Analytics for Scaling Growth
Once you’ve made the necessary adjustments in your store, as advised in chapters two and three, you are ready for the Scaling Phase.
In ecommerce, scaling means growing sales. There’s nothing wrong with having a slow-growing company that simply helps pay the bills. But if you have a popular product and a lot of people want it, why not try to sell as much as possible?
As you’re scaling growth, the main business metrics you need to watch are:
- Transactions: Make sure growth is steady by improving your number of transactions weekly or even daily.
- Average Transaction Value: Selling more items or higher-priced products per transaction will help you improve your overall business performance.
- Revenue: Make sure that your monthly revenue numbers are going up.
- Unique Visitors: If all your other metrics are trending up, then your unique number of visitors will naturally reflect more sales and revenue. Just be careful not to pay too much attention to this metric before the above numbers are also positive. Make sure to manage your LTV / CAC (explained in the previous chapter) ratio while you grow in unique visitors so that you remain profitable.
While you still need to monitor your Conversion Rates, Bounce Rates, CAC and other metrics in each of your channels (we’ll cover this in more detail in the next chapter), the metrics above are the most important for scaling growth. They are the ultimate measure of your performance.
Track these metrics weekly in a spreadsheet (click this link to download it for free) that you should use as a general overview of your store’s performance. Add your metrics to each corresponding week and compare them against the previous week. Your main goal should be to always do better than the week before. Alternatively, Compass’ Executive Report can do that for you automatically.
In the next chapter, we’ll talk about the different acquisition channels you can use and the most important metrics in each of them. Acquisition channels, by the way, are the places where you can reach out to your potential customers and invite them to buy from you.