Which marketing strategies work and which don’t? Where do your customers come from? In the world of sales, we’ve all heard the truism about the importance of measuring your results. This is particularly important as the online universe expands, technologies advance and particular services and marketing tactics take hold. In order to ride this wave rather than get dragged under, online store owners need to adapt and make good decisions - quickly! This is where Google Analytics can help. Google Analytics is the most popular tool for web analytics - it’s easy to use, generates informative performance reports and is free.

 

How to set up a Google Analytics account and track e-commerce

Google Analytics is a great tool for e-commerce sites because it allows you to set up an account and directly integrate your sales data, connecting sales to actual sessions and specific marketing channels. If you don't have a Gmail account, you'll need to make one in order to use Analytics. After you've logged in to your account, toggle to Google Analytics. To connect your store, look up instructions on your website builder platform (the steps are slightly different on each platform).

After you’ve integrated Google Analytics, you’ll need to enable e-commerce tracking to ensure that Analytics can access relevant data (purchases, most popular products, etc.). This can be done from your Analytics account settings. Click on “Admin” next to the gear icon at the bottom of the left-hand menu, and then “View Settings.” Choose the option on the left that says “E-Commerce Settings” and click “Enable E-Commerce” to turn it on.

Once you've integrated your e-commerce website, you'll see that your Google Analytics overview is empty. This is because data collection begins only after connecting the account, so be patient and numbers will soon appear as your website generates interactions with clients. You can find this information in the Audience Overview within Analytics.

 

Check on your sales

By far the most important indicator for e-commerce users is called Product/Market Fit, which measures the value that your business provides to its customers - whether you’re offering a successful solution to their problems or unmet needs. If this is the case, they will be willing to pay for it. Businesses that meet the Product/Market Fit indicator sell products that customers like a lot, and offer a high quality onsite experience, to encourage customers to return.

This indicator should be a priority, and only after achieving Product/Market Fit, you might begin to think about scaling your business. Scaling means increasing time and monetary investment in marketing in order to improve sales and your profit margin. Don’t take this step before your business shows Product/Market Fit - you could incur serious losses by moving forward using a model that doesn’t work for your business.

So, what are the concrete metrics used to calculate Product/Market Fit and determine if your business fits the criteria?

  1. Customer Lifetime Value (LTV) - A calculation of profits received from an average customer throughout the duration of their time as a customer. LTV is linked to your profit margin - since a high rating is a green light for a company to invest more to bring in new customers.
  2. Returning visitors - The percentage of customers who return to your website. This indicates that they were interested in your site's content.
  3. Average session duration - Calculation of the average amount of time users spend on your site (per visit). A high rating suggests that people are enjoying the site.
  4. Pages per visit - The average number of different pages within your website that users navigate to per visit. It's good to see a high number - this shows that your site has piqued users' interest.
  5. Bounce rate - The percentage of users who visit a single page on your website and then leave without further action. You want this number to be low, since a high bounce rate means that users aren't sticking around after their first impression.
  6. Number of visitors during a time period - this will be shown in a large blue graph. Each time a visitor enters your site, this is considered one session. You can change the date range and use the “compare to” option to see how you did comparatively during different periods.

 

Google Analytics will calculate all of these metrics, aside from LTV (you'll need to calculate that yourself). They provide a general overview of your sales, but you can use the data provided to ascertain more valuable insight moving forward.