eCommerce Analytics: Strategy First

Ecommerce Analytics: Strategy First


With eCommerce analytics, start with your strategy first and the pyramid below illustrates a pretty good place to start. Begin by focusing on diagnostics, leading indicators, soft conversions and sales.


Probably the most obvious metric of them all and perhaps the easiest too. Just don’t think of it as simply the number of pounds generated. Instead, consider the key metric of revenue generated per sale. By increasing this value, you don’t need to attract more customers which can be tricky and expensive. Instead you just need the ones you already have to spend a little bit more.


Think ratios – if the number of sales transactions is high but revenue per transaction is low then you need to think of ways to grow basket size. If it’s the other way round then you need to reduce sales friction. Don’t forget to take returns into account. If you’re getting a lot of returns there’s either something up with the product, or perhaps the description you’ve written for it sets up false hope.

Soft Conversions


Soft conversions are exactly what they sound like, they’re activities like newsletter sign ups and account creation. Easily forgotten, but a definite to monitor! These soft conversions add up over time. And can make it easier to convert in the long run.


To make the most use out of them, consider how often soft conversions become sales and how long it takes to become one. In your strategy, these soft converters should be considered as new marketing channels and monitored as such. Maybe have a close look at the differences in buying behaviour between soft converters and those who haven’t before purchasing.


People who have made a softer conversion first tend to have higher cart values per sale in the end for a variety of reasons. It’s important to remember that sole focus on soft conversions can lead to a warped marketing strategy and that’s the last thing we want. Soft conversions are the build up, not the end goal.

Leading Indicators

ecommerce analytics

Source: BCFinance


You can’t generate online sales without traffic, but not don’t think of traffic as the be-all and end-all. Website traffic actually comes second or third in the pecking order of goals, but eCommerce companies tend to place far too much emphasis on traffic alone. Traffic loss can even be a good thing if the new traffic you are getting is of a high enough quality.


It is worth segmenting your leading indicators into more narrow metrics. An example of this may be creating an advanced segment for traffic that comes from a particular geographic location. The integral part of this strategy is to think of the user who’s most likely to convert and by doing this you can separate high and low quality users for targeting.

Diagnostic Metrics


Diagnostic metrics are considered to be the “weeds” of the marketing garden. They’re there, and they’re not all that important but if you fuss over them without reason to it can lead to some bad decisions. For example, a high bounce rate on a retail locator page could actually be a good thing because it means the user has found exactly what they’re looking for and knows where to go. But if you considered this as a bad thing without checking out context, you may end up making the locator page more complicated as a result. You can find out whether a diagnostic metric is worth pursuing by asking the following question:


“How hard is it for me to explain the metric’s correlation with product sales?”


The more explaining you have to do, the less important the metric is. Keep your strategy clean and to the point.


An example of the above is search-engine quality score. How does quality score relate to sales? Well, it causes a higher CPC on adverts, which makes traffic more expensive. This means you need a higher conversion rate in order to even maintain the same ROIs as before, let alone to grow your business.

For more super resourceful articles on eCommerce visit our other posts!

Inspired by: Practical Commerce

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Sebastian Paszek

Marketing manager

Controlling the chaos of the digital landscape, Sebastian is a multiplatform executive, project manager and lover of…