Hubspot recently shared an ultimate list of marketing statistics for 2018, and reported that only 22% of businesses are happy with their conversion rates. Only 22%.
Of course, most businesses desire astronomical conversion rates - but a well educated entrepreneur is aware of what a fair conversion rate looks like. There are many ways to try to tweak aspects of a website and marketing strategy to improve a conversion rate and increase sales, but most companies miss the following considerations when conducting the necessary analytics to make these educated changes. Here are the most frequent mistakes companies make when it comes to analyzing their ecommerce analytics:
1. Most companies place an emphasis on sales rather than tracked customer behavior.
It seems reasonable to analyze the performance of a company based on sales, right? But, solely placing focus on which products are doing best negates the role the website plays in the buying experience for a customer. Companies should instead install heat maps on their website’s pages to understand customer behavior when they online shop.
For example: If a cell phone case company is solely focusing on the recent increase in sales on their hard-cover case, they may promote it as a bestseller on their homepage. But, imagine that their heat map shows a majority of customers take time to look through the leather case options, but never add one to their cart. This is critical information that a company cannot find by solely looking at sales.
2. Most companies assume rather than research.
In the phone case example, there are a number of assumptions that the company may make about the behavior, such as, “Our customers must prefer hard-cover cases over leather cases in the summer months.” While this may sound like a legitimate reason, it’s only an assumption. Talking with customers to understand their behaviors beyond the analytics is a crucial step that many companies miss.
In this example, perhaps the customer base would prefer to buy a real-leather phone case at the price point of their other products, but the company only sells synthetic leather cases, which is negatively impacting the conversion rate. Analytics must go beyond assumptions and take companies into the field to speak to their customers. It’s the companies that listen to their customers that outperform the competition.
3. Most companies focus their attention on all potential customers rather than their few committed ones.
Many companies seek to cast a wide net to many potential customers, thus focusing their online shopping experience to appease first time shoppers. But, the lifetime value of repeat customers is significantly higher than the lifetime value of an average customer, so tracking repeat customers in e-commerce analytics is a must.
Understanding repeat customers’ motivations and behaviors in navigating the site can lead to masterful placement choices to ensure they have the best shopping experience and continue to up their lifetime value. It’s the repeat customers who are doing more than just browsing. They are most easily tracked through payment methods, coupon codes, and purchase history.
4. Most companies compute absolute difference instead of relative difference.
One of the most common e-commerce analytics mistakes is in the math! Imagine that the cell phone case company is analyzing their conversion rates on their wallet cases from April to May, and have noticed that it went down from 6% in April to 4.5% in May.
The analytical mistake is to call this a 1.5% decrease, because that would be the absolute difference, and truthfully, doesn’t sound that major. However, the relative difference is calculated by dividing the difference (1.5%) by the original conversion rate (6%) which would equate to a 25% relative decrease. The difference between a 1.5% and 25% decrease is significant, and this simple math error could incorrectly shift priorities away from analytics that should alert the company to potential red flags.
It can overwhelming to analyze the vast array of numbers and analytics when managing an ecommerce company, but by being conscious and aware of these typical oversights from most companies, you’ll be at an advantage in analyzing and re-adjusting your strategies for a more successful quarter.