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Andrew Kamphuis
 
August 3, 2010 | Ecommerce, Marketing | Andrew Kamphuis

The Two Most Important Wine Ecommerce Analytics You Should Evaluate Every Month

There are tens if not hundreds of analytic measurements you can conduct on your website. Unique visitors, page views, top content, where people are visiting your site from, are all great things to look at.

The two most powerful, but often overlooked measurements are conversion rate and customer retention rate.

Conversion Rate

Conversion rate is the total number of sales divided by the total number of people visiting your site. (Technically conversion rate is the number of goals achieved divided by the number of visits, and there are a number of measurements people use such as total number of sales divided by total number of carts started, etc – the important thing is to measure it consistently month over month).

Total Number Of Visitors
Total Number Of Sales

Conversion rate gives you a benchmark of how well your ecommerce is performing month over month. Once you have a measurement, you can start to play with factors that affect conversion rate including usability, content, navigation, etc. Try changing button sizes, minimizing steps to checkout, having larger images, etc and gauge whether it increases or decreases conversion rate.

(One of the best resources on the web for conversion rate optimization is the blog at Future Now Inc)

Customer Retention Rate

Customer retention refers to the percentage of customers that continue to return as customers with you after a given time period.

In the wine industry, customer retention should be measured in two areas:

  • Club retention rate: how many customers that were in your club last month and are still in your club this month.
  • Ecommerce retention rate: the number of customers who bought from your winery website last month who are placing an order this month. (You may prefer to use a longer time period than a month when measuring ecommerce retention)

                 Total Number of Club Members Last Month                
Total Number of Club Members That Remain In The Club This Month

It’s far easier and costs significantly less to retain customers than to gain new customers. Bautomation claims that a 2% increase in customer retention has the same effect as decreasing costs by 10%.

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The next time you are looking to see how well your ecommerce is performing, skip unique visitors and page views and calculate conversion and retention rates.

Comments

Alvaro's Gravatar
 
Alvaro
@ Aug 27, 2010 at 9:14 AM
Dear Andrew: ¿In your experience an average conversion rate and the Customer Retention Rate on wine ecommerce’s should be between what digits? Thanks for your answer, and good post!.

Andrew's Gravatar
 
Andrew
@ Aug 27, 2010 at 3:23 PM
Alvaro - there is a large variance and really depends on your market. In a month of all of your marketing is directed towards club members and fans, you conversion rate should be high. If instead you widen the net to include visitors, event registrants, and you maybe have some google ad words, your conversion rate will be considerably lower.

Similar scenario with retention rates. The strong your audience, the higher your retention rate. Start measuring this month, and just keep tracking it month over month. You'll get a feel for it.

Rose's Gravatar
 
Rose
@ Apr 9, 2011 at 8:08 AM
Is conversion rate total sales/ total visitors or total visitors/sales? your formula is the other way round. There are several websites which say conversion rate = sales/visitors, so now I'm confused. Please help!!!!

Andrew Kamphuis's Gravatar
 
Andrew Kamphuis
@ Apr 9, 2011 at 8:14 AM
Rose, your right it's total sales / total visitors.

Rose's Gravatar
 
Rose
@ Apr 9, 2011 at 8:27 AM
Thanks for clarifying that Andrew! Very nice article, thanks for simplfying these concepts.

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