Drive and Convert (Ep. 081): 9 Key Ecommerce Metrics You Should Be Tracking

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About This Episode:

In this episode of Drive & Convert, Jon and Ryan share important metrics for businesses to monitor including customer acquisition cost, customer lifetime value, and conversion rates. They stress the importance of understanding which metrics will impact the bottom line and align with the company’s strategic goals.

They also delve into the importance of tracking your raw data, channel mix metrics, and evaluating subscription and consumable products. 

Listen to the full episode if you want to learn:

1. How to determine and evaluate significant ecommerce metrics
2. Why you should focus on long-lasting customer relationships
3. What value can you get from post-purchase surveys
4. What is the “first-touch” metric
5. How to improve your own ecommerce metrics

If you have questions, ideas, or feedback to share, hit us up on Twitter. We’re @jonmacdonald and @ryangarrow.

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Episode Transcript:

Narrator:
You’re listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine, with Jon MacDonald and Ryan Garrow.

Jon:
Ryan, good to see you as always.

Speaker 1:
You’re listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine with Jon MacDonald and Ryan Garrow.

Ryan:
Well, Jon, welcome to a rainy spring in Oregon. I think it actually snowed my house in the end of April here. Good times. I can’t, I’m leaving Hawaii. I can’t wait for sunshine.

Jon:
They have spring break in Oregon and it’s great, but it never feels like spring because spring, spring doesn’t arrive until July 4th here.

Ryan:
Yeah, it’s insane. We were [inaudible 00:00:38] where it snowed while we were in the pool outside.

Jon:
That actually sounds fun. Maybe a hot tub, not a pool, but.

Ryan:
It was kind of fun getting out of the pool, back to the locker room, not fun. But you have been busy hauling your keyboard. You’ve pinned an article I found fairly fascinating around pulling data because there’s so many fun metrics you can look in analytics and get excited about or frustrated about. So many of them are worthless, but they’re there so people think they’re important. And so your article’s really good at hopefully helping business owners, marketing teams understand what the fluff and analytics is that distracts you from all the real stuff. And we were laughing before this about time on page and that being a metric that everybody wants to be, “Oh man, we got our time on page went up year over year, period over period. Isn’t that exciting?” I’m like, “Well, I could design a really confusing page for you that would keep people on there for a long time to do nothing.”

Jon:
Depends what you want to happen. The story I always come back to is when we had a client and they wanted us to overhaul their site and we sat down with all the leadership and they’re like, “We just want people to hang out on our site.” And they said, “Hang out. Are you trying to compete with Facebook? Like kill time? What are you trying to do?” “I think we need a music player on our site so people just come and hang out on”-

Ryan:
Were you talking to MySpace?

Jon:
And I seriously questioned whether they were a client we needed to be working with, and within a year, we weren’t working with them anymore because it was just fundamentally they did not understand online sales. And the reality is that they sell their products via dealer network. And that dealer network was 90% of their sales and they wanted to move to online, but they were old school. They did not understand the digital ecosystem and what people wanted to do online. And that led to them not selling much online eventually. And it was like pulling teeth. And so going back to those type of experiences across 14, almost 15 years in business now, it’s very easy to see who gets the metrics and who doesn’t. And that was part of why I wrote this article. I really want people to pay attention to the right data because pulling any data does not equal pulling the right data.

Ryan:
And I even simplified on a lot of my conversations with brand owners. I’m like, “If a banker is not going to get excited about this metric to give you money, that probably doesn’t matter.” It’s most simple. You’ve got multiple items here that bankers might not be too excited about, but they’re very valuable. And so I’m excited to go through a lot of these.

Jon:
I guess there’s a three-part test of whether or not you should be paying attention to metrics. And if they pass the three-part test, I think bankers would care in the end. They might not understand it completely because they’re not in it day to day, but they will understand if you clearly describe it as we’re going to talk about today why they’re important, they’ll get it. And the fact that you’re paying attention to these is probably more telling to them than whether or not the metric is actually a positive. They’re more concerned, “Are you paying attention to the right data? Because if you are, then you’re going to be successful or at least we have good odds, so we’re going to give you money.” And so I think it’s important that you’re paying attention to the right metrics. So let’s start off by talking about the three questions. Yeah, what

Ryan:
Are those three questions you ask yourself?

