Author name: Team SmartSeller

If you run an ecommerce business and feel overwhelmed by understanding all of the data you generate every day across different platforms and tools, this content is for you. Today, we’ll discuss how to build a comprehensive and effective ecommerce analytics framework for your online business, without wasting time on superficial and irrelevant information. Because, ultimately, as an ecommerce manager, it’s crucial: 1) to have a clear view of the current state of your business; 2) to quickly access essential information to achieve established goals; and finally, 3) to make data-informed decisions swiftly and confidently. What Exactly Ecommerce Analytics Is All About? Think of your ecommerce as an airplane. To take off, have a smooth journey, and land safely, an airplane needs certain essential elements in place, such as: the right amount and type of fuel, all major electronic controls working, a compass, a well-trained crew, and all appropriate safety procedures. Just as the food served on board, for example, does not affect the plane’s ability to safely reach its destination (although it determines the airline’s reputation), an online business follows the same logic. Your ecommerce is like that airplane, and most likely, you spend much of your time dealing with minor (but not irrelevant) details and forget to assess if you have enough fuel to safely reach the final destination. Therefore, it’s crucial to create an analysis model for your ecommerce, which functions like a flight plan. This model will help you determine your ability to achieve your goals and monitor the performance of your “airplane” during the journey. How To Conduct Data Analysis For My Ecommerce? Continuing with the airplane analogy, you need to identify, first and foremost, what are the essential elements that can help you reach your destination. And even if you don’t yet know what that final destination is, it’s necessary, at least, to know which elements need to be in place to continue the journey and land safely (wherever that may be). Therefore, wrapping up the airplane analogy (I promise), you need to have a cockpit that serves to: In summary, assembling an ecommerce analytics model will function as a map, a compass, and a to-do list all at once. This model should help you know where, how, when, and why, enabling you to achieve your goals and enhance your ecommerce overall performance. But What Is Ecommerce Performance? Ecommerce performance, in summary, is the ability of your online store to deliver consistent results that you need in the short term to achieve your goals in the long-term. While this may seem basic, I want to introduce you to a new perspective on ecommerce performance. Stay with me. Knowing that performance is the ability of your ecommerce to deliver results, we need to understand what these “results” are, right? Because what is a satisfactory result for one ecommerce manager may not be for another. So, to clarify this issue, it’s important to take a step back and, before identifying what a “satisfactory result” is for your ecommerce, let’s discuss your personal goals. Every founder or stakeholder of an online business has their personal goals, and it’s from them that we start our process. You have a business that should meet your personal and professional objectives. Identifying these objectives as early as possible will be crucial to formulating a successful and achievable flight plan. Otherwise, you’ll be flying blind, which can result in excessive fuel consumption and compromise the safety of your journey. I hope the analogy makes sense to you. So, at this moment as you read this content, try to mark one of the options below, and it’s okay if this plan changes over time. But TODAY, which option best corresponds to your goals: There are three paths. Nothing more and nothing less. And everything begins with them. Each of these paths requires certain variables to be in place, considering a first principles approach. For example: If I want my ecommerce to sustain my personal lifestyle: The same applies to the other options presented. Simply quantify your goal and reverse engineer it into short and long-term milestones. Ultimately, it’s about achieving operational efficiency that consistently delivers profitability, as your compensation comes from your business’s profit.  An exit, for instance, will only be realized at a satisfactory price if the buyer sees value in your business and potential for return, which concept also applies to investments. Whether through venture capital or reinvestment, efficiency and profitability are the metrics of value. Therefore, outline your goal to quantify what performance means for YOUR BUSINESS, and then distill this goal to identify how to achieve greater efficiency from it. Now that you are able to understand the macro performance of your ecommerce, let’s delve into how to measure it. How To Measure The Performance Of My Ecommerce? An ecommerce is comprised of several “operational pillars” that could be divided into: Each of these pillars has its methods of performance evaluation, and as a manager, you need to have easy access to all of them when devising your future plans, analyzing the real-time health of your business, and assessing your ability to achieve your goals. And that’s what we’ll talk about now. Where Do Most People Go Wrong In This Process? During the past decade we’ve been in this industry, we’ve noticed that many ecommerce managers make the mistake of focusing exclusively on one of these pillars, neglecting the others, or analyzing them superficially. The result is superficial or limited data, which directly impacts the ecommerce’s success in the medium and long term. To prove my point, follow this example: All ecommerce managers know in detail the average ROAS of their campaigns, the best attributions to creatives, and the best channels. That’s an “ecommerce manager starter pack” kind of data-base. However, few know what is the minimum contribution margin they need in their operation and how it impacts their growth and pricing strategies (ultimately their ads bidding). And that’s what we’ll see next in this content: what are