The number one question I get asked by my UNH students and our customers is, What Metrics should I track for my business?
I’m a big fan of picking 3-9 core metrics that drive Impact for your business and measuring them in Google Analytics. Too often I see a business pick 20-30+ metrics to follow which makes it hard for you to track and even harder to focus your efforts.
For example, let’s say you have a seasonal business. Maybe you sell SPF/Sun protection products where the peak of your selling season is May-August each year. The first question is Do you have statistical significance in your data? Just because 15 people bought your new Father’s Day gift pack does not mean you should drop everything and just sell that!
I’m a visual person, so what I do is jump into Google Analytics and expand the date range out 30 days and take a look at the graphs of how many users and conversions we have received. Was there a big spike because we ran a large promotion? Or was the data consistent week over week? If your data is lumpy or has a lot of spikes expand your range to 90 days or find a time frame where you have 1,000+ users and 100+ sales (Why 100? That is the minimum number I’d use to make any marketing decision).
If you have a small shopify store your users might look like this:
And a midsize E-commerce store might look like this:
For most businesses this quickly reduces the number of metrics that meet the “decision grade” 1000 users/100 sales test.
Start with those metrics and then organize them by Top of Funnel, Middle of Funnel and then Bottom of Funnel. I’m not a big fan of linear funnels but since 90% of our clients use them we will too
What are good Top of funnel Metrics?
Typical metrics would be Visits, Users or Unique Users, Sessions, New Users, and then some calculated metrics would be bounce rate, CPA (cost per acquisition), and pages a session. Now ask which of these are going to have the biggest IMPACT on my business in the next 90 days?
I typically pick Users, and the costs that we spent to get them to the website (CPA) and then since most businesses want to be expanding how many were New Users?
Users > New Users > CPA
What are good Middle of funnel Metrics?
- These are typically engagement metrics:
- Time on site, Micro commitments (Did they watch a video, read to the end of a page, sign up for your email, do a social share)
- Session Quality (page load time, bounce rate, page depth)
- % of Returning customers
- Landing page conversion rate
- Email open rate
- Email click-through rate
Since no one I know has extra time I pick Time on site and then bounce rate, and then the most important micro commitment. For example, if you are in the fashion business Instagram can be critical to what you do and I’d track Instagram shares.
What are good Bottom of funnel Metrics?
- Gross E-commerce revenue Net
- E-commerce revenue (less returns, chargebacks, taxes)
- E-commerce conversion rate
- Gross profit
- Cart abandonment rate
- Average order value
- Customer Lifetime value
- Revenue from Email
- Revenue from Social channels
Here I’m a fan of Net Revenue, E-commerce conversion rate, and Average order value because if you focus on improving your conversion rate and average order value it turns into a stream of predictable Net Revenue.
Keep it simple and pick a smaller set of high impact metrics for your business. You have limited time and focus wins so challenge your team Do we really need to track that metric each month? Or can we agree on a balanced set of metrics that we look at more regularly?
Resources for Further reading
- The Impact Matrix | A Digital Analytics Strategic Framework
- Matrix of 31 Marketing Funnel Metrics
- A Refresher on Statistical Significance
- Why Linear Funnels Are a Simplified Reality (and What to Do About It)
- The Importance and Effect of Sample Size