Ecommerce Marketing Analytics 101 for Beginners

In this video, I, Ben Mellor, am going to help you gain a better understanding of your e-commerce and marketing analytics. By understanding these analytics, you can improve your sales and expand your customer base. It's important to have a good grasp on the actions your customers are taking online so that you can serve and engage them better. This guide will teach you the relevant terms and numbers that you should be paying attention to. Once you know how to analyze your data, you will have the tools to make informed business decisions and foster growth.

Analytics play a crucial role in validating your business. When you're just starting out, it's essential to validate your business idea and determine if people are willing to buy from you. The metrics we will discuss in this guide can help answer these questions. Let's dive into our analytics dashboard. By the way, you can easily link your Google Analytics to your Shopify store.

Let's begin with returning visitors. This metric measures the percentage of users who come back to your site after their initial visit. A high percentage of returning visitors indicates that people liked what they saw. According to our research, a good ratio of returning visitors is anything greater than 20%.

Next, we have time on site, which represents the average amount of time users spend on your site during a visit. The amount of time can vary depending on what you're selling, but in general, a longer time on site indicates a positive user experience. According to our research, anything more than 120 seconds is considered great.

Pages per visit measures how many pages customers explore on your site. If customers visit four or more pages per visit, it shows a high level of interest in your products and your business as a whole.

Now, let's talk about bounce rate. Bounce rate refers to the percentage of users who visit your store and leave without taking any other actions. It's like arriving at a party, realizing it's not your scene, and leaving immediately. A high bounce rate indicates a poor first impression. It could be due to factors such as poor design, slow loading pages, or irrelevant content.

These metrics can help you determine if you have a viable business idea. Once your business is validated, you can shift your focus to acquiring customers. This is where the following metrics come into play.

Let's discuss customer acquisition efficiency. This metric focuses on minimizing your marketing expenses while maximizing customer acquisition. Marketing is often one of the biggest expenses for e-commerce businesses, so analyzing these metrics is crucial. One key metric is the conversion rate, which measures the percentage of visitors who make a purchase on your website. A low conversion rate indicates that you're spending time and money on acquiring customers, but they're not converting into sales. The ideal conversion rate varies depending on the industry and the type of product you're selling. It's best to research industry standards or consult Google for specific guidance.

Page load time is another important metric to consider. Our study shows that page load time can impact up to 16% of your revenue. People's attention spans are decreasing, and they become frustrated if a page takes too long to load. Monitoring your average page load time in Google Analytics is crucial. Aim for a load time of under two seconds. Oversized images are often the culprit behind slow load times. Use free online tools like Pixlr to resize your images without compromising quality.

Customer acquisition cost is a vital metric for evaluating profitability. If your spending exceeds your earnings, your business won't survive. Customer acquisition cost measures the amount of money spent to acquire each customer. It's calculated by comparing your marketing expenses with the number of sales you make. For example, if you spend $10,000 on Facebook ads per month and generate 1,000 sales, your monthly customer acquisition cost is $10. However, it's crucial to consider the customer lifetime value when evaluating profitability. Customer lifetime value refers to the total amount of money a customer spends with your business over their relationship with you. Comparing your customer acquisition cost with the customer lifetime value helps determine if your marketing efforts are profitable.

Lowering customer acquisition costs can be achieved through various strategies depending on your unique situation. One recommendation is to hire an ad specialist who can optimize your advertising campaigns. If you're running ads and not achieving results, educate yourself or seek professional help. Lowering acquisition costs while increasing results is essential for sustainable business growth.

If you want to dive deeper into the key metrics for establishing and growing your online business, we have a free ebook on e-commerce analytics for beginners. Check the link in the description box for more information.

For larger businesses in the scaling phase, certain metrics are essential for driving sales growth. Average order value is a key metric to track as it helps sell more items or higher-priced items, improving overall business performance and efficiency. Unique visitors, while important, shouldn't be the sole focus. It's crucial to also consider the number of transactions and revenue. These metrics provide the ultimate measure of performance during the scaling phase. To track these metrics effectively, consider using a spreadsheet and regularly analyzing your data. Aim to constantly improve and outperform previous weeks.

If you're serious about starting an online business, I highly recommend signing up for Shopify. Shopify offers an easy-to-use platform and a free 14-day trial to get started. With powerful features and a wide range of free apps, Shopify simplifies marketing for your business. Click the link in the description box to begin your business journey and take advantage of the free trial.

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Thank you for watching. I'm Ben Mellor, your host, and I'll see you in the next video. Bye!

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1. What are some important metrics to analyze in e-commerce and marketing analytics?
2. What does the returning visitors metric indicate about customer engagement?
3. How does bounce rate impact a website's performance?
4. How can businesses determine if their conversion rate is good or bad?
5. Why is customer acquisition cost important in determining profitability?