Category: Digital Marketing

Ecommerce tracking for Pay-Per-Click (PPC) Return on Investment (ROI) is crucial for assessing the effectiveness of your advertising campaigns and optimizing your marketing spending.

To start, keep these three strategic goals in mind to measure your eCommerce KPIs + campaign success:

• Select your eCommerce KPIs, then track their corresponding metrics.
• Ensure you have an analytics system to measure metrics as accurately as possible.
• Set benchmarks for your eCommerce KPIs list to track success.

Keep your digital marketing ads measurable and accountable to show precise results for your campaign budget and effort. That way, you can know exactly how much return you get on your marketing investment and ad spend.

Analytics tracking

Google Analytics is the trusted tool for tracking website performance and eCommerce conversion success. When you implement advanced eCommerce tracking, your store and code collect specific eCommerce KPIs important to ongoing budget optimization. Thanks to a line of code, you can track visitors coming to your website from multi-channel PPC ads. You need to set up benchmarks for your eCommerce KPIs since they provide insight into what is working, what needs improvement, and your growth rates. Understanding how ads and sales perform helps you accurately calculate your Return on Ad Spend (ROAS) and make the necessary marketing adjustments.

Top Ecommerce KPIs

Ecommerce Conversion Rate

Ecommerce Conversion Rate is the percentage of visits that resulted in an eCommerce transaction.

Return on Investment (ROI)

This is your revenue from marketing divided by expenses, including your cost of goods sold (COGS).

Return on Ad Spend (ROAS)

The revenue generated from your marketing efforts is divided by your marketing costs.

Improving ROAS

How to Drive Maximum Return on Ad Spend  (ROAS)

While similar to standard eCommerce ROI metrics, it provides specific measurements for each marketing channel, such as:

• • Google AdWords
  • Google Shopping Ads
  • Facebook Ads
  • Instagram Ads
  • LinkedIn Ads
  • and more…

ROAS measures how much money you make for every dollar you spend on advertising. ROAS greater than 1, you break even. If ROAS is negative, you’re upside down in your advertising efforts. Therefore, if it’s greater than one, you have a successful campaign, which you can further optimize with CRO+ UX. Example: You allocate $2,000 of your marketing budget to a PPC campaign. By tracking the clicks that the campaign generated and following them on through to check-out, you determine those clicks generated $10,000 in sales. $10,000 / $2,000 = $5. Every dollar of ad spending resulted in $5.00 worth of sales.

How to Get Better Results (More ROAS) from Your Advertising Budget

Remember that ROAS is determined by dividing the total revenue from ads by the cost of those ads. If revenue increases but ad spending remains the same, your ROAS will grow. On the ad side, the goal is to spend less per click. On the Conversion Rate Optimization (CRO) side, the goal is to sell more. How can you accomplish both?

We have some tips to help. Top 4 Ways CRO Can Boost ROAS:

1. Remove friction through psychological design.
2. Up-sell and cross-sell to increase average order value.
3. Diminish cart abandonment so more prospects make it through to make the purchase.
4. Convert ad clicks into paying customers with a seamless user experience (UX).

We’re trusted by local businesses, SMBs, and enterprise brands to build PPC campaigns that generate ongoing value.

We found the best way to maximize your marketing budget and advertising spend is to combine eCommerce KPI tracking through Google Analytics with a CRO optimization tool. For example, our proprietary web tracking software generates UX insights through heat, click, eye-tracking maps, and record user sessions.

Our system is transparent and accountable by combining our enhanced eCommerce tracking analysis with expert strategy, ad creativity, and ongoing post-launch optimization. Through ongoing tracking, measurement, and human insights research, we make your eCommerce campaigns rock solid.

To see how much we can multiply your investment, we offer a free consultation to find marketing wins based on your margins, best sellers, seasonality, target audience, and more.

Learn more about how to build a transparent ROI system for your eCommerce marketing, and get a complimentary eCommerce Marketing Audit with one of our experts.

Before discussing ways to improve Average Order Value (AOV) and Customer Lifetime Value (CLV), let’s quickly look at these and why they are important to your e-commerce business.

Average Order Value (AOV)

As the name suggests, the average order value is the amount customers pay in a single checkout. It can be calculated for a given period by dividing the total revenue by the total number of orders.

Customer Lifetime Value (LTV)

Customer Lifetime value is the total sales on average that you expect a customer to purchase from the store during their lifetime. It can be calculated by dividing the total revenue by the total number of customers in a given period.

Given that definition, it’s quite obvious that increasing these values will mean more revenue, but there are some other considerations where these become important. One such consideration, for example, is how much a store should spend on customer acquisition costs (CAC). Let’s take the case of a store that’s considering a Google Pay-Per-Click Campaign per the following parameters.

