The ‘golden’ season of Christmas and New Year sales is over. Now, it is time to summarise and make conclusions. How effective your performance was for the last few months? How much of your budget to allot for marketing further on? What to focus on and where you can slacken the reins? Let’s figure it out by understanding the key metrics.
1. Sales Revenue
You can calculate your sales revenue from inbound marketing by utilizing the following calculation:
(Total sales for the year) – (Total revenue from customers acquired through inbound marketing)
Note: In CS-Cart you can get a gross total for sales per year by specifying the period and ticking in the order status (choose the ‘Complete’ status). For Multi-Vendor, the earnings of a vendor or a store owner are calculated:
Vendor’s income = payments for orders – (commissions + payouts)
Store owner’s income = commissions + payouts
You can see this metric on Vendors – Accounting page.
A good metric for email marketing as for average open rate for all industries was 21.73% and the average click-through rate was 3.57% in 2016. This metric is relatively constant, so you can compare your figures and know your performance.www.campaignmonitor.com
2. Customer Acquisition Cost
A lead or, in other words, your potential customer, has got a ‘cost’. You can measure how much is it costing to acquire a customer through inbound marketing versus outbound marketing. To do this, the integration of your marketing automation and CRM platforms is required.
Calculating CAC for inbound marketing includes:
Dividing all the costs spent on acquiring more customers (marketing expenses) by the number of customers acquired in the period the money was spent, you will get your CAC.
Once the costs associated with your marketing campaigns are calculated, you can account for new sales or allocate particular budgets for each campaign.
3. Customer Lifetime Value
You can calculate the lifetime value of your customers by using the following calculation:
(Average sale per customer) x (Average number of times a customer buys per year) x (Average retention time in months or years for a typical customer)
An ideal LTV : CAC ratio should be 3:1.The value of a customer should be three times more than the cost of acquiring them. If the ratio is close i.e.1:1, you are spending too much. If it’s 5:1, you are spending too little. In fact, you are probably missing out on business.klipfolio.com
4. Return of Investment
Calculating your inbound marketing return on investment helps assess your monthly and annual performance and plan strategies and budgets further.
Use this formula to calculate your ROI:
(Sales Growth – Marketing Investment) / Marketing Investment
Once you have tools in place to analyze this data, you can optimize traffic sources that result in more lead traffic, ultimately increasing conversions on your site.
A ratio over 5:1 is considered strong for most businesses, and a 10:1 ratio is exceptional. Achieving a ratio higher than 10:1 ratio is possible, but it shouldn’t be the expectation.www.webstrategiesinc.com
5. Website Traffic
Knowledge of your conversion rate helps to realize how effective your content marketing is or how well your marketing efforts drive traffic to landing pages. Optimizing your landing pages and content placement is possible through utilizing A/B testing. You will clearly see that, for example, landing page B works better. So, pulling landing page A down, you will see a dramatic increase in conversions!
As of Q2 – 2018: The average eCommerce conversion globally is at 2.86% The average eCommerce conversion in the US is at 2.63%. The average eCommerce conversion globally is at 4.31%.www.invespcro.com
Of course, this is not a full list of key metrics and benchmarks for eCommerce websites. However, they are the basic ones! Although, your CS-Cart or Multi-Vendor platform has some inbuilt tools for measuring effectiveness and provide you with stats, connecting Google Analytics and MailChimp to it will be required to get the full picture. Comparing the figures acquired using these solutions with the benchmarks will help you to understand how your shopping platform. And if you want to get an expertise piece of advice relative to your specific case, simply send us a quote!