Follow along if you want to achieve your eCommerce goals. An eCommerce strategy will help out.
The worksheet that we used for this article with the formulas is available on Google Sheets. If you would like to start working on your plan, please access the worksheet we used for this guide here.
When you are running an eCommerce store, the one question that’s on your mind is: how to boost sales?
The short answer to this question is, by use of an eCommerce strategy plan. With the help of an eCommerce strategy plan, you can know which areas need improvement. A strategy plan also helps you to achieve your eCommerce goals.
In general, it takes about two years for a webshop to be profitable. You will need to invest before you can pluck the fruits of your labor. In the first two years, invest in building the foundation on which you can expand later. Therefore, an eCommerce strategy plan is useful to optimize your marketing budget and help you prioritize your efforts. With the help of an analytic dashboard, you can track the most important metrics but the question remains what to do next? This guide will show you exactly how to define projects for each month to achieve your eCommerce goals.
Let's build an eCommerce strategy plan!
Track Performance Let's start by analyzing the basis. Analyze the current store's performance by using the most important KPIs for an eCommerce site like conversion rate and the number of sessions.
On top of that, the following metrics are crucial to track: • Sales revenue • Average order value • Number of transactions Sales revenue will tell you how much you are selling every week. An eCommerce strategy plan will be based on increasing the sales revenue. The average order value is important to track because you may need to find a way to boost customer spending or the number of transactions if it is too low. In Google Analytics or any other data dashboard, look at the data of the last 30 days to know the store's performance. When you track the last thirty days' performance you can use this data to create a month-on-month eCommerce strategy plan. If you have been selling online for more than twelve months already, look at the data from one year ago to create a year-on-year comparison. In this example, we will use the data of the last thirty days to create an eCommerce strategy plan. Please follow along if your store is still relatively new and you just started to generate some traction.
Create a Worksheet If you use Google Analytics (GA), go to Acquisition/Channels, select the last thirty days to display, and click in Explorer on E-Commerce. GA will show you the total of users, sessions, revenue, etc. of the last month. On the other hand, GA shows you the average value for the order value, conversion rate, and per session value of the last thirty days. Click on export and choose the option you like to export the data to the worksheet. I chose Google Sheets. With this worksheet, you can build your strategic plan. In the worksheet, the data is organized by traffic channel. The breakdown of traffic will be helpful later in defining actions. Copy the headers (sessions, revenue, transactions, etc.) to a new sheet. Copy the text vertically. Excel has the Paste Special option "Transpose", which copies the cells in a horizontal range as a vertical range (or vice versa). Then, copy the summarized values (total of 30 days) to the new sheet, paste them vertically. Table 1 is the result.
Table 1: Ecommerce Strategic Plan Worksheet
Set your Targets The values in the new worksheet will form the base on which you can build the strategic plan. In the example, the sales revenue of last month is $4.5K. You are ambitious and like to increase the sales to $5.6K per month. Reaching 5.7K euro per month would mean a +25% increase in revenue. The next step is to calculate and predict how many users and how many transactions you need to achieve a +25% growth. Multiplying the number of users or transactions with 1.25 (25% growth) will not provide you with accurate numbers. Instead, use the following formulas below. Calculate the KPIs of the eCommerce strategy planTo calculate the KPIs accordingly, we must make some assumptions. If you like to achieve a 25% growth and you don’t have a lot of data yet for reference, we need to assume that the average order value (AOV) and conversion rate (CR) will remain the same in the coming months, respectively $96.34, and 1.13%. With that, you can calculate the number of transactions and sessions. • Formula 1: Number of Transactions= Revenue/AOV A) To calculate the number of transactions you need to achieve 25% revenue growth, divide the target revenue by the AOV. In this example: 5624/96.34=58 transactions • Formula 2: Number of sessions= number of transactions/CR B) To calculate how much traffic you need to achieve the goal of 25% revenue growth, divide the number of 58 by 1.13% = 5166 sessions Table 2 shows the calculated values for a +25% growth in revenue.
Table 2: eCommerce KPIs to reach +25% growth
Rank Efforts Ecommerce Strategy Plan To reach 5.1k sessions and 58 transactions, you need to think of a strategy for how to reach your targets. With all the marketing options at hand to improve sales, focus on prioritizing your efforts. Meaning, only focusing on the projects that will help you achieve your goal. Plot a graph to show the traffic and conversion rate of the ten highest traffic channels. The graphs will show which channel has the highest conversion rate and which channel has the highest traffic. In this example, two channels stand out; referral and email both have the highest conversion rate, respectively 2% and 2.23%. However, the number of sessions leading from referral and email to the site is relatively low. The two top channels that bring in the most visitors are organic search and direct (Graph 1).Graph 1: Sessions vs Conversion Rate Trend
Define Actions The two top channels that bring in the most visitors are organic search and direct. Therefore, it would be a good option to increase referral and email efforts to obtain more traffic. Meanwhile, increase the conversion rate of organic and direct traffic. With this, we have defined two different KPIs to improve; the number of users and conversion rate. Both KPIs require a different strategy. How to improve the conversion rate? Organic search: dig deeper into organic search by investigating what keywords are leading to your store (if provided). What is the bounce rate of the keywords? Are they linked to the correct pages? Secondly, check on which page visitors land through organic search. Is there something you can do visually to improve this page?
For each of the landing pages, check the conversion rate.
1. Which page has a high conversion?
2. Can you lead more visitors to this page?
In Google Analytics, you can ask for insights on the conversion by page. Type “top pages” and it will show you the insights, comparing the conversion rate over time to see which pages are falling behind.
Direct traffic: investigate your site's call to action (CTA).
Can you make them stand out more or can they be formulated in a better way?
Perhaps adding customer reviews helps to convince customers to buy. If you have more advanced eCommerce skills, you can set up an A/B test, change one variable, and check the result of adjusting the CTA. It will not be easy to improve the conversion rate on the short term because many factors come into play. Therefore, improving the conversion rate is a long-term commitment. How to increase the number of sessions?
Referral traffic: in Google Analytics, type “referral” in the search bar to see the referral data.
Which referral sites are sending the most visitors to your online store (highest sessions)? If a company or website is sending a lot of traffic to your site, reach out to them and ask to develop content together or build up a relationship with them. In addition, check for sites that send users with high time spent on your site and high pages/sessions. These metrics indicate qualitative traffic. If you are working with paid referral traffic, the number of sessions, pages/sessions, time spent on site, and bounce rate are the best metrics to review the results of your investment.
find more ways to add an email sign-up to your website. If you have already, can you make it more visible? Repeat on more pages?
Increasing email traffic you both need to optimize your email content and the number of sign-ups. One way to optimize your content is by having a clear CTA above the fold (the first screen that readers see).
If you like to have more insight on how to improve your email content, we like to refer you Hootsuite. The worksheet that we used for this article with the formulas is available on Google Sheets. If you like to start working on your plan, please access the worksheet here.