slideshare.net/luxrco@luxrco
© 2014 Luxr Incorporated www.luxr.co
Question and Answer time!