Learn how to increase your eCommerce sales and revenues by using analytics and taking data-driven decisions with the ultimate eCommerce analytics guide.

Any eCommerce website owner’s main goal is to increase its sales and revenues. The most effective way to do so is choosing the right analytics tool (or tools) for your needs, learning how to make the most out of it, and taking data-driven decisions based on the detailed data provided.

Why you should never pass on analytics?

Integrating and using analytics tools on your eCommerce website is a major key to success and will afford you a huge advantage over your competitors. Passing on analytics also means passing on vital information that can help you to win in the super competitive eCommerce world.

Without analytics tools, it’s impossible to really understand how users get to your site, how they behave on it, which products they are interested in, where in the sales funnel you lose potential buyers and generally how to make the changes and optimization that will lead to more sales and to get the most out of your eCommerce website.

What do you really need to measure?

Before you choose the analytics tools that are the best fit for you, it is very important to understand how to make the most out of them and how to use the provided data to maximize your eCommerce website and marketing efforts.

Don’t waste your time on the wrong data.

A very common mistake often made is to focus on the wrong data, thereby missing out on what’s really important. All too often website owners focus on measuring and optimizing the number of website visitors and pageviews. It’s ok to measure page views, and of course, it’s good to have plenty, but unless you run a content website that generates revenues from selling ads based on impressions, you are simply wasting your resources and time on the wrong set of numbers.

It doesn’t matter if you have a million website visitors. What matters is how many of them made a purchase.

Let’s say one of your product pages gets 2,000 visits a month, but at a very low conversion rate, and it generates only 5 sales a month. Another product page gets 500 visits a month, but has a better conversion rate and generates 10 sales a month. It is quite clear that the second page is considerably more efficient (It could be a different product, a different design, a different audience or language), and should you focus only on page views, you would miss out on those pages that are actually the most effective in generating sales.

The same goes for marketing channels. It doesn’t matter which channel gets you the most page views, what matters is which marketing channel get you the best return on your investment.

Focus on the metrics that really matter for eCommerce

It is especially important for eCommerce websites to put the focus on the actions your users are taking on your website that lead to an actual sale.

You simply have to track each event that forms a part of your sales funnel, all the way from the first visit, through “sign-up”, “add to cart” and an actual purchase. You can then use this data to optimize each step of your sales funnel on both your web pages and marketing efforts (It’s called the full-funnel marketing approach).

For example, tracking each of those events is very easy with a tool such as Oribi, and you can easily see where in your sales funnel you are losing your potential buyers. Let’s say you have 1,000 visitors which converted to 100 sign ups. This means you have a 10% conversion rate, which is ok, but using an analytics tool can help you to drastically increase your conversion rate and improve your entire sales funnel, by taking the right actions to adjust your website and improve your marketing efforts.

How to actually take data-driven decisions?

In order to really understand your website results, there are a few things you should do with analytics:

  • Use event tracking and analyze your users’ behavior
  • Improve your conversion rates with A/B testing
  • Use Heatmaps to understand your user’s experience

Let’s go over them.

Use event tracking and analyze your users’ behavior

Using a website and user behavior analytics tool is an absolute must for any website owner of any type, especially eCommerce. Without such a tool, you are practically blind, and missing out on vital data – such as where your users are from, how they were referred to your website, which product pages got the most traffic, and especially how do you actually generate your sales, and how to significantly increase it.

How to get started with events tracking?

The first thing you should do is choose the right tool for you. These tools include MixPanel, Oribi, Heap, KissMetrics and the most common tool Google Analytics, which is being used by most websites.

Is Google Analytics enough?

The answer to this question is definitely no! While Google Analytics focus is mainly analyzing your website traffic, tools like Oribi, MixPanel or Heap are built for analyzing events (such as “Signups”, “Add to Cart” or “Checkout”) and users’ behavior. For example, Google Analytics will help you understand where your website visitors are coming from and how long they stay on it, while other analytics tools such as Oribi will help you to better understand how you acquired those users, their behavior, how they progress through your sales funnel, and where you may have lost any.

