Limitations of Google Analytics

For small businesses to medium businesses (below enterprise level), Google Analytics (GA) is one of the best “free” tools available to better understand one’s data. It provides a high confidence level, is precise (if configured properly), & can provide numerous relevant insights about one’s data. However, GA has plenty of limitations & tradeoffs.

Google Analytics never tells you, “Why?”

Google Analytics never answers, “Why?” about website users’ behavior. This is by far, the most significant limitation to be aware of. Quantitative data, KPIs, & metrics all have their limits. You still need to talk & listen to your customers (even if you have Google Analytics 360 Suite).

Let’s run through a few of the other main Google Analytics limitations.

 

Table of Contents

Accuracy

  • GA is not 100% accurate & it never will be. It’s an analytics tool, not a silver bullet cure-all.

  • There’s a lag in receiving data. This can vary, but a safe cushion is to avoid making decisions based on data < 48 hours old. Particularly, for a standard GA account exceeding 200,000 sessions per day, both reporting & metrics can be delayed up to 2 days.

Spam

Spam is a major issue, potentially polluting your data in GA (and we know how important it is to utilize clean data). Unfortunately, there’s no easy solution. There’s one setting to assist with filtering spam, but one has to select it in their View Settings.

Scope Types for Google Analytics 

There’s a hierarchy or order to how GA processes data. This applies to areas such as reporting, filters & channels. It impacts one’s reports. (If you want to read further about scope type metrics vs. measurement).

GA data is organized into 4 scope-types:

  1. User data (each cookie tied to one’s browser)
  2. Session data (by default, a visit within 30 minutes)
  3. Hit data (a single action)
  4. Product data* (Enhanced E-commerce only & only for Custom Metrics/Dimensions)

User

  • User (or visitor or unique visitor) = the number of unique cookies that have been seen over a specified period of time
  • New User = first-time users or first-time visitors
  • Returning User = returning visitor so they have initiated at least 1 session before.

Session

  • A visit within 30 mins. = 1 Session
  • New Sessions = First time visitors (no prior cookie, user has deleted their cookies, or a new device used)
  • Returning Session = Google has seen their cookie before

Hit

  • A single action that's timestamped, organized, & connected together based on the Client-ID or User-ID
  • Pageviews, Events, & Transactions are the most common Hits
  • Hits can have products associated with them
  • Hits can be classified as either interaction or non-interaction events

Four-scope-types-in-Google-Analytics

Cookies

GA is cookie based tied to one’s browser. Therefore, users clearing out cookies, blocking them, using multiple devices, etc. can all skew one’s data.

For example, a single user can have multiple Sessions if each session occurs outside of 30 mins., they delete their cookies, they use another device, or a combination of these. Thus, the totals for Users, Sessions, & Pageviews in GA, can become skewed very easily.

Goals

There’s a limit of 20 goals per View in GA regardless of the type of goal. (There are 2 main types of Goals in GA, a Destination (Page) goal or an Event goal. Duration goals & Pages/Screens per session are the other types).

Only Destination or Page goals can be used with Goal Funnels. Thus, one cannot mix and match between Page & Event Goals for a Goal Funnel with standard GA (with GA 360 one is able to).

Goals, can be underutilized in GA, especially for micro-goals. Understanding, tracking, & measuring both macro & micro goals is essential for any business.

Events

Tracking events (Event tracking) that don’t require a page being loaded or refreshed requires additional configurations. Because activity (hits) are tracked by pageviews or a page reloading/refreshing, one has to either make additional configurations to the GA tracking code, use Google Tag Manager, or rely on other tools to understand events or interactions that don’t require a page being loaded or refreshed.

A few examples that typically require Event tracking rather than a Goal, include: playing a video, downloading a document, clicking on “quick shop”, or adding an item to a wishlist.

Filters

  • If you don’t know what you’re doing especially in regards to filters & configurations, you can corrupt your data. This is why it’s so important to setup multiple views in GA (each property can have up to 25 views) and understand configurations impact on your data.

However, using only the reports section of Google Analytics will not break your website.

Direct Traffic

  • Direct traffic is an “unknown” figure. We don’t know why someone directly entered our website into their browser or clicked on a link that wasn’t tagged. This is the primary reason why we use UTM parameters or perform campaign tagging; to better understand direct traffic. You’ll never have 100% certainty with understanding all of your direct traffic, but that doesn’t mean you shouldn’t improve your understanding of it.

  • UTM parameters “…are an imperfect solution.” While Google’s Campaign URL Builder is an important tool to utilize, there are additional considerations to be aware of regarding campaign tagging.

