How and by what criteria should online business owners understand that their online store is on the right track? How should they evaluate the success of digital marketing campaigns and SEO strategies? Which data should they pay attention to? Which data should not be important? Apart from the amount of sales of online stores, is there any other measure to evaluate their success?

It is true that online businesses are very different from traditional businesses, but there are also similarities between the two. Business owners 50 years ago were also looking to data to assess their situation – but a different kind of data. 50 years ago, the number of likes, comments, and site traffic did not exist, but the overall figure of monthly sales, the amount of unsold goods, and the number of customers were important and decisive traditional data for businesses.

The access and facilities of new businesses to all types of data in the era of e-commerce or electronic commerce cannot be compared to traditional businesses. Online stores have no problem collecting all kinds of data. In the market and to help businesses, a variety of data collection and analysis tools (software) are offered. It is no exaggeration to say that Internet business owners have far more data than they need to evaluate and make decisions.

So, the important question that arises is which data is more important? That is, which data should be the criteria? In this content, that important question is answered and the most important criteria that businesses and online stores should consider to evaluate their success are introduced.

Which criteria show the success of store websites?

The audience of this content is online business owners, SEO experts and digital marketers. That is, those who operate in the complex world of e-commerce. E-commerce is done on the Internet. But the Internet alone has not made it possible to buy and sell all kinds of goods and services (e-commerce). Buying and selling of goods and services happens in most cases on store websites (Ecommerce Websites).

When everything happens on the site, everything can be recorded. It can be said that the owners of online stores know every movement of the user and every click from the time he enters the site and even from where (which link) he entered the site. Of course, the amount of information that the store owner can have is much more. Which ads did each user click on, which products did each user see, how long did each user stay on the page of a product, how far did the user go to buy a product and stop, etc.

The point is that each of those details and behaviors are effective in the success of the business, but the success of an online store is not determined by the number of clicks or the time the user spends on the product page. The success of a store site is not determined by monthly sales alone. Online businesses are either on the way to growing and getting bigger or on the way to being deleted and forgotten.

So, in the era of e-commerce, there is not only one criterion that determines the stay or elimination of businesses. A set of criteria, each of which is a world full of details in itself, must be considered to evaluate the status of a store website and whether it is successful or not.

The most important criteria for evaluating the success of online stores

There are several criteria that, if the store website has them at an acceptable level, it is on the path to success and growth. It doesn’t matter if you own a store as big as Amazon or you just started your online business, you (owners and decision makers in store sites) should keep a close eye on the following criteria to evaluate the health of your business more than anything else.

1. Sales Conversion Rate

The conversion rate of a user/site visitor to a buyer, expressed as a percentage, is the most important figure (data) in e-commerce. The first and most important question that the owner of an online store needs to know the answer to is this: in a certain period of time (for example, a week), how many people bought from it out of all the users who entered the site (store)? The answer to the question is obtained by dividing the number of users who made a purchase by the total number of users who came to the site in that period of time and multiplying the result of the division by 100.

For example, if your site had 1500 visitors in a week and only 30 of them went through all the steps and bought something from the site, the conversion rate of your store site is 2%. It is natural that the higher the conversion rate the better. But what makes the conversion rate an important metric is not its high rate.

Important points in the review and analysis of the conversion rate of the store site

They review and analyze the conversion rate criteria according to the following:

  • If the conversion rate of an online store is lower than the average conversion rate of similar online businesses in the store’s location (city or country), it is bad and a danger sign for the store owner. The conversion rate of the home appliance store website is different from the conversion rate of the online supermarket. Also, the geography in which the store operates should be taken into account.
  • Keeping the conversion rate constant is more important than increasing it. That is, if the conversion rate of the sports goods store is less than 2%, there is cause for concern and one should look for the causes of the decrease in the conversion rate. It should also be noted that the discussion about improving the conversion rate is very extensive and detailed. However, the business owner, SEO and digital marketing team should be sensitive to lower than average conversion rates and at the same time strive to increase conversion rates.

2. Site traffic

If no one visits the store site, how can the site visitor be converted into a buyer? Without the site having visitors, there will be no conversion and no conversion rate. For this reason, site traffic, which is the number of site visitors, is a very, very important metric.

More traffic does not necessarily mean more sales and higher conversion rates. Because there is no guarantee that all visitors will become buyers. However, store websites need to have high traffic. More visitor’s means more people (potential customers) will get to know the business and may eventually become buyers one day. High site traffic also helps business branding.

How to increase site traffic? The shortest and fastest way is store site SEO. Site optimization for search engines is what puts your store site in front of the user’s eyes earlier than other competitors. One of the most important reasons for the importance of digital marketing and social media marketing for online businesses is that digital marketing directs users from social networks or other platforms and websites to the store site.

3. Customer Acquisition Cost (CAC)

SEO and digital marketing costs money. In fact, introducing the user to the business and directing him to the store website costs money. It may be necessary for the business to pay for advertising in traditional ways in addition to online advertising and advertising reporting. The third criterion that the store site owner should pay attention to is how much it cost to bring each customer to the site.

Pay attention that the cost is not only the amount spent on advertising, but also includes all the costs of business activity (including employee salaries, website maintenance costs, etc.). When the internet business is on the path of growth, it means that it wants to introduce itself to more users and bring more potential customers to the website. So, he has to spend more for his business to attract each customer and also to keep each customer.

On the other hand, in general, the lower the customer acquisition cost, the better. The business owner has different solutions to keep that number down, depending on the type of business. One of the best solutions is social media marketing. Because with various types of marketing in social media marketing (such as influencer marketing, Instagram marketing, etc.), several goals can be achieved. Helping SEO and increasing site traffic, branding, brand awareness, and attracting and retaining customers are among the goals that businesses achieve by spending on social media marketing.

4. Customer Lifetime Value (CLV)

The third and fourth criteria are related to each other. In e-commerce, converting a customer into a loyal customer is much more important and decisive than attracting a customer. A store website needs loyal customers. That is, he should keep the attracted customer for himself and do something so that he visits the site again and again and buys from it.

The fourth criterion is a figure that shows how profitable a customer will be for the business during the time that he remains loyal to the brand and has a relationship with that business. It means how much he can buy from the business.

Online business owners should subtract CAC from CLV. The value of these two criteria is determined here. If the residual profit is too small, considering the industry in which the business operates; The store website is not on the right track.

5. Average Order Value

How much does each customer buy (place an order) from the online store on average? The higher the number, the better it is for online businesses and shows that the online store has been able to get customers to spend more. The average order value (price) is the number obtained by dividing the total revenue by the total orders. Online stores are looking for solutions to make customers buy either more items or more expensive items each time. Store sites usually use tricks to convince customers to buy more: offering similar products, pricing and selling a package of products (bundling) and festivals and seasonal discounts.

Ecommerce business owners should consider criteria 3, 4, and 5 together. In this way, they will get an almost complete picture of the store’s customers, their behaviors and the state of the business. So, they know what decisions to make and what changes to make in the micro and macro strategies of the business.

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