Jon:
First one, and why a banker’s going to care? If this metric changed, how big would the impact be on my company? The whole point here is if it’s not significant to the bottom line, it’s not going to be worth your effort to monitor it right now. You may have other goals that you’re putting metrics to that don’t affect the bottom line. Maybe you want to… I threw a bonus one in here at the end, a 10th. We’ll talk about that really isn’t going to impact your bottom line, but overall it would over time. And so maybe have goals around customer service, service, customer satisfaction, maybe time to response on customer inquiries, things of that sort that are overall brand initiatives that will help you have a better customer experience overall. But they’re not really e-commerce specific metrics, but they’re still valuable. So I think the first thing is, if you’re taking a first pass at these metrics, just evaluate is it significant to the bottom line?
And if it’s not, don’t worry about monitoring it. I think the second question is, will improving this metric contribute to the strategic goals? Now this goes into what I was just saying, but at the same point, improvement for its own sake is not enough. You don’t want a metric that you are just like, “I just know I need to improve that metric.” You need to determine which of these is going to make the biggest dent in your current goals. And I think that’s important that you have to have strategic alignment with these.
You can’t just be, “Well, Jon says I need to improve my conversion rate, so I’m going to improve it.” It needs to be why are you improving your conversion rate? And there’s a lot of instances, hear me out that a brand shouldn’t improve their conversion rate. Maybe you need to just focus on improving your average order value. Maybe you need to focus on being able to fulfill orders that you have because it is just coming in too much already. Improving your conversion rate is you’re never going to improve all the other metrics. You’re just going to hurt the other metrics.

Ryan:
Well, here’s a new slash, you could cut all your non-brand paid traffic and your conversion rate will increase.

Jon:
There you go, right?

Ryan:
There’s less sales, but hey, you got a pretty conversion rate.

Jon:
That’s a great point, and we’re going to talk about some of that today, a couple of these metrics. The third question is this a metric that will also improve other metrics? You don’t want to look to improve a metric in a vacuum, and that goes right to the point that you just made. You can improve your conversion rate by doing a lot of things. Heck, make all your products $1. Your conversion rate will skyrocket. So many of these metrics are connected, Ryan, and I know you know this, but I think it’s worth stating improving one just can create a domino effect and you want it to make sure it’s improving in the right way. So identify those key traffic channels that improve the quality of your traffic then work on doing sales conversions. So right order matters. So the three questions, if this metric changed, how big would the impact be on my company? Will improving this metric contribute to our strategic goals? And is this a metric that will also improve other metrics? So three things to keep in mind.

Ryan:
A couple things here. Get out of the box of analytics and the way it’s set up. And we’re all moving to GA4, which I think is going to reset a lot of things for brands and how they look at data. So I think this is a phenomenal time to be talking about these important metrics, but right now, just looking at the top bar of your analytics, just because all those things are green arrows doesn’t necessarily mean things are good. Google put them there. That doesn’t mean they’re valuable.

Jon:
Well, they might be valuable for Google. Why does Google have Google Analytics? We should all know this. Let’s just be honest. Why is it free? It helps you buy more ads, right? So that’s really all Google is looking to do with GA. Now, I’m not saying it doesn’t have other value, but let’s be honest about why Google is giving it to you.

Ryan:
Okay, so you’ve got nine metrics that you can’t skip over that you’ve got to pay attention to as an e-commerce brand. I’m going to randomly guess, I won’t even guess but I probably know what number one is. Number one, for e-commerce brands most important…

Jon:
Shocker to nobody, I’m going to say e-commerce conversion rate. And at the end of the day, your goal is to convert customers. So you really need to be paying attention to this. But I think more than telling if you’re successful, your conversion rate really helps you understand if you’re driving people to the right pages and the products on your site. So that’s the thing to keep in mind. Are you directing traffic to the right places that can highly influence your conversion rate? And I think it’s important to note that the average conversion rate, they vary drastically.
Now, we’ve done episodes on this, a really popular one that kind of took off on social probably because of the name and it’s a little in your face, but The Industry Benchmarks Are Bullshit. And I think that that’s accurate. The reality is the conversion rate for selling luxury watches is certainly not going to be the same as a low price clothing retailer. And so just make sure you look at those e-commerce metrics, benchmarks, I should say, with a bit of side eye and maybe don’t focus on competitors at all. Just worry about your own conversion rate and do it for the right reasons.

