How do you know if you are investing in the right products and shopping channels? What can you adjust to improve your ROI? Where are you losing money?
Data is key to optimizing comparison shopping engine and online marketplace campaign performance. The goal is to ensure you spend your marketing dollars more effectively and invest in the right product inventory.
But not all metrics are created equal. To maximize your effectiveness, you need to hone in on the numbers that allow you to address problems and identify opportunities.
That means tracking individual product performance as well as comparing channel performance. Doing this will allow you to optimize on a SKU level as well as better drive your overall strategy.
Here are the most valuable performance metrics to track for ecommerce marketing success.
Cost of Sale Percentage (COS%)
This metric allows you to determine how much you are paying to get a sale for a particular product. Using it will help you to clearly see which products are making you the most money and which ones have slim margins. This information will allow you to adjust bidding, rethink your marketing strategy, or exclude specific products altogether.
Estimated Cost of Sale (ECOS%)
GoDataFeed’s Estimated Cost of Sale (ECOS%) preempts cost of sale to avoid running up the tab on cost of sale for products that haven’t acquired a sale yet but are already accruing ad spend. ECOS% fills in the blank for COS% for products that have yet to convert.
This provides a reliable predictor of what the actual COS% might be, assuming the next click is a sale so you can take action on products before it’s too late.
Average order value
The basic rule of thumb is that you always want customers to spend as much as possible per transaction. Customer acquisition costs can be high, and you want to make the most of every conversion.
If you discover, for example, that Amazon customers spend far less per transaction than Sears Marketplace customers, you may want to work harder to get more customers on Sears. Alternatively, a lower average order value can be a red flag that you are missing out on opportunities, such as cross-promoting items and ensuring all sizes and styles of a product are available.
Return on Ad Spend (ROAS)
This metric tells you how much money a particular item earns you for every dollar you spend on advertising. This allows you to adjust your ad campaigns or weed out products not worth their high ad costs. Additionally, you can compare marketplaces against one other by looking at how much you are making for every marketing dollar spent on that site.
Average Cost per Click (Avg. CPC)
This metric is particularly important if your main goal is to increase your customer base, because it lets you know how much you are paying, on average, to get a single person to click on your product listing. You should look at this information for individual SKUs, so you can compare products against each other as well as learn the cost per click of your items as a whole on a particular channel.
Cost per Acquisition (CPA)
Of course, you don’t want to just know the cost per click. You want to know the cost per conversion. How much money are you paying, on average, to get someone to actually buy your products? You can then compare this to the price of the product to see which items are doing well and which ones are underperforming. And, naturally, you will be able to see if your CPA on one site is higher or lower than it is on another site.
Ultimately, all of these come back to revenue. How much are you making? Have your sales numbers improved? By analyzing and optimizing the above metrics, you should notice revenue growth over time. Don’t forget to compare year-to-year to take into account seasonal changes that can impact your growth.