“Understanding Jewelry ECommerce Data” Series Chapters:
Part 1: Customer Lifetime Value
Part 2: Sales Conversion Rate
Part 3: Average Order Value
Part 4: Cart Abandonment Rate
Part 5: Email Conversion Rate
Part 6: Social Media Conversion Rate
Part 7: Revenue By Traffic Source (you are here)
Part 8: Customer Acquisition Cost
How can you know where to spend your marketing budget if you don’t know which channel your revenue is coming from? It’s pretty impossible. Yet, jewelers around the country continue to keep dumping money into marketing channels without knowing which ones are actually improving their bottom line.
You may already have some insight by tracking clicks and visitors to your website by traffic source, but you’re likely only getting half the story. As I keep saying, clicks and visits are only part of the equation.
Which one of these scenarios do you think is better?
a) Getting 2,000 clicks that earn 10 sales and $2,000 profit
b) Getting 200 clicks that earn 200 sales and $8,000 profit
Looking at “clicks” is exciting. But you’re bound to have a traffic channel that has a higher ratio than others in terms of how many sales that channel gets for each 1,000 visits. Thats what we want to figure out.
Additionally, once you have the baseline numbers figured out, you’ll be able to keep an eye on the conversion rates for each traffic source, showing you that some campaigns are more efficient than others at driving revenue. This can be a good reminder not to rely too heavily on email, for example, but to diversify into retargeted ads, push notifications, etc.
“The data on the growing and shrinking traffic sources is very interesting because it not only helps us identify new trends in consumer behavior but also helps us identify where marketing dollars should be spent.” – Justin Butlion, Content and Social Marketing Manager of Yotpo.
Google marketing and email are typically the two most important marketing channels. Surprised it’s not social media?
“Which traffic sources contribute the most cash on a last click basis? If money makes the world go round, Google makes the world wide web go round, contributing a whopping 67% of revenue, 42% organic and 25% CPC. The next best non-direct channel for revenue is actually email. In fact, the combo of Google and Email represents almost three-quarters of revenue (73%).” – Alan Coleman, Founder and CEO of Wolfgang Digital (from Wolfgang E-Commerce Benchmarks 2016 Report).
Instagram seems like an obvious choice to invest money in – and it is. However, the majority of people clicking are not interested or able to buy anything at that moment. Email should be the driving force to get customers back to complete the final purchase.
Similarly, Google marketing pays huge dividends because you know you’re reaching people who are searching for exactly what you’re marketing.
In order to track Revenue by Traffic Source, you’ll need to use an analytics tool (such as Google Analytics or something similar) and set up ecommerce tracking. CLICK HERE for instructions.