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Affiliate Tracking - Chapter 1: What is it?

(And why do you need it?)

Shopify & WooCommerce users-

Start optimizing your performance today!

All the data in the world is worth nothing if you don’t know how to use the essence of those numbers and turn them into meaningful information. ‏If you are here you probably already know about KPIs and how important they are for your business. But if this is the first time you encounter this term, we strongly recommend you read more about these game changing factors in businesses’ health and success. KPIs are super important! But are all of them?

Online store owners always measure themselves. If you invest in a business you want to make sure it is growing, that you’re on the right path, that your customers are satisfied and that you don’t miss anything along the way. A great and fairly easy way to do so is by monitoring KPIs – key  performance indicators. The problem begins when you realize there are so many!  What brings us to our starting point : how many are too many, and how can you condense everything into what is really important for your business?

It is important to understand That every KPI can give you information about your business. It can be very important or less, but if you have the time and resources and you wish to learn more then of course you can measure everything – ‏if you can measure it you can improve it!  However, you might lose focus and miss out on essential data . That’s why in this article we wanted to indicate what we think are the 6 top KPIs that are crucial if you are on Shopify or using WooCommerce.

Conversion Rate

This KPI is super important because it reflects your customers behavior and experience.

Conversion rate tells you how many visitors (in %) of the total number of visitors that landed on your website, eventually took any kind of action, like registering, through signing up for updates and/or ended with making a purchase. 

Conversion rate indicates how appealing, encouraging and action driving your website is, and the information within it. Since you don’t have tengil products, your website is everything to your customers. Their experience should be impeccable. Your conversion rates will tell you all about that.

Customer lifetime value – CLV

 

This metric is indeed a KEY indicator.  CLV  tells you how much a single customer contributes to your business Within the period of time of your relationship. Customer lifetime value is so important because it provides a picture of the business long-term and its financial viability.

Including CLV into your strategy helps define specific marketing and sales goals to help you lower the costs and keep the retention high. Also as a result this metric will help you understand  and gouge your return on investment (ROI)

 Average order value – AOV

Let me start by saying that by improving your average order value You directly improve your profits.  With that said let’s look into this metric. AOV is the average amount of money a customer spends in one order on your website. The significance of this metric is  for your pricing strategy. As an owner you can take lots of actions when you know your AOV rates such as upsells or cross-sells, offering loyalty benefits and Other things that will be valuable for your customers. then if you can  increase the  average of your single  order value,  you will be more profitable.

Shopping cart Abandonment rate

The shopping cart abandonment rate tells you about the percentage of people that went through your website, filled their shopping cart but never made the actual purchase. This metric is about the money time, and it will help you understand your customer’s experience within the checkout process. Any weak points, failures or problems in the process will be revealed by this metric. 

Recent studies show that this rate stands at an average of 70% and the  main causes can be:  misleading information, a long or slow checkout process, high shipping or taxes, late delivery or even security issues. Trying to change your whole checkout strategy or each of these factors individually, will help you understand the reasons people are showing interest in your products but not buying them.

Gross profit margin

This might be the most important metric.  Since running an online store means you need to be considering so many factors like products, marketing, inventory, sales, customers and so many others there’s one thing you should Always stay focused on, and this is your profit. Now, the only way to measure if your business is profitable and if your income is increasing or decreasing is by comparing your profit with previous periods. It is really that simple; if your  cash flow ‏is growing, that means your strategies are working well ‏and you need to start thinking towards the next level. But if the rate is low its basically means that you’re losing money, ‏and you need to stop what you are doing and rethink your strategies.

Wrapping it up- 

As said before, there are so many metrics that you can measure, check how well your business is working and feel it’s pulse and health. But don’t get lost within the endless information. Try to focus on what is important to you at any stage. Also don’t forget: changers are good for any business!  What is important  today may be  less important next year. Make sure you always get only the essential insights that will contribute to your business growth.

Confused?

Don’t be! We at Kronoseal already did the background work for you, 

and we are ready to help any business stay on the right path to success! 

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