Google Analytics also allows you to track conversions, but since this is not its main focus, it is much less intuitive, flexible and especially much harder to set up and get real actionable data.

In order to really focus on your events, conversions, and sales, the use of events based analytics tools is required.

How to choose the right analytics tool?

Choosing the right analytics tool (or tools) is crucial and should be approached carefully. Oribi, MixPanel, Heap, and KissMetrics have different features and price ranges. You can choose the one that offers the best features for your needs at a suitable price. Usually, the pricing is based on the number of tracked events, sessions, and available features. The problem with this type of pricing is that you may choose the wrong tool for you and end up paying a much higher price than you intended or passing on tracking some of the events (as may happen with MixPanel or Heap for example), which also means passing on vital data.

You obviously wouldn’t want to pay a high price for an analytics tool that doesn’t match your needs and ends up losing money because of that. The whole purpose of using an analytics tool is to eventually become data-driven, earn more, and reduce marketing costs.

How to get the most out of your analytics tool?

There are a few basic actions you need to take in order to leverage on the extremely powerful data you will have access to:

1. Optimize your sales funnel

Define each step of your sales funnel as a tracked event and display it on your dashboard.

See exactly where you are losing your potential buyers. Check how many of them dropped on the “Add to Cart” stage, and what percentage of them go all the way to a checkout. Optimize each step of the funnel separately. Even the slightest change in each stage can significantly improve your overall results.

2. Analyze your product pages

See which landing pages or product pages convert the most visitors into buyers, and where you can improve your conversion rates. Get the precise number of visitors and buyers, and the conversion rates of each of your pages across your entire website.

3. Analyze your marketing channels

See the full data of each of your marketing channels and referrals. Analyze how each channel is performing, by events and conversion rates.

4. See your Optimization opportunities

This is actually a feature unique to Oribi. Once added to your website, Oribi will constantly analyze your data and will display any possible chance of optimization every time you log in. Using this data will save you a lot of time trying to figure out where and how you can improve your sales results.

5. See which type of devices work better

See how many people are visiting your eCommerce website with which type of devices, and how many sales it leads to. Maybe you are investing too much on mobile traffic, but getting very few sales out of it. You might see that you are getting a very small portion of your traffic on tablets, but their conversion rates are significantly higher than the others.

This data can be a great indication of which type of traffic you should invest on, in addition to understanding how your website performs on each platform.

Improve conversion rates with A/B testing

A/B testing is a simple process of splitting web site traffic between two or more page variations at the same time and measuring their results to see which is performing better.

The difference between the variations can be textual or visual. For example, you can run a test on your homepage and change the main header text so that the first variation includes a certain title while the second variation has a different title, and see which of the texts perform better. The test can also be visual, from a different page design, different colors, layout or images.

How to get started with A/B testing?

The very first step is to choose the right tool for you. Several analytics tools offer A/B testing features, including Google Analytics or MixPanel. However, tools like Optimizely or VWO are strictly A/B testing tools and offer a wide range of extremely powerful features, giving you the ability to easily create multiple landing pages with visual and textual differences.

Set your goals

When creating an A/B test, you are trying to understand which of the variations is better to help you reach your goals but to know that, you need to define those goals in your chosen tool. This is exactly like setting up conversion tracking in any website analytics tools. All you need to do is install a snippet on your website, regardless of whether it’s Optimizely, VWO or another tool. Then you set up the events you wish to track and optimize for.

For example, if you’re using Optimizely to optimize your landing pages for sign ups, you need to define the conversion “sign up” in Optimizely and update your website code. When creating your test, choose the test goal: in this case, you will choose to optimize for sign-ups.

Measure your A/B testing results

Once your tests are live, it’s time to measure them and assess the success of each variation. Each of the A/B testing tools allows you to easily see the results of your tests and determine which variation wins. The winner is the variation which converted more visitors to meet your chosen goal. So, if you chose to test two variations in order to get more sign ups, the winner will be the one which will convert visitors to sign up in a better ratio.