Site Speed & Network Speed 

  • The Site Speed report default sampling size is 1% of your site’s visitors (It can be increased to 100% with adjustments to the GA tracking code or tracked using Google Tag Manager). This report relies on a mixed number of devices (unless you segment).

It’s best to think of this Site Speed report helping alert you about potential slowness of your website for users. There are better options for describing why your site or pages are slow. (While I don’t know how much, most sites are leaving $ on the table because of slowness). I highly recommend prioritizing improving your site’s speed.

  • While we can access numerous details about visitors, GA doesn’t know the network speed of our visitors. They could be accessing your site via: 3G?, 4G?, LTE?, or even via a slower connection.

Bounce Rate

Bounce Rate out of the box can be extremely misleading. (It doesn’t factor dwell time & doesn’t understand context). Additionally, if one doesn’t have event tracking properly configured on relevant pages, to account for behavior or events such as playing a video or clicking a download button, these types of visitors can be included in the bounce rate.

Social Media

Keep in mind, Google Analytics was launched in 2005 (i.e. long before social media). Thus, it lags behind in some key areas regarding social media reporting. For instance, the default Channels don’t account for paid social & there can be inconsistencies with social media in some of the reports.

AdWords & Search Console

  • Google AdWords & Google Search Console are not connected to your GA account. You’ll need to connect them yourself.

  • Search queries from Search Console data only go back 90 days from today’s date. (*Update: With the new Google Search Console Beta, one’s able to now access search queries up to 16 months prior from today’s date*). It still shocks me in 2018, how few of sites use Search Console. While extremely helpful for technical SEO, it can help better understand user search queries (for example, it can help with understanding some of the “Not provided” keywords) & serves as a security watchdog for your site. And, it’s free.

  • If your site is growing rapidly, there are some growth pains with GA & Search Console. Namely, if your search query volume exceeds 1,000 queries or landing page URLs, you’ll have limited reporting in GA & Search Console. You can only view up to 1,000 rows of search queries or landing page URLs.

Segments

For Segments, the sample size is not always 100% accurate. If one has a large amount of data in their segment, they may experience data sampling, which can skew things. The work around is to use secondary dimensions, table filters, & smaller timeframes.

  • “Default reports are unsampled in both Analytics Standard and Analytics 360.”
  • If one modifies a default report, such as applying segments, filters, secondary dimensions or creating custom reports, these are all subject to data sampling thresholds.
  • Sampling occurs when at or exceeding “...500k sessions at the property level for the date range…” one is using.
  • GA 360 Suite (premium) threshold is, “…100M sessions at the view level for the date range…” one is using. Google Analytics 360 Suite also costs around $150,000 per year.

Hits

  • 10 million hits per month per property, is the limit for tracking a web property in standard GA.

  • 200,000 hits per user per day & 500 hits per session are additional limits, for both standard GA and GA 360 Suite, utilizing the Universal Analytics (analytics.js) tracking code.

  • The vast majority of changes in GA do not apply to prior historical data. One exception is the “Custom Channel Groupings”, which can be retroactively applied to prior data.

Funnels

  • GA Funnels only work moving forward. (Also, one cannot use Event goals in Goal Funnels with standard GA). We all know that “funnels” command a lot of attention in 2017, but any knowledgeable optimization expert will examine other reports besides just your GA funnel. (There are a host of other related issues that can impact one’s funnel as well from improper setup to lack of segmentation).

  • The challenges with funnels in standard GA (with default settings) is that one is really looking at sessions & cookies, not unique users or people. Many people are trying to understand user behavior by comparing & equating it with session behavior, which typically is not one-and-the-same.

  • Multi-Channel Funnels reports only work if Goals or E-Commerce Transactions are setup properly beforehand.

Google Analytics API

Google Analytics API can help with automating reporting. However, some data from the API, such as the Multi-Channel Funnels report, have a limited lookback window (it’s only 30 days for this data). Thus, if one is reviewing reports in the webpage GA interface vs. a spreadsheet or dashboard that’s being fed by the API, there’ll be significant discrepancies.

 

Just as a website has numerous moving parts, so does Google Analytics. This is not a comprehensive list of limitations/tradeoffs with Google Analytics, but it’s some main ones to evaluate & be aware of.

What frustrates you the most about Google Analytics?

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Brian Soell

Founder / Chief Marketing Officer of SiteUpturn

Brian is the founder & CMO of SiteUpturn. You can find him on LinkedIn.

Ready to take the next step. Let's talk.