Ryan:
Again, we talked about it on that podcast. Your competitor has no incentive to tell you their real conversion rate and you don’t know what their strategy is.

Jon:
The stories I’m sure you and I could both share about what we see publicly versus what we see when we actually dive into the data. It’s a different world. And I think having a bit of skepticism is really healthy when it comes to this.

Ryan:
Okay. Number two, probably my favorite on your list. There’s so much you can do with this one that can impact a business so quickly.

Jon:
Yeah, average order of value, so AOV. I think that you should be looking at more ways to drive value from the traffic you get to your site. That’s where folks psychological position come in. You got to have the right traffic and then you need to have value coming out of that traffic. And one of the easiest ways to do that is increasing your AOV. Look, when you’re first starting out, you’re not going to get a lot of traffic. You’ll likely be focused on things like cross-selling, upselling, bundling, just to make sure people get what they need and to maximize your revenue. But if you don’t track AOV, you have no idea if it’s working. So really need to be tracking AOV. Pretty simple. So far we have conversion, AOV. These are things that everybody should already know about and be tracking from day one. If you’re not, turn this podcast off and just start doing that.

Ryan:
And if you’re just starting off, there was a great article over the weekend from Nick Sharma of Sharma Brands. He sends out a Sunday email that if you’re not on the list, go subscribe. No one said to send you there. But he’s a phenomenal business person. Launched a lot of brands and he talks a lot about, as you’re starting off in one of the metrics he focused on and gave some strategies specifically on Shopify for was AOV and go get it. That was the April 16th from Nick Sharma.

Jon:
Did you know that Nick wrote the intro to my-

Ryan:
I did. Yeah. You’re kind of a big deal. You are. But yeah, Nick is, he’s brilliant.

Jon:
Nick is kind of a big deal. I was just lucky enough to get his attention for a few minutes.

Ryan:
I’ll grab those coattails anytime. Nick, you want to be a guest? You can be our first guest.

Jon:
There you go. All right. Number three, customer lifetime value. I think the higher your lifetime value, the less you need to spend on acquiring new customers or the more risk you could take with that fund, right?

Ryan:
That’s what I like. More risk, push harder.

Jon:
Well, you could push harder, you can try new tactics. Maybe they’re not risky, but you can diversify. It’s probably what the better way to put that, right? So you want to develop long-lasting relationships with customers, really just for single purpose. Avoid dumping unnecessary money into acquisition. So one of the biggest marketing mistakes you can make is to view your customer base through the lens of one sale only. Now, Ryan, you and I have talked about this a lot in that one of the tactics you love is to break even on that first sale so that you’re not going to profit off that customer on the first sale, but you now have a marketing channel in.
You have their email, you have their info, you can continue to market to them, and you trust in your products enough to know that you’re going to get more out of them. So it really does take that big picture approach. I think that that’s important. It views them in customer’s in more of a lens of what they’ll produce for your company over the entire course of your relationship. And that’s important here. If you focus only on that first sale, you’re unlikely to be a profitable company in the long term.

Ryan:
Now this one and the next one, they aren’t as easy to get a number in analytics for this because it’s not necessarily site-based, there’s other systems. So if you are using a very basic email, you might have to do a little export of customer data to get something like these. But there are more complex CRM slash email systems that’ll help you get this number, figure out what it is for you.

Jon:
And also tools like Triple Whale can help you do that as well. They’ll help you track that and sync all of your systems together. There is a customer lifetime value built in to Shopify as well. So that’s there. The reality is all of them are going to give you a slightly different number, but they should be somewhat related.

Ryan:
Directionally close.

Jon:
Yes, yes, ideally, otherwise you might have attribution issues.

Narrator:
You’re listening to Drive and Convert, a podcast focused on e-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers. And Ryan Garrow of Logical Position, the digital marketing agency offering paper click management, search engine optimization, and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you.