1. Subscriptions

As long as the store is not selling something that the customer usually needs only a few times in a lifetime, this is a highly impactful way to increase Customer Lifetime Value. And it’s quite common as indicated by a McKinsey survey that found that almost half of all e-commerce customers held at least one subscription. However, merely offering a subscription might not do the trick. The same survey also found that most customers don’t subscribe because they love subscriptions but do it for other reasons, like a recommendation from a friend or a financial incentive, as seen in the diagram below.

Definitions:

Replenishment Subscription: Replenish the same or similar items

Curation Subscription: Receive a curated selection of different items with differing levels of customer decision-making required. Access Subscription: Membership provides access and can convey additional VIP perks. As is evident from the numbers, offering a discount and providing a great customer experience, leading to recommendations, are the top two strategies to increase Customer Lifetime Value through subscriptions.

2. Rewards

Rewards are another great way to encourage repeat business and improve Customer Lifetime Value. Here are three statistics from a survey by Bond Brand Loyalty that prove this assertion.

Rewards can be offered not only for purchases but for other actions such as referrals and even social media sharing. However, engagement in rewards programs varies depending on how much value the customers perceive them to be. Here are the two biggest differentiators to make your rewards program stand out.

Recognition & Support

The above survey found that recognition is the top reason customers stay on and engage with a rewards program. Customers expect to be treated better than non-program members. Other surveys have shown that levels of program membership with increasing rewards or experiences are one great way to make a customer feel recognized.

Personalization

The other big reason for customers to engage with a program is personalization. The survey found that rewards programs that can personalize offers can achieve a much higher lift in outcomes as against the ones that don’t.

Having a great rewards program not only lifts lifetime value by making the customer more likely to buy again but also increases Average Order Value (AOV), as found by another survey.

3. Cross Sell And Up Sell

Upsells and Cross-sells have been known to increase AOV long before eCommerce, but for the skeptics, here are a couple of statistics that should convince anyone to adopt this strategy

• Amazon reported that 35% of its revenue comes from cross-selling and up-sell
• Forrester Research estimates that 10-30% of eCommerce revenues come from product recommendations.

There are a few different forms of upselling and cross-selling related to e-commerce. Let’s look at a few in more detail.

Frequently Bought Together

“Frequently Bought Together” or “People Also Bought” sections show customers what other customers have added to the cart and what they are looking at. The former strategy is useful when a customer needs an accessory to utilize an item they are looking at fully. The latter is more generic but usually also less effective. Stores can use tests both together or the latter when the former doesn’t apply.

Upgrades And Quantity Upsells

Upsells can be achieved through newer or upgraded versions of products or increased quantities. Customers landing on an older product can be guided to a newer, more expensive version, along with an indication of what the new product provides that the older one does not offer. Customers buying a product with different quantities (coffee, anyone?) can also be offered a discount for increased quantities.

Product Bundles

Upselling and cross-selling can also be achieved using product bundles. Carefully planned product bundles have shown an extraordinary increase in Average Order Values (AOV). A study by Harvard Business Review on Nintendo showed that the company sold about 100,000 more video game consoles when bundled with a game, and sales of games also increased when bundled. However, providing customers flexibility was essential since pure bundling (making the products available only as a bundle) reduced sales by 20%. Many other success stories of product bundling increase average order values by more than 100%. It’s worth trying different combinations to increase the Average Order Value (AOV) where possible.

4. Wish List

The wish list is a feature that allows customers to save items they like but are not ready to buy. Providing a wish list is convenient, but there are other ways to optimize a wish list further. For example, making a wish list shareable can increase sales if a customer shares their wish list with like-minded friends. Wish lists can also be a reason for increased email marketing engagement when for example, the price of an item in a wish list drops due to a new discount. It can also allow companies to personalize emails better and have more information about customers individually and as a whole to optimize inventory.

5. Email Marketing

This one is obvious. To increase Customer Lifetime Value, customers have to return to the store. What better way to remind them than a nice little email with products they might like, a special promotion, or an email about any of the other strategies above? Here are some tips that will help you ace email marketing.

Welcome Email

Welcome emails are a great way to promote other products after the first purchase. These emails have a fantastic open rate of 82% per research from GetResponse. So, regardless of whether the customer signed up for an account, send them an email welcoming them to your store.

Personalization

Per Yes Lifecycle Marketing research, a personalized email subject led to a 50% more open rate than the generic ones. Even personalization as simple as including the first name in the subject increases open rates significantly. However, open rates are only part of the story. Actual conversion rates will depend on the personalization of the content itself. Similar or frequently bought together products or products of the same category can increase conversion rate and, ultimately, customer lifetime value.