Customer Interviews & Feedback

If there's one main takeaway for you, regardless if we work together or not, it's to talk & listen more to your customers. Ask better questions, listen, & learn to find the insights! It doesn't make for fancy headlines or front-page material on a lot of websites, but its value cannot be ignored.

Why Customer Interviews? 

You understand the importance of buyer/customer personas, yet customer demographic information only goes so far. This type of information does not account for the complexities of human beings, namely human behavior. If you're creating buyer/customer personas simply on demographic type of information, there are serious gaps in your business.

Demographics often betray. Behavior rarely does. 

Look at how behavior might not track to what demographics & typical assumptions might have one believe.

Google study on potential customers demographics might miss

Video game purchases stat from Google

Baby product purchases stat from Google

Source: Google

We also know visitors & customers are at different phases in the buying cycle. Yet, how many seemingly solid marketing campaigns fail or perform poorly because the creative & content did not properly align with the mood, psychology, & timing of one's audience.

Plus, even with the best collection methods & the fanciest software,
Quantitative Data never tells you, "Why?"

Why would you not want to understand your customers better?

Conversations with your customers can benefit your business in countless ways, everything from improving your copy to providing a better experience for them. Plus, relative to other means & costs, interviews cost very little, while they can provide a significant ROI.

 

2 Elephants in the Room

After speaking with business owners, I've learned it's often not because they don't see the ROI, but rather 2 key factors prevent these types of conversations from ever happening.

Praise You?

I have nothing against Fatboy Slim or Christopher Walken's dance moves, but the truth is, your business sometimes needs honesty, not always praise. Praise certainly has its time & place, but not here. Approach these customer conversations with a willingness to learn & listen. (And no hard feelings if you're cursing at me here).

"This is Embarrassing!"

So you've overcome the "we only listen to praise" bias, yet I know a lot of you are thinking, "We can't show our customers what we don't know. That's too embarrassing!"

The vast majority of humans like doing business with other humans. You're not the T-1000 (thank goodness), demonstrate you're human. Channel your inner Brené Brown, courage wolf, or Zen master, feel the fear...& do it anyway. (Just think about how many times in life, you've stood tall & have stared down fear). You've got this.

 

Have Conversations & Interviews 

These are not product review requests. Those are important as well, but we're talking about conversations & interviews here. If _____(Oprah, Ellen, Conan, or Edward Murrow) contacted you, which is more appealing?

"I'd like you to complete a survey.

vs.

"Let's talk. I want to schedule an interview with you."

Avoid using the term "survey" when communicating with customers. The reality is, there can be negative connotations (thank you spammers & robocalls) with the word, "survey." Instead, inform them you value their feedback & want to interview them. People don't want to complete surveys. They very much want to know their experiences, voice, & perspectives matter.

 

Steps for Creating Your Interviews 

To reiterate, these are not product review requests or simply a NPS type question. Both of these are really valuable as well, but we're talking about conversations & interviews here. There's no perfect question to ask & this is a basic outline. Please modify & adapt it to your business accordingly.

1. Create your interview/feedback questions. Here's an Example Customer Feedback Form For B2C to evaluate & help you with possible questions to ask.

The 3 main areas to cover with your questions are their behavior & thoughts...

  • before purchasing (pre-purchase)
  • while making the purchase (during purchase)
  • after they've purchased (post-purchase)

Or framed another way: their behavior, their considerations & obstacles with purchasing, & their mindset.

Avoid asking these types of ?’s:

  • What do you think about this product or feature?
  • Do you think you would buy/use this new product or feature?

Tip: Use close-ended questions when seeking to confirm your hypotheses & open-ended questions to find out what you don't know or are uncertain about.

2. Get aspirational. Think about the aspirations of your customers that might be long-term. There are many short-term problems or needs that are a means to an end & are connected to longer term aspirations. For instance, someone might have immediate needs for running gear & training software to help them run a marathon. However, they might be running the marathon to raise $ for a family member, friend, or cause (and are not a frequent marathoner or even much of a long-distance runner).

3. Don't ignore demographics completely. Especially in the context of which communities/groups/organizations your customers belong to, what their trusted sources & resources are, which tools they use on a daily or weekly basis, etc. there might be some relevant connections with your business, products, & services.

4. Create a form or document to save their responses & share with other relevant team members. There are numerous options to assist with asking questions & recording responses. Typeform, Paperform, & Google Forms, are just a few form resources to consider. There are also plenty of screen recording options if interviews are conducted online or even a voice recording app can be used, if conducted in-person.