Jon:
Okay, so customer retention rate is the next one. This is one that I don’t hear mentioned very often. It goes with customer lifetime value, but if you’re losing these customers as quickly as you’re acquiring them, there’s something seriously wrong with your product or your customer relationship strategy, maybe your customer service. So you really want to understand why people are leaving. You want repeat customers. The reality is the metric of lifetime value is, “Okay, what do these people spend over the entire lifetime?” A customer retention rate is, can you get them to keep coming back? Maybe you have a subscription model, something of that sort, a product that is consumable that you want people to continually come back and order. This metric specifically attracts the ability to retain customers, and I think that’s important. So you’re not looking at the value. You’re looking at, are you retaining?
So pretty quick math on this to find the customer retention rate, you subtract the number of new customers gained during a period from the number of customers at the end of that period. Then you divide that number that you had at the beginning and you multiply by 100. So we can write this down, but it’s subtract the number of new customers gained from the number of customers at the end of a specific period. So you take a month, say, we had 100 new customers and we had 1000 overall. So that gives us 900. Then you divide by the number of customers you had at the beginning. So divide by 1000 and multiply by 100, just gives you a percentage. So the metric directly correlates with customer satisfaction, loyalty, things of that sort. And I think this is an important one that I think bankers actually really care about, but they’re not going to ask you for it. But if you have a good customer retention rate, you should be touting that to your funding sources.

Ryan:
How do you look at a lost customer? If they’re still in your database but they haven’t bought in a certain period, you just have like, “Oh, if they haven’t bought in six months, they’re a gone customer at this point.”

Jon:
Yeah. So let’s say what I would look at is if you have a subscription product, how many people have canceled a subscription? If you know a consumable should take somebody two weeks to use or a month to use, or three months, whatever it is, that should be your time period. Are they reordering within a reasonable amount of time after that period? So let’s say you are selling soap or shower gel of something of that sort, body wash. You know that 12 ounces of body wash should generally last people a month. Now, are they ordering every, let’s just say within 45 days? If not, they probably are not coming back. So you have some reasonable timeframe in there for them to reorder, but if they’re not, then you should probably count them if you have a consumable. This is less helpful if you have a clothing brand, something of that sort. But for consumables, subscription products, et cetera, this is key.

Ryan:
And winback campaigns should be a piece of that. If this is your segment of lost customers, they go into a different bucket that gets different types of nurture emails, assuming they’re still in that database and can’t be emailed because it’s different. They may need steep discounts to come back. They need more incentive potentially. And if you’re a brand, I talked to so many that get all excited about their one product and don’t even think about if it’s not consumable, “What do you mean I have to have another product?” Think about the Purple and the Casper’s of the world that lose a disgusting amount of money on the first order. So they’ve got to sell pillows, they’ve got to sell sheets, they’ve got to sell bed frames, they’ve got to sell nightstands. Everything in the house is starting to appear on those sites now. They are a home site just because they can’t make money on the product that’s core to their business.

Jon:
Yeah, I question the business model in those cases, but yes, you’re right, they have to sell. Okay, the next one, customer acquisition costs. Now this is one a lot more about than I do I’m sure, but it’s a total amount you’ll typically spend in order to bring in a new customer. It’s all in the name. Some call this a startup killer because many new customers start with a really high sales and marketing spend to attract new leads. Like you said, Casper, Purple, et cetera, went through this, right? Then they end up with a relatively low number of leads that convert, which gives you a very high customer acquisition cost. I don’t think this is a sustainable business model, and that’s why you want to pay attention to this because if your customer acquisition cost is so high that the customer lifetime value is never going to cover for it, then you unfortunately aren’t running a profitable business.
And you really need to give that a look. It’s one thing if you want to play the game that all those big name brands you mentioned have where they go out and they raise hundreds of millions of dollars and then they’re burning through that cash just to get out there hoping that the snowball effect will come. The reality is that works out in very few cases. So this metric is calculated by dividing your total sales and marketing costs for a given period by the number of new customers acquired during that period. So I get the question a lot, which sales and marketing costs do you consider? And really all of them, every dollar, every cent should be considered including-

Ryan:
Agency. You have to figure that in too if you’re paying an agency.

Jon:
Exactly. 100%. And I say that, Ryan, because so many people look at only the costs that they are using to drive traffic. And I don’t think that’s accurate. I think it’s brand awareness, it’s social campaigns, everything you’re doing, whether or not you were trying to actually convert that into a sale or just drive brand awareness, it all needs to be considered.

