I was reading an article online a few days ago about how by studying your Facebook “likes” can predict your personality traits such as political standing, sexuality and intelligence.
Whether that is true or not and to what degree of accuracy they can predict I don’t know, and that’s not what this article is about. It did however get me thinking about formulas and what can we predict with a reasonable level of accuracy, and the big question: whether there is one for website success.
What could be the key indicators for an ecommerce store?
- Traffic – The more the better, get a load and some will buy…right..
- SEO Rankings – Increases traffic…job done
- Conversions – What % of visitors are actually buying?
- Traffic Sources – Is there a source to target? Does Google give better results than Facebook?
- Time spent on page – What is the mean time? Too short is bad, too long is bad…
- Average basket value – 100 sales of £10 and we break even.. or 1 sale of £1000
- Website load speed – What is the maximum before people drop off
- Social Media – Another great source of traffic and brand recognition
All of these are important in an ecommerce store in the fast paced online retail sector, however, are these the most useful variables to predict future success of a company? Creating a formula out of the above is going to be a lot more complicated than the marriage formula below!
So what is the ecommerce formula?
As it turns out the formula held most in regard is quite simple:
B = V x C x L
That’s it, don’t focus on the large stats and detailed analytics. They help to get where you need to be, but the final formula you need to bring it all back to is:
Visitors (unique) x Conversion rate x Loyalty
The number of new potential customers coming to the site (current customers are taken care of in “Loyalty”)
How many customers it takes on average to visit for you to have a sale
How many repeat purchases you average per customer
The statistics for the above formula are readily available in Google Analytics. They give you a great read on where your site is and a predictor of what can happen if you change just one of those 3 variables. And the great thing is you can affect each one of those variables individually:
Add new “Key Words” to your SEO Strategy
Look at UI/UX & calls to action on your site
How do you look after customers? Look to Zappos for inspiration!
There are a number of different ways you can increase sales in eCommerce – what I have tried to do is show that its not a minefield of numbers and statistics, but that if you focus on key numbers you can make informed decisions about your growth and maybe even see where you are letting the business down.
A few other predictor formulas making the rounds:
The Hit Phenomenon
Japanese physicists predict the success or failure of films at the boxoffice
British researchers devise a formula to predict the success of chart songs
Marriage Success Predictor (a simple fomula as it turns out)