5. Create a basic script for outreach or not. (I know some people hate scripts & others cannot function without them). Either way & regardless of medium, ask your customers permission to chat with them & personalize as much as possible (no mail merges Allowed)!

6. Identify which customers to reach out to. What's an important KPI? (Probably a good place to start).

7. Determine where to interact with your customers.

Include a link & a CTA, whether it's a link to the feedback form or a way to schedule a phone call. Here are some suggestions for where to provide a link.

  • On the packing slip or receipt you send with a customer's order (go one step further, why not personalize it?)
  • Email some of your most valuable customers
  • Private message them on social media
  • Text them

Or just call them.

8. Schedule time for these interviews.

Whether it's simply adding it to a calendar or a project management software, it's important to schedule time. Consider blocking out 1 hour on a specific day each week for example. Also, consider using a scheduling type of software such as Acuity or Schedule Once, which will hopefully, result in a more productive use of time all around.

9. Pick up the phone or Meet in-person. 

Forms can be helpful & we all use email/messaging everyday, but I recommend calling at least a few customers, (even if you primarily use a form).

10. Evaluate if you need to offer some type of incentive. Response rates can improve with an incentive. However, this can be a slippery slope for sure. If you do offer an incentive, ensure the customer only receives it after they've completed providing feedback to you.

11. Direct the interviewee to the relevant form for recording their responses or record their responses yourself.

12. Analyze to find insights. Do you notice any patterns? What are the connections between the qualitative & quantitative data (especially since we know what people say doesn't always correspond with their behavior)? (Besides spreadsheets, I find mind maps to be incredibly helpful for organizing key takeaways & prioritizing what to address further).

Source: RocketWatcher

13. Evaluate how to incorporate into other frameworks and testing processes, such as the Value Proposition Canvas , your positioning, your customer acquisition process, or your growth framework.

Growth Machine Process by Brian Balfour

Source: CoEvaluate

Business Examples

Location...location...location? - What's an upcoming neighborhood or an increasingly popular area in the city you live in? It's likely you've probably at least driven by a condo development that's primarily geared towards empty-nesters & those seeking to downsize or move.

As discussed in the Know Your Customers' "Jobs to Be Done" article, a real estate company in the Detroit-area, realized talking with potential customers was necessary to determine the 2 main reasons why people weren't buying (and it had nothing to do with pricing).

They even had the demographics nailed down with reaching those seeking to downsize & divorced single parents. However, that wasn't enough; sales for the units were still sluggish.

Only after speaking with potential customers do they find out how people's dining room tables were of great importance because of the memories, experiences, & feelings associated with them.

Initially, the newer units lacked space for most dining room tables. This in turn, created anxiety for potential buyers regarding what to do with their dining room table.

Because of these conversations, the architects were able to modify some of the floor plans to allow for a dining room table. Also, the real estate company provided additional services for buyers to help reduce their anxieties with moving. The result...a 25% increase in growth for the real estate company, even with raising the unit prices by $3,500.

Jobs-to-be-Done phrase

"The builders of tomorrow" - In an interview, George Revutsky recalled how Pley.com (the "Netflix for Legos"), after launching, had significant challenges with acquiring customers, despite spending thousands of $ per month on marketing campaigns. George & his team knew something was off.

They went out & interviewed various moms at the local YMCA, Jewish Community Center, & coffee shops. What was the main friction point stopping people from subscribing to Pley's service? (It wasn't the button colors on their site).

Parents were hesitant to sign up because they feared if one minuscule Lego piece was lost (which any parent can attest to, is inevitable), they feared they'd be responsible for the cost of the entire set of Legos.

Recognizing this was an important concern turning away visitors & business for Pley.com, George & his team adjusted the website copy to address if a piece were to be lost. Their conversion rate drastically improved by...98%.

Tip: Download & read Alan Klement's book, When Coffee and Kale Compete for free.

Embarrass Your Competitors 

Seek honesty & acknowledge embarrassment. Then, while others are reading 2,571 tactics to improve a landing page, your business can be improving your:

  • on-site copy & clarifying your unique value proposition
  • usability of your website & your products
  • off-site communications including your marketing campaigns
  • on-boarding process
  • retention

This certainly takes time, but in terms of required resources & difficulty relative to ROI, this can have a tremendous positive impact on your business. It's more embarrassing if you're not listening to your customers.

What's your process for creating customer personas & interviews?

P.S. In case you overlooked it, here's the link again for a few example customer interview questions.

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Thank you for your feedback!
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Brian Soell

Founder / Chief Marketing Officer of SiteUpturn

Brian is the founder & CMO of SiteUpturn. You can find him on LinkedIn.

