How do I know where to spend my 2021 web budget?
One of the things I love about e-commerce compared to offline selling is the relative ease in using data to drive marketing decisions. There can be hundreds of KPIs (Key Performance Indicators) that can be tracked and that matters, but at a high level they all stack up to just three.
1. Sessions: Traffic to your website over the previous time period (usually month or year). This is easily obtained from Google Analytics.
2. Conversion Rate: This is the percentage of your website traffic that converts into a buyer.
3. Average Order Value: This is the average amount spent per order by each customer.
The formula has two parts and goes like this: Sessions x Conversion Rate = Orders | Orders x Average Order Value = Sales
Our goal is sales. So the process is to first determine what our actual KIPs are. Then we use those values to predict what can be done to increase sales. Deciding which KPI to address is a combination of selecting the "lowest hanging fruit", the most realistic and the least expensive. Understanding this will help you decide things like "do I really need more SEO?" for example.