Ryan:
This is a very tricky one for so many brands. If you’re launching a brand, you have customer acquisition, bottom of the funnel, Google, Google Shopping, some social is in that area and that you can track. A return on ad spend, you got a very clear acquisition cost like, “Oh, my top line’s read 100 per order and I spent 50 to get it. I broke even. Isn’t that great?” Well, you also maybe had some Pinterest money branding that didn’t come up with any return. You can’t just ignore that and think Google’s working. SEO that goes into, maybe it’s the early parts of SEO that isn’t driving enough traffic yet because it’s not far enough down the funnel. Maybe you bought a radio ad or your light money on fire branding, I call it.
It’s valuable, but you don’t see anything of that tangible necessarily. It’s filtering down to brand traffic that’s helping Google become closer to break even. So many complicated things are going to [inaudible 00:19:36] that just get ignored and companies think they’re doing really good and then they get a savvy investor coming in be like, “Ha, nope, you’re not sustainable.” And it’s like in the beauty space, it’s tremendously unprofitable to launch a beauty brand. You’ve got to have some money behind. If you get to the tipping point where your lifetime value kicks in and you start churning that snowball, that’s up a big enough hill. So look at this one deeper because it is often incorrect. That’s what brand is reporting.

Jon:
I would agree with that. Again, it’s not paying attention to your competition. I think that’s going to make a big difference. All right, next one number. What are we on, six?

Ryan:
Six, yes.

Jon:
Yeah, shopping cart abandonment rate. So this is a big one because personally it hurts me and I’m sure it does. All the brands we work with when potential buyers load up in their shopping cart and abandon it before they actually complete the purchase. And there’s a variety of reasons that this happens. I think we have a whole episode on this. If we don’t, we need to have one. I should add it to the list. But off the top of my head, unexpected additional fees, high shipping costs, guest checkouts not available. Maybe you’re making people register-

Ryan:
Or it’s either confusing, the new Shopify checkout.

Jon:
Yeah, people were used to the old one, but we’ll see where this ends up. But I think part of that is just having a longer checkout process that goes beyond that single page, multiple steps. Even if they’re inside the same page, the less steps the better. And I think that’s where the new Shopify checkout can create some concerns. I think payment security. So if people are like, “This isn’t a secure site,” for a number of reasons, whether or not it has SSL. It could be the design is just Craigslist. I wouldn’t want to give my credit card to Craigslist, but-

Ryan:
Nothing good but can come from giving your credit card to Craigslist.

Jon:
But there are places that I would say the design is a four out of 10, then I’m like, “Eh, it’s trustworthy enough. I’ll give them my number.” And that’s really all it needs to be. And then maybe it’s just a horrible user experience. People just can’t find what they’re looking for. The list could go on. That’s just a handful of quick things. But in general, high cart abandonment is just, it’s a telltale sign that something in your checkout isn’t working. So first thing you should do, if you see this, just do a test purchase. Have your mom do a test purchase.

Ryan:
What would be the red flag number for a high checkout rate? Because it can vary of course, across brands. But what’s the one that says-

Jon:
Well, that’s the other thing. We’ve seen 50% for really high touch purchases and we’ve seen some that are less than 10%. So I think I’m hesitant to state a specific number like usual because it really depends on your brand. I think the thing that you should be looking for is that number continually going down. So that’s the thing to keep an eye on, is can you help affect that number through all these ways we’ve talked about? So it’s really just a spot, a red flag and then know it’s something you need to work on.

Ryan:
And if there’s a big change, if all of a sudden you’re like, what happened to revenue? And you notice shopping cart abandonment, that’s where we saw some of the Shopify issues with their new checkout. Shopping cart abandonment went through the roof. We’re like, “Oh my goodness.”

Jon:
And that’s because quite honestly, I think Shopify mishandled that. They should have put a banner up in the new checkout that says, Hey, this is our new checkout experience, let us know what you think. Or something like that. But here’s the problem is that they just up and changed it one day and everybody on the internet was used to checking out with the old Shopify checkout. So when they saw the new one, they were like, “Whoa, this is not Shopify.”

Ryan:
Something’s stealing information. Something’s wrong.

Jon:
Exactly. Yep. They lost trust. And so that’s going to happen over time and that’s why I said it’s a blip. It will come back, it’ll be fine.