Ready to take the next step. Let's talk.


Data vs. Analytics vs. Business

Data is data. It can be quantitative or it can be qualitative. It’s largely neutral (up to the point of how people use it).

Quantitative data is information that can be measured (quantified) or defined with a specific numerical value. It typically answers what actions are happening & what the results are from these actions.

E.g. Visits to our homemage for May = 10,500 visits (sessions).

Qualitative data is information that describes in terms of language, behavior, & perspective.  It’s subjective & gets at the why. “Why did you perform that action?” It often explains why someone is engaging in a behavior or taking action.

E.g. “I visited the homepage because I wanted to purchase a new pair of black dress shoes, that would look good with my suit, for a wedding. This is a very important occasion for my friends so I want to look my best. One of my friends recommended the website to me."  

Both types of data can be extremely important.

Let's be honest. Data can be fabricated, but then that's not really data that's just fabricated baloney or outright lies.

Analytics is finding relevant insights from data. Sometimes analytics is also just peeling back a layer & learning what one doesn’t know or what needs to be investigated further.

nsights from data and heuristics

 

"Analytics is about distributing knowledge, not data." - Gary Angel 

Context matters

We constantly need to be aware of the context such as:

  • Is data from an accurate source?
  • Is it reliable?
  • Is it relevant?
  • Is it precise?
  • How confident are we in this data?
  • What conditions are being applied? Or how are we defining it? What measurements are we using?
  • What does it tell us? What does it not tell us? What are the limitations?
  • Has it been manipulated?

Data can be manipulated or be deceptive based on intent & the conditions/criteria one applies to it. Think bad accounting practices such as Enron, which can = lying with fancy numbers. (Captain Obvious & our law firm advises us not to be like Enron. So don't be like Enron).

Data can also be corrupted if proper protocols are not followed or they're exploited. In turn, this can spillover & create additional issues for an organization.

The Data Wheel of Death by Coelevate.com

Source: Coelevate

Thus, the context for data matters...all of the time.

(Two of my favorite events about context that are bit less dry):

1.  When a world class musician goes from "...$1,000 a minute" to "...$32 and change" in this Washington Post experiment.

2. The Guardian captured how an iconic street artist needed 3 hours to make their first sale.

Google Analytics

Especially, when you're not at an enterprise level, it's unlikely we have a 100% confidence level in the data, 100% of the time. There are just too many variables, plus we're often relying on third-party tools for collection, storage, & analysis.

Thus, we seek what offers a high confidence level, is precise, & what can provide relevant insights. Google Analytics, (which has plenty of limitations), in terms of collection, storage, reliability, relevance, & context is the best out-of-the-box (when configured properly) analytics solution. It offers a high-confidence level, acknowledging we're very unlikely to reach a 100% confidence level or 100% accuracy all of the time, in such contexts.

In a lot of instances, Google Analytics offers the best/most imperfect information we have, when tasked with making imperfect decisions.

3 Limitations of Data/Business Realities 

While I think data & analytics can be enormously beneficial to most organizations, in the context of business, I believe there are at least 3 noteworthy limitations of data. Or if you’d prefer, there are 3 significant business realities that need to be acknowledged.

1. Human beings (including your customers) are irrational & can/do behave based on emotion.

If you're familiar with emotional intelligence, behavioral economics, & research such as the work by Dan Ariely, you understand the impact emotion can have on behavior.  Sometimes, logic & rationality do not matter. (I guess this provides some job security for #3, right)?

 

2. Innovative products & design strategy cannot always rely on data.

Going against the grain, taking big risks, ignoring some data, these sometimes can be necessary for innovation. Simply put, in some instances you & your team might have to make it happen with little to no data. (Is this extremely risky? Yes, indeed. Do products & businesses fail from this approach? Absolutely)!

I’m reminded of how Henry Ford explained this.

"If I had asked people what they wanted, they would have said faster horses."

The reality is, it's not always about faster horses. Henry Ford understood there was a need for faster & more convenient transportation beyond what was available at the time. (One could also reason there are needs for speed, exploration, freedom, & escape).

Innovators, at times, know better than others. Sometimes, this means ignoring the data & all the "Ultimate Guide/Best Practices" guru chatter out there. Instead, it's about execution of the vision when bringing a new product to market (which certainly is not the only approach to follow for every business).

 

3. Leadership will need to outweigh data at times.

As CEO, I'm certain you have numerous challenging decisions to make. To compound matters, you've likely had to make decisions with very limited information, poor intelligence, or even with nothing at all, while facing numerous challenges. Yet, despite all of these factors & adversity, you've still had to take imperfect action. Typically, it will be the best course of action when all options are terrible. (Yeah, it sucks & it's painful).

