Ecommerce Performance Tracking with Sales Funnels
We all know that ecommerce performance tracking is complicated. The number of existing metrics and parameters is over 100 and even more.
However, it’s well known that if you try to accomplish too many tasks simultaneously, you will be successful with none. So, what is the most appropriate number of measurements for daily tracking? Let’s find out.
Ecommerce Sales Funnel Examples
5-level Sales Funnel
Of course, it depends on your goal, but most likely, daily monitoring is accomplished to make sure that everything goes as planned. So, in this case, is the amount of sales is going to be enough for daily tracking? Well, not quite.
The thing is that sales describe only the bottom line of a business but do not actually explain the conditions and circumstances shaping the result. It may happen that sales remain fixed, while some other factors begin changing.
So, using sales as the only KPI, we are deprived of the possibility to detect early negative shifts in the environment or inside the company.
But how many KPI’s for daily tracking do we need? According to the Miller’s law, the number of objects an average human can keep in mind at a time is 7 ± 2.
5-level Sales Funnel
In this light, the sales funnel model with 5 levels looks really reasonable and attractive. If we take only one indicator for each level, 5 KPI’s is the total number of measure units able to depict the entire sale process.
This number of KPI’s is:
- Enough to describe the general state of a business;
- Takes a little time for checking and comparison;
- Makes the whole sales funnel model useful and applicable to describe and interpret any particular online business.
So, what are the possible KPIs that can be useful in our case? Here they are:
Ecommerce KPI’s and Metrics
Reference Sales Funnels
Apparently, in order to say whether the whole process is successful or not, we need to design a reference sales funnel that is going to be considered as optimal.
It can be either the model built upon the current results, some previous successful metrics, or a benchmark we’d like to achieve in the nearest future.
Reference Sales Funnel
Now, each day, we will have two funnels: the reference funnel and the second one displaying the current performance. However, in this case, we approach the concept of dynamic sales funnels and funnel comparisons.
Sales Funnel Based Models
These funnels do not only need some measurements but also require some acceptance criteria for deviation measurements. It means that when you compare two funnels, you should determine maximally acceptable decreases in performance indicators.
Different funnel levels may have different acceptance criteria, at least due to the numeric value differences. From the picture below, you can see that the lowest possible decrement for the Sales funnel level is 10%.
Advanced Sales Funnel Model
This way, the funnel becomes complicated enough, so we start thinking about a tool able to present all the above information at once for a quick view. And, the first solution that comes to mind is Google Analytics.
However, sometimes, it doesn’t track all the conversions and can be inaccurate. So, tracking the performance on the Magento side can be more sound and reliable, and we have something to offer for this purpose.
Using our Advanced Reports extension for Magento 2, you can easily arrange your daily tracking with the provided performance dashboard. It allows tracking up to 10 parameters, including unique visitors, the number of orders, and conversion rates comparing the current performance with a particular period (reference funnel).
The Advanced Reports dashboard
You can also track deviations on the spot and have a complete picture of the funnel, at least of the stages that directly relate to your web store performance.
If you detect a decrease in sales, you will definitely need to localize the issue. Thus, you have to analyze sales from different angles, for example, by categories, locations, products, payment types, manufacturers, product attributes, and so on.
The Advanced Reports extension can provide you with all the above information and reports.
So, we determined that:
- Sales funnels are able to represent any particular online business with 5 main funnel levels;
- Tracking the 5 parameters of the funnel, we can draw a sufficient picture of our performance suitable for daily tracking;
- Using some specific tools, we can automate the tracking process, detect early negative performance changes, and localize the reasons for the decline.
Stay tuned for our next blog post where we will highlight the tools for ecommerce performance enhancements.