The main focus of any business is generating revenue and fostering business growth. As discussed in a previous post, setting specific goals for your marketing efforts is essential to keeping your business functioning in such a way that it can operate in line with this focus. However, your responsibility as a business owner to keep your ship on course does not stop at setting goals; it also includes measuring your effectiveness at achieving these goals. To do this, you need to know which metrics to track so that you can know if what you are doing is working or not. By tracking the right metrics and adjusting your strategies accordingly, you can improve the effectiveness of your digital marketing efforts and ultimately increase revenue for your small business.
But what does this look like in practice? As small business owners, we understand that we need to set goals, we understand that we need to track our progress, and we understand that we need to measure specific metrics to know if what we are doing is working or not. But where do we begin? How do we know which goals to set, which metrics to choose, and what these metrics mean?
While there are numerous goals that you can choose from, ranging from revenue to sales, marketing to operational, and everything in between, in this post, I've outlined three important goals that all small businesses should include as part of their strategy: increasing website traffic, increasing conversions, and increasing brand awareness. These goals can directly impact your revenue, whether you are a product or service business, but this post focuses particularly on how these goals affect e-commerce businesses.
Goal 1: Increase website traffic
One of the most common goals for any website is to increase the number of visitors to the site. This is especially important for businesses that rely on online sales to generate revenue. Increasing website traffic can directly impact your bottom line by helping you generate more revenue because when you have more visitors coming to your website, you have more opportunities to convert those visitors into customers.
What’s more, increased website traffic can also lead to higher search engine rankings, which in turn can bring even more traffic to your site. This is because when your website appears higher in search engine results, it is more likely to be seen by people who are actively searching for the products or services you offer.
To track the success of your activities implemented to achieve this goal, you'll want to monitor metrics like:
Website traffic: This includes the number of visits to your site, the number of unique visitors, and the amount of time visitors spend there.
Traffic sources: It's important to know where your traffic is coming from, whether it's organic search, social media, or paid advertising.
Bounce rate: This is the percentage of visitors who leave your site after viewing only one page. A high bounce rate can indicate that your site isn't engaging enough or that visitors aren't finding what they're looking for.
Goal 2: Increase conversions
Another important goal for an e-commerce business is to increase the number of conversions on the website. Now, what are conversions? In digital marketing, a "conversion" is when a website visitor takes a desired action on your site. In the case of an e-commerce business, the most common desired action is for a visitor to make a purchase, but it can also include actions such as filling out a contact form, subscribing to a newsletter, or downloading a resource.
In other words, a conversion is when a visitor goes from just browsing your site to taking an action that moves them closer to becoming a customer. This is a key metric to track for any e-commerce business, as it directly impacts revenue.
Conversions directly impact revenue because, as mentioned above, they represent actions taken by visitors on your website that lead to revenue-generating activities, such as making a purchase.
For example, let's say that your e-commerce business has an average conversion rate of 2% and you receive 10,000 website visitors in a month. This means that you can expect around 200 conversions (purchases) for that month.
If your average order value is €50, those 200 conversions would generate €10,000 in revenue for your business. However, if you can improve your conversion rate to 3%, those same 10,000 visitors would result in 300 conversions, generating €15,000 in revenue.
As you can see, even a small improvement in conversion rate can have a significant impact on revenue. This is why tracking and optimising for conversions is so important for e-commerce businesses.
To track the success of your activities implemented to achieve this goal, you'll want to monitor metrics like:
Conversion rate: This is the percentage of visitors who complete a desired action on your site, such as making a purchase or filling out a contact form.
Average order value: This is the average amount of money spent by each customer during a single transaction.
Cart abandonment rate: This is the percentage of visitors who add items to their shopping cart but leave the site before completing the purchase. A high cart abandonment rate can indicate that there are issues with your checkout process or that your pricing is not competitive.
Goal 3: Increase brand awareness
For businesses that are just starting or looking to expand their reach, increasing brand awareness can be an essential goal. Also, while it might not always seem like it, increased brand awareness has a direct impact on your revenue because it helps to create a positive perception of your brand in the minds of potential customers, which can lead to increased sales and customer loyalty over time.
When people are aware of your brand, they are more likely to consider your products or services when they are in the market for what you offer. For example, let's say that someone is in the market for a new pair of gym shoes. If they have heard of your brand and have a positive impression of it, they may be more likely to consider your products when making their purchase decision, even if they have never purchased from you before.
What’s more, when people are aware of your brand, they are more likely to recommend it to others. This word-of-mouth marketing can be incredibly powerful, as people are more likely to trust recommendations from friends and family than they are to trust advertisements.
Increasing brand awareness can be achieved through a variety of marketing tactics, such as social media marketing, content marketing, influencer marketing, and more.
To track the success of your activities aimed at achieving this goal, you'll want to monitor metrics like:
Social media engagement: This includes metrics like likes, comments, and shares on your social media posts.
Brand mentions: You'll want to monitor mentions of your brand across social media, blogs, and other online platforms.
Website referrals: This is the number of visitors who come to your site from other websites. A high number of referrals can indicate that your brand is getting attention and generating interest.
Conclusion
You need to track your digital marketing efforts to increase revenue and foster growth. Three essential goals for small e-commerce businesses (and all businesses, really) to include in their strategy are increasing website traffic, increasing conversions, and increasing brand awareness. Monitoring metrics such as website traffic, traffic sources, conversion rates, average order value, cart abandonment rate, and brand awareness is crucial to measuring the effectiveness of their efforts. Improving these metrics can have a significant impact on revenue, and small improvements can make a big difference. By setting specific goals and tracking the right metrics, you can adjust your strategies accordingly and improve the effectiveness of your digital marketing efforts.