Hopefully, you're able to fill in the picture as much as possible, but there’s always some aspect that’s unaccounted for + you can be certain there's always something needing an answer from you...at the worst time (hello Murphy's Law).

These are at least 3 of the realities/challenges with running a business.  We both know these aren't going away anytime soon.

Keep pushing forward.

What’s the most challenging decision you’ve had to make as CEO or business owner? (You can change their names). Let me know.

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Brian Soell

Founder / Chief Marketing Officer of SiteUpturn

Brian is the founder & CMO of SiteUpturn. You can find him on LinkedIn.

Ready to take the next step. Let's talk.


E-Commerce Benchmarks, Targets, & Key Performance Indicators (KPIs)

Be Aware of Benchmarks

Before getting into E-commerce benchmarks, there are three significant caveats that need to be mentioned.

1. Averages can betray you (+ most benchmarks contain averages). They’re likely distorting at least some of your data.

For instance, think of how outliers can distort averages.  If for Group A there were 100 customers & each spent $25 per purchase, the average order value (AOV) = $25. Compare that to Group B, were there’s also 100 customers, but 95 customers spent $10 per purchase & 5 customers spent $310 per purchase; the AOV would be the same for this group of 100.

However, there are likely some distinct differences in the behavior and varying considerations, to account for between Group A & Group B. Even in this basic example, you can see how important segmentation is for your businesses, particularly when addressing outliers.


Takeaway #1: 
How are you segmenting your data? Which outliers might be distorting your data?

2. It’s imperative to benchmark your own data & have a reliable way to measure good/poor performance that’s most relevant to your business. We all know that just because Company Y has this benchmark doesn’t necessarily mean you need the exact same ones or your own benchmarks are automatically better or worse.

Keep your competition in your mirrors, but don’t allow them to drive the vehicle. It's up to you to determine the value of comparisons with a top competitor or industry leader.

If you're in E-commerce, it's clear Amazon is a competitor. It's much murkier in regards to benchmarking against a company that spends > $15B on R&D & has roughly 37%-43% market share of all online retail sales in the U.S. Again, at best we’re often seeing averages when examining what others disclose. At worst, we might be seeing deceptive and unethical business practices (Can you imagine a business that benchmarked off a company such as Enron? Yikes)!

Takeaway #2: How are you internally benchmarking & measuring your own success? Is it valuable for your business to benchmark against a top competitor or industry leader?

3. Regarding data, we constantly need to be aware of context. Context matters, including, but not limited to: one’s confidence level in the data, if it’s from a reliable source, the collection methods used, awareness of biases & fallacies, etc.

Takeaway #3: What’s your biggest bias in your business?

Cognitive Bias Codex - 180+ biases designed by John Manoogian IIISource: Design Hacks

Why Benchmarks?

Averages can help provide some context and sometimes, depending on the source, provide a slightly better foothold for decision making compared with other alternatives. (At the very least, I hope the below benchmark figures illustrate the importance of goals, KPIs, targets, segmentation, correlations, & understanding your customers better).

Businesses can certainly choose to ignore the competition, but that’s extremely risky.  Be selective with what your business is ignoring about your competition & how your business values comparison. (If it’s confusing for you as CEO or founder, think of how murky & challenging it is for the rest of your team).

  • Completely ignoring competition can be problematic.
  • Viewing comparison as an end all & be all solution is a recipe for disaster.

Takeaway #4: Be selective with what your business is ignoring & paying attention to regarding your competition & how your business values comparison.

E-commerce Benchmarks in 2017

Multiple Devices

6 Devices

- Used frequently in the U.S. by consumers

Source:  Adobe

 

2.6 Devices

- Used Before a Purchase

Source: Google

 

Browsers

Chrome – 2 Billion installs

Safari* – 1 Billion active Apple devices users

Internet Explorer/Edge – 466 Million users

 

Sources: Expanded Ramblings & Expanded Ramblings

*Of course this doesn’t mean all active users are all using Safari as their browser

Load Time

7 seconds

– Avg. load time for a mobile U.S. retail E-commerce site

Source: Google

Bounce Rate

34.89% of New Visitors vs. 24.46% of Returning Visitors bounced*

Source: Monetate     *in Q4 2015

 

53% of Users will bounce if load time > 3 seconds

Source: Google (based on 1 Billion mobile user sessions)

Add-to-Cart Rate

7.61% of New Visitors vs. 14.80% of Returning Visitors added an item*

Source: Monetate     *in Q4 2015

Shopping Cart Abandonment Rate

69.23% of shopping carts are abandoned based on 37 different studies

Source: Baymard Institute 

Conversion Rate

2 – 3% Desktop conversion rate for retail in the U.S.