Ryan:
It’s a good decision they made, I think what they did, but it’s just, oops, you hurt a lot of brands unintentionally very quickly.

Jon:
Quickly. It’s one of those where they had to rip the bandaid and I think they could have done it better to not make it hurt so much. But yeah, that is what it is now it’s too late. So hopefully it improves. But continuing down the list here, return on ad spend or our favorite term, ROAS. If you don’t know how much you’re spending to drive new revenue, you can easily spend more than you’re making. Obviously that’s a recipe for disaster. So you should track your ROAS by understanding what your revenue from advertising is. Divide that by your cost of advertising that gives you your ROAS. So let’s say you spend $3000 on pay per click, you determine it generates 12,000 and revenue. So 12,000 divided by 3000 is four. That means for every dollar you spend on advertising, you’re generating $4 in revenue. That’s a decent return on ad spend. Maybe you would know more.

Ryan:
It all depends. If your margin’s 10%, it might be terrible.

Jon:
There you go. So by regularly tracking your ROAS though, you can evaluate which campaigns are working and you can go to your board or your leadership team or anybody else, and your wife, your financial partner, your husband, and just say, “Okay, we’re going to keep investing in this.” Because I know future advertising is going to generate an X return based on the past and it might fluctuate here and there, but generally this is the trend we’re on. So I feel comfortable continuing to invest. And that’s really the goal. Number eight channel mix metrics. So to understand how well your marketing channels are working, you should track metrics like conversion rate, abandonment, AOV on a channel by channel basis. And this is where tools like Triple Whale, et cetera can really help, right? Because they’re allowing you to do that. I feel like this is a more advanced metric, that’s why it’s further down the list.
But I think it’s important. It’s important to know where good traffic is coming from. And that’s really the key here. When you understand this, you can begin to examine that experience for each channel and then dive into the why behind each of the numbers. So if you’re looking at maybe your conversion rates on a per channel basis, you can tell if your marketing efforts are successful and if the journey that the person’s on, the visitor’s on has delivered what they want and what’s been promised in that initial brand interaction. So is your ad spend on Google display ads leading to conversions? And if it’s not that specific channel, maybe it needs a new message. Maybe they’re setting a false expectation in some way that’s not helping once people get to your site. So be looking at all of these by the channel is really the summary of that one.

Ryan:
And understand too that not every channel is equal or in the same part of the funnel, so you’re going to have different conversion rates between Meta and Google. And if you don’t, something might be often how you’re looking at those, but just again, you’re trying to improve it over time so that channel shouldn’t stay static and always be the same number or going down. It should be trending in the right direction.

Jon:
That’s a great point. All right, number nine is net promoter score. So if you don’t know what NPS is, basically this is a metric that you need to be tracking to analyze how good your fulfillment and your products are. It’s more of a post-purchase metric. But I think it’s an important one. It helps you answer, are you delivering a strong customer experience? You can also look at this via return rate and reviews on your site. But NPS is a really comprehensive way to do this and it’s a standard. So it really does help you to get a bank loan because banks are going to know what NPS is. An analyst should know what NPS is. If they don’t, you probably don’t want to take their money. Or maybe you do because-

Ryan:
Just take it.

Jon:
… Giving it away. I don’t know.

Ryan:
Don’t give them a board seat.

Jon:
So I think this metric’s less tangible than other ones including on this list, but that should not downplay its significance. So what is NPS? It’s a survey that measures how likely your customers would be to recommend your products or services to a friend. Pretty simple. It’s determined by sending out a survey, you’d send it to a sample. You don’t have to send it to everybody, but ask them how likely they would be to recommend your brand on a scale of one to 10. So customers that respond with an nine or 10 are referred to as promoters, net promoters. Seven or eight are considered neutral. That’s good, but they’re not detractors. Anything below a seven is a detractor.
That’s somebody who probably not going to promote you that well. Or if they do, they’re going to be like, “Yeah, I bought something, but it took six weeks for it to arrive.” So they’re going to end that recommendation with a negative, which is really a detraction. So calculate this by simply subtracting the percentage of detractors from the percentage of promoters. That’s going to give you your net promoter score. This is a big metric that most marketers are going to know, but in e-commerce, I don’t see it used enough. There are Hotjar, et cetera. There’s a couple other survey tools that this is a templated survey they offer. So most of those survey tools have made it super easy. Have you done any NPS before?