For example, the image below shows the results of three variations (taken from Optimizely). It’s very easy to see how many unique visitors saw each variation, and how many of them actually converted and signed up. Variation #3 is leading with a conversion rate of 23.57%, which reflects a 7.96% improvement from the original variation #1.

Optimizely also tells you whether the results are significant. The significance is set by the percentage of improvement and the number of visitors.

As you can see, this experiment is far from being significant and we can’t say for sure that Variation #3 is the winner.

Should you wait for a significant winner?

Definitely not! You don’t always have to wait for an official winning variation. If it seems like one of the variations is consistently leading, you can allocate more traffic for this variation while still testing it against another variation. For example, if you start your test by allocating 50% of the traffic for each variation, you can increase the percentage of the variation you assume is better to 75%. The purpose here is to improve the overall conversion rate of the page while simultaneously testing until there’s a significant winner.

How to take data-driven decisions based on A/B testing?

So, now you got the results, and you know how to read them, but what’s next? The A/B testing doesn’t end once a particular version comes up as the winner. When you have a solid winner, or even if it looks to be the likely solid winner, it’s time to pause the losing variation and create another variation to compete with the remaining winning version – a C variation.

In order to truly use the data smartly and understand your results, the testing method should be systematic and consistent. Each A/B test should have only 1 different element, in order to isolate the factors of success. For example, test the page headline in an A versus B variation, and then pause the losing version, let’s say it was B, and test the winning A version against a new C version that will contain the same headline but a different CTA button. Continue using this method and constantly improve your conversion rates.

Use Heatmaps to understand your user’s experience

Heatmaps visualize your website data by showing you the “hot spots” on your website. Heatmaps help you get a deeper look into your users’ behavior by highlighting behavior and the cause for them taking or not taking certain actions.

Heatmaps are great for eCommerce websites. Understanding your website’s strong and weak points can help you significantly improve your sales rates by making the needed changes according to the provided data by heatmaps tools.

There are 3 types of heatmaps:

1. Click heatmaps

The most common and basic heatmaps. Click heatmaps are exactly what the name suggests: they show where users are clicking. The more clicks a certain button or spot gets, the “hotter” it will be displayed in the heatmap.

2. Eye-Tracking heatmaps

The significantly more sophisticated type. Eye-tracking heatmaps take into consideration everything a user does on your website, tracking cursor movements and indicating the eye-movement of each user.

3. Scroll tracking heatmaps

A very basic type of heat map that indicates how users scroll up and down through your website. Its main goal is to make sure your website visitors are actually seeing the right elements in your web page. For example, if your sign-up button is all the way at the bottom of the page and, the scrolling heat map indicates that most your users don’t even scroll down to it, you should move it up.

How to get started with heatmaps?

You have several tools to choose from, all of which provide the basic abilities of heatmaps (and extra features). You can choose between ClickTale, Crazyegg, HotJar, amongst others. Once you choose the right tool for you, you will be required to install the heat map snippet on your website and start building your heatmaps to visualize your website data.

How to improve conversion rates with heatmaps?

Heatmaps can help you to almost instantly improve your conversion rates. Using a click heat map will help you understand where best to locate your call to action button…

Remove any distractions

Optimizing an eCommerce website mainly involves converting website visitors into buyers at the highest possible percentage. You need to ensure that progressing through your sales funnel is simple, easy and direct, and remove anything that may distract your user’s attention from moving forward at each step. Heatmaps are the best way to do this.

Using heatmaps enables you to improve your sales funnel by identifying how users navigate through your pages and identify certain points that draw your user’s attention away from clicking on the right buttons, that lead to the next step of the sales funnel. For example, you can see if your users are getting confused by your design, or if they are not completing the registration due to the process being too long.

Identifying and removing, or relocating distractions will help you to dramatically improve your sales funnel, seeing to it that significantly more of your website visitors progress all the way through to actually make a purchase.

Final words

These days website owners and marketers are able to use a variety of very sophisticated analytics tools and be completely data-driven. You no longer need to base your decisions on assumptions or hunches.

Make sure to leverage the power of analytics to get the most out of your eCommerce website.