Source: Google

 

1.9% Mobile conversion rate for retail in the U.S. at the “high-end”

Source: Google

 

2.44% – 3% overall conversion rate in the U.S. in 2016

Source: Monetate

 

3.51% – 4.31% Desktop conversion rate in the U.S. in 2016

1.11% – 1.5% Smartphone conversion rate in the U.S. in 2016

2.79% – 3.55% Tablet conversion rate in the U.S. in 2016

Source: Monetate

Email Benchmarks in 2017

Opt-In Rate

1.95% – 4.77%

Source: Sumo.com

Open Rate

16.75% for E-commerce (Updated: 2/1/2017)

20.62% (11-25 employees*)22.83% (50+ employees*)

Source: MailChimp

*businesses surveyed with this range of employees

Click Rate

2.32% for E-commerce (Updated: 2/1/2017)

2.43% (11-25 employees*) – 2.84% (1-10 employees*)

Source: MailChimp

*businesses surveyed with this range of employees

Unsubscribe Rate

.23% for E-commerce (Updated: 2/1/2017)

.17% (26-50 employees*).30% (1-10 employees*)

Source: MailChimp

*businesses surveyed with this range of employees

These are just a few examples where you can take some important benchmark figures & utilize them to help with:

  • understanding your visitors & customers better
  • segmentation
  • identifying your goals, KPIs, & targets
  • determining correlations (such as bounce rate being correlated with load time)

Takeaway #5: Which KPIs or metrics are most important for your business? How’s your business tracking & measuring them? 

99 Problems & a Metric was One

First, don’t lose sight of how KPIs or metrics fit within your business objectives, your primary goals/macro goals, & your secondary/micro goals for the next year – 24 months.

I’ve seen countless businesses chase vanity metrics & targets (bad quotas can be a close second) that ultimately are not tied to any relevant business objective or any important macro/micro goals.

Stop chasing these vanity metrics by asking some of these types of questions.

"Does this...

  • ...assist with increasing revenue or your big macro goal?"
  • ...help reduce your costs?"
  • ...assist with improving efficiency or reducing waste?"
  • ...help reduce your risks?"

or...

  • ...help you better understand your customers?"
  • ...allow you to better reach the right customers?"
  • ...build rapport & trust with visitors, leads, & customers?"
  • ...provide value to visitors, leads, & customers?"
  • ...help with retention?"

One can easily be overwhelmed with which KPIs or metrics to track. There are countless to choose from, but for the sake of focus, execution, & your sanity, I recommend prioritizing a few, such as 4-10 metrics.

Essential KPIs/Metrics for E-Commerce

KPIs for E-commerce: Key Internal Benchmarks

The more you improve segmentation of your data, the greater the confidence level in these KPIs. The less segmented your data is, the lower the confidence level should be. (And, yes, in reality we'll never reach 100% confidence level).

Products

1. Revenue – We all know how important revenue is, from total revenue to the revenue from each product or service.

2. Profit Margins – From operations to supply chain considerations to evaluating ROI of marketing campaigns, it’s imperative to know what your margins are for each product. One cannot improve profitability without paying significant attention to margins.

3. Average Order Value (AOV) – What’s the average value/$ amount for a customer’s order? There will likely be outliers here especially with upsells & cross-sells, but AOV can help with evaluating the effectiveness of such efforts. In addition, AOV will help account for quantity purchased.

Reach & Acquisition 

4. Click-through Rate (CTR) –  We all know, if users are not engaging with an ad or marketing campaign, that’s a major issue. Likewise, we also know that CTR can impact acquisition spending/costs, delivery, & the position of ads.

5. Cost per Action/Customer Acquisition Costs (CPA/CAC) – If you’re not segmenting acquisition channels/sources, not utilizing attribution properly such as multi-channel funnels & UTMs, not understanding the paths to purchase, and/or ignoring basic segmentation such as browser, device, location, etc. this figure can be highly inaccurate.

6. Return on Ad Spend/Return on Marketing Investment (ROAS/ROMI) – From helping evaluate performance of various advertising & marketing campaigns to better allocation of resources, it's crucial to understand ROAS. While more advanced, it's typically more beneficial to understand ROMI.