Ryan:
I have not. We’ve done it at logical position over the years. I don’t know if we’ve done one recently in the last year or two, but it’s been an important metric. And guessing we’ll do one this year. And even sub-setting our customer base. Because if you have different markets, in our business, for example, we have enterprise clients that are generally the larger brands, spending more money than we have SMBs that are usually smaller local businesses. And those have different account styles, different management styles. And so understanding inside our book what is an NPS of enterprise versus this. So anytime you have different account teams or different strategies involved, it’d be important to look at that differently in your client base to figure out if certain products or certain styles of customer support are impacting that differently than other parts of the business.

Jon:
And really this data takes on a life when you do it year over year, quarter, quarter, et cetera. Having just one time snapshot is helpful, but it’s much more helpful when you plot a trend because it is something you want to work on improving. All right. So we have a bonus one here-

Ryan:
You got a bonus. I like it. Love bonuses.

Jon:
This has turned into a long episode, but I think these are all important, but a bonus one is first touch. So what is that first touch point? It’s not really a metric and that’s why it’s a bonus on this list, but I think it’s something that you need to understand that that really tells you what is working and what’s not to help drive traffic to your site. So attribution is key here. There’s a lot of models out there. I’ve said Triple Whale’s name three or four times. Just I like saying that name. It’s fun. But just consider a post-purchase survey to better understand that first touchpoint customers have with your business. Too many brands don’t do this and it’s so easy.
There’s so many plugins for Shopify that have this. Just add one, they’re super cheap. The data is way more than whatever you’re paying to have that little post-purchase survey there and just ask how’d they hear about you in the first place. That’s all you need to know. And that will help you understand where customers are coming from. We just did a huge quarter project here at The Good around this to understand exactly where we’re getting new customers from and it was super enlightening and it has had a big effect on where we market and invest money there. So yeah, all in all 10 metrics now that you should be looking at. I think you’re really important.

Ryan:
And a note on that survey, especially what we found out accidentally was how a client start doing this at our request to help solve some of their top of funnel issues. And they had been advertising on TikTok, thought it was hot garbage. I’m like, “Hey, it’s not working. Why are we spending money here? Stop.” Due to post purchase survey, found out so many of their new customers had first heard about them on TikTok. It’s not a conversion channel. You don’t usually leave TikTok because you’re enjoying the entertainment of scrolling through and seeing everything, but you pay attention to those ads there and new suggestions for content. Blew our team away because we’re always looking at that analytics. We’re not seeing anything coming from TikTok. We’ve got to figure out if it’s working because you’ve invested a good amount in your organic traffic and ads. So if you’re spending on TikTok, you’d better get some post-purchase survey to see if it’s actually having an impact on other channels because it likely is and it’ll surprise you.

Jon:
That’s a great use of it. Well, Ryan, all in all, hopefully people start tracking the right metrics, not just metrics for the heck of it. I think there’s such a thing we don’t have time to really dive into, but as tracking too many metrics and having all these dashboards with 30 different charts on it, really start at the top of the list we talked about today and work your way down and start to be familiar with them. Paying attention to these metrics is going to get you a lot further than not, but don’t track 30 metrics. Just start with a handful here. Don’t be overwhelmed and then look at them every day once a week. Just have a consistency to reviewing these so you have a good idea of where things are at and what the trend lines look like and what actions are going to impact those.

Ryan:
If you make changes because you’ve got to change things to expect results to be different. And if you’re doing the same thing and you expect your metrics just to change for no reason, I don’t know why you’re doing that, but notate your changes in analytics so you can go back and see what the changes are. And Don will tell you, you can’t change everything all at once or you don’t know what had the impact. So make a change, measure the impacts for a couple weeks. If you’re smaller, you’re not going to get the enough data to really prove it for sure. But as a business owner, you’re going to have a gut feeling that’s going to, that’s valuable to say, “Yeah, I believe that change did have a positive impact. We’re going to keep that and we’re going to go take an exchange.” But if you’re not tracking, you can’t improve them. So yeah, take Jon’s advice.

Jon:
Well said. Well said. All right, well thank you, Ryan.

Ryan:
Thank you, Jon.

Jon:
I appreciate the chat today.

Narrator:
Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com.