How to Track Revenue Like the E-Commerce Giants: 5 Trade Secrets
Updated March 22, 2023.
With the rise of e-commerce giants like Amazon, businesses of all kinds are realizing the need for revenue monitoring to make informed decisions. Revenue-tracking tools can help businesses monitor customer behavior, such as page visits, time spent on pages, items viewed, and conversion rates.
By understanding and adopting some revenue-tracking trade secrets learned from e-commerce giants, businesses can improve their bottom line, make data-driven decisions, and grow in an increasingly competitive e-commerce market.
1. Use Analytics Tools to Track Revenue
E-commerce giants implement analytics tools, like Google Analytics, to assess their sales performance, customer behavior, and marketing efficiency, then use these insights to inform improved strategies.
Some important key metrics to track for insight into performance are:
- Conversion rate - The percentage of store visitors who buy is the conversion rate. A high conversion rate means a business is converting visitors into customers.
- Average order value - This can show how much revenue each customer generates by looking at the amount spent on each of their orders.
- Customer lifetime value - This metric identifies how much a customer spends at a company throughout their business relationship. This helps determine each customer's long-term value.
Tracking all these can be daunting, so let's look at some tips for implementing analytics tools to track revenue effectively:
- In your analytics tool, define goals and events to track key metrics.
- Analyze the data to understand your store's performance. Use data trends and patterns to improve strategies.
- Determine which channels are delivering the most traffic and sales to your business and invest more in those.
» Want to know more? Find out how to boost Amazon sales using Google Analytics
2. Employ A/B Testing
A/B testing, also known as split testing, compares two versions of a web page, email, or other digital content. The two versions are shown to different groups of users, and the results are compared to see which one leads to more conversions, such as clicks, sign-ups, or purchases. Testing to find the most effective way to present products to customers can help increase conversion rates and drive more revenue.
For example, using A/B testing to determine the best place for the "Add to Cart" button on a product page helps find the placement that leads to the most conversions, thus increasing revenue.
To help implement this strategy, here are a few tips:
- Identify the key performance indicators (KPIs) you want to track, such as click-through rates, conversion rates, or revenue per visit.
- Decide what you want to test, such as changing the wording on a call-to-action button or using a different product image.
- Create two versions of the content you want to test, making sure that only one variable is changed between the two versions.
- Use a tool, like Google Optimize, to set up the A/B test and track the results.
3. Monitor Shopping Cart Abandonment
Shopping cart abandonment occurs when a customer adds items to their cart but leaves the website before completing the purchase. This leads to a loss of sales, which negatively impacts revenue. Businesses can use strategies, such as incentivizing with free shipping, simplifying checkout, and providing detailed product descriptions and images. These can help customers make informed decisions and feel encouraged to complete purchases.
For example, Shopify's built-in tool for abandoned checkouts allows businesses to see a list of all abandoned checkouts, including the customers' email addresses, the items in their carts, and the dates they abandoned the checkout.
By sending recovery emails, businesses can remind customers of their items and encourage them to complete their purchases.
» Find out more about the top e-commerce strategies to recover abandoned carts
4. Leverage Email Marketing
Email marketing is a valuable way for businesses to reach customers directly and send personalized messages tailored to their interests. By targeting customers' particular interests, a business can help get more people to visit their website and increase sales revenue.
Through email marketing, businesses can analyze email open rates and click-through rates, and monitor return on investment (ROI). By tracking these methods' metrics, businesses can gain insights into which emails and campaigns are driving the most revenue and make adjustments to improve future performance.
For example, Amazon uses email marketing to drive revenue by sending targeted emails based on customers' past purchases and preferences. If a customer bought a new laptop on Amazon, they may get emails about accessories or software that can accompany it.
5. Use Customer Segmentation
Customer segmentation is the process of dividing a customer base into groups of people with similar traits—like age, gender, location—and behaviors. This allows businesses to understand which groups are generating the most revenue and where there may be revenue growth opportunities. Using this technique allows businesses to target specific groups with tailored marketing campaigns, product offerings, and pricing strategies, which can lead to more sales.
For example, Amazon uses a customer's purchase history, how they browse the site, and other information to suggest products that are most likely to interest them.
By giving customers personalized suggestions, the likelihood of a customer making a purchase increases. This strategy can result in repeat business as customers feel that the retailer understands their needs and preferences.
» Unsure how to monitor your revenue? Learn about revenue analysis in e-commerce
Revenue-Tracking Takeaways from E-Commerce Giants
Businesses can gain more insight into the success of their products, services, and marketing strategies through various tools and methods. This can be game-changing when trying to reach new audiences, advertise different products, or work on increasing customer retention.
With BeProfit, monitoring metrics gathered from these techniques is straightforward. BeProfit's all-in-one platform helps you track your revenue, so you can focus on utilizing these e-commerce giants' tactics and make informed strategy changes where necessary to grow your business and increase your revenue.
» What to know how BeProfit can help? Book a demo today