Interactions & Engagement 

7. Bounce Rate – Bounce rate in Google Analytics is often misunderstood, as much as a musician who creates an alter ego, because it doesn’t reflect the time spent on the page or always the context of the page. For example, a written article might have a higher bounce rate, but if readers are reading through the article (but, not clicking anywhere) & receiving value, the bounce rate could be very deceiving. Understanding what the goals are & what sort of interactions/events are intended, for each important page, can help clarify your bounce rate. In some instances, it might be worth adjusting the bounce rate to better reflect the content & context of your website.

8. Email Opt-in Rate –  While there are certainly exceptions, email is extremely valuable for most online retailers. It also makes sense to pay attention to open rates, click rates, unsubscribe rates, & overall performance of email marketing campaigns (which requires properly using UTMs).

Outcomes 

9. Conversion Rate – Specifically, the overall macro conversion rate for your website. This is often the main macro goal for most E-commerce stores.

10. Checkout Abandonment Rate – All E-commerce stores experience abandoned checkouts (and abandoned shopping carts). Similar to shopping cart abandonment rate, there’s likely additional revenue to be found with your abandoned checkouts. Optimization efforts should address how this rate can be reduced.

11. Shopping Cart Abandonment Rate – All E-commerce stores experience abandoned shopping carts (and abandoned checkouts). There’s likely some additional revenue to be found with your shopping cart. Optimization efforts should dig into how this rate can be reduced.

Customers

12. NPS –  Net Promoter Score (NPS) is one of the most valuable ways to help measure retention & help assess the overall health of the business. Implementing & tracking NPS is a no-brainer in 2017, given the numerous options available, including creating your own with survey software.

Lifetime Value (LTV)

This is one of the more challenging KPIs to determine, especially if you’re a newer business and/or have very little data. If this is challenging to determine, I recommend:

  • investing in NPS & tracking this
  • reviewing cohorts over a fixed period of time (ideally, if you’re able to track them for at least 1 year or longer, there’s likely a higher confidence level)
  • evaluating the time (recency) between visits/purchases & the rate (frequency) of visits/purchases over a specified time period
  • considering the peak buying season, events, dates, etc., what’s the purchasing behavior (customer lifecycle) like? + AOV
  • thinking about the product lifecycle (when would the product need to be replaced or replenished?) + AOV
  • have you been a customer of your competitor? If so, when & why did you purchase?
  • assessing your product launch calendar, what’s the frequency & timing with introducing new products? What’s the forecast regarding pricing, the product’s lifecycle, & customers’ buying behavior?

The longer one is in business & the more reliable data that’s available, the more precision there should be with determining LTV. (Admittedly, some of the items mentioned above will pertain most to businesses < 1 year old & they certainly, have a lower confidence level). Although, given LTV’s relationship with retention & growth, it cannot be ignored.

Inflection Metrics

It's not surprising that top companies like Facebook, Netflix, & Slack really dig into their data. They have a process for assessing how their metrics relate to users' behaviors & how such behavior can correlate with business goals such as traction, growth, & retention.

For example, Facebook found "adding seven friends in the first ten days" after joining, "was the strongest signal of long-term retention. Slack discovered when teams exchanged 2,000 messages, there was a noticeable correlation with retaining users. Lastly, the BBC shows the turning point for viewers binge watching various Netflix series.

Netflix series inflection metrics from the BBC

Source: The BBC

I realize these are SaaS companies, but that's the power of finding insights from one's data in order to provide better experiences for customers, better identify how to retain them, and assist with long-term growth for a business.

The Fundamentals

It’s imperative to tie KPIs with your business goals & objectives. Again, this is also why listening to your customers can unlock some key insights.

“…metrics can only tell you what users did. They can’t tell you why.” – Ash Maurya

Even the best metrics do not tell you why. Which is why…you need to keep listening to your customers.

Perhaps, visitors & customers don’t trust your website enough (conversions, abandoned checkouts, event completion rate, & bounce rate) or they’re confused about how to use the product (returns, support tickets, or negative comments) or the communication from customer service is impacting future purchases (retention, open support tickets, unreturned phone calls, & email unsubscribe rate).

Each of these could be matched with a KPI & a target to help improve and grow your business.

Review how basic points such as these can help clarify KPIs & targets for your business and how they overlap with customers’ needs.

Focusing on the Fundamentals points by Marc LoreSource: The Nielsen Company

Takeaway #6: Which fundamentals are most important for your business?

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Brian Soell

Founder / Chief Marketing Officer of SiteUpturn

Brian is the founder & CMO of SiteUpturn. You can find him on LinkedIn.

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