Take one step forward from your usual sale analysis, and you can find better ways to increase sales.


E-Commerce increasing sales management of e-commerce measurement of effectiveness Sales analysis

Sales analysis, it is the very basic of managing e-commerce websites.
I often hear people say "We check the management screen of our website everyday".
However, there are not so many people who actually examine real factors which bring profits to their e-commerce websites.

For example, here is an e-commerce website managed for several years. As time goes by, it is easy for a manager of the website to get used to the reasonable profits the website brings and not really think about what is the real cause of sales. And he may only make these kinds of analysis on sales factors...

"Product A has an excellent quality."
"Product B has always been the most popular one."
"Product C has shown results."

This can be said to anyone; and if you only make vague sales analysis, you might end up with another bland attempt, such as starting a new advertising as usual.

In this case, there is a danger of missing new business opportunities. It is not until the sales start to decline that you might notice that you are actually in a serious problem out of the blue.
On the other hand, if you carefully examine numbers, you can use good sales records for a reference at the time of recession, or perhaps you can still keep know-how even if a personnel in charge leaves the company.

By pursuing the ultimate factors of daily sales, you will definitely be able to find tactics to increase sales. Even if the result was not excellent, there will be another chance to start a new approach.

So this time, I'm going to write about how to make a  precise analysis on causes of sales.

Pursuing the further cause from the primary cause

Perhaps you may know, but sales are broken down into several elements.
[Sales = Visitor × Rate of purchase × Order unit price]

This formula is still not good enough, I think, but this is the basic of sales analysis.

When sales go up and down, there's always influence of increase or decrease of some of these factors: number of visitors, rate of purchase and order unit price. In any case, pursuing the further cause from the primary cause comes to very important.

For example, your e-commerce website had good sales on the day before, and you found it's because the number of visitors was increased more than 20% compared to the average. Now then, you need to figure out why there was 20% increase on the number of visitors.

- Which type had more visitors, pull-type or push-type?
-Did any of advertisement have more visitors?
-Was it because of the e-newsletters?
-Did the number of visitors from the search engine of organic keywords increase?
-Did the number of visitors from the alliance website increase?
-Was it because of distribution on TV or magazines?

Once you find out which number has increased, then you need to find out more about it.

And now you see these factors.

-The number of visitors from the ad banner A has increased.
-The number of visitors from the e-newsletter about Product-B has increased.
-The number of visitors searching " keyword-C " from search engine has increased.
-The number of visitors who watched TV show-D has increased.

Once you examined the numbers thoroughly, then it's time to think about the reasons.

- Why the ad banner A attracted more visitors?
-Why the e-newsletter about Product-B brought more visitors?
-Why more people visited by searching "Keyword-C"?
-Is it because the tag line was matched to the target customers?
-Is it because the tag line contained the previous results?
-Is it because the product needs was matched to the seasonal occasion?

If you also had more products sold, then you can think about these factors too.

-Why the products advertised by the banner ad sold well?
- Why the products that had specific keyword sold well?
-What kind of people purchased the products?
-Why the reader of the e-newsletter purchased the products?
- Was it new customers or repeaters who purchased the products?
-Were there any similar customers who purchased the products?
-Were there any products purchased together?

Thinking about "What happened" and "why" repeatedly, you can know what you were not aware of. If you have clear knowledge about "the cause", you can make it your know-how.

Now, let's think about ways to increase sales using your know-how.

By the way, let me get off track a little.
In order to clarify the tactic to achieve the sales target, you can apply the way to break down the sales on the way to set the sale target.
Most companies set their sales target every year. At this time, the sales target of each e-commerce website is also set as well.

However, even if your boss says ”Our sale target is 10 million dollars! Let's achieve the goal together!", what you can do is only to check the sales from the day before each day and calculate the rest of amount of sales you need to achieve.

So you can calculate the number of the visitors in the following formula if you know the standard of order unit price and the purchase rate.

[Number of aim visitors = Number of purchase ÷ Purchase rate.]

If you can clarify the number of the aim visitors, you can make it into the following formula.

[The number of the aim visitors = the number of expected visitors in a month + the amount of shortage on visitors]

By using this formula, you can actually calculate the exact amount of shortage on visitors, and demonstrate the budget in case of making up the shortage by advertising. However, in the end, what you need to make up for is the sales. Therefore, you can think in these ways.

-Making up for the shortage of visitors by advertising.
-Improving the number of orders by delivering e-newsletters.
-Producing new products which can expect good sales.
-Carrying out a measure to gain bulk purchase and improve order unit price.
- Find the way to have each repeater purchase one more item.
- In order to offer proper items at proper timing, find the occasion that new customers return to the website for shopping.

Let's get back on track.

Analyzing sales from various angles.
If you think pursuing the cause of causes as a vertical axis, what I'm going to write about is the horizontal axis: to open up your view on pursuing causes.

Previously, we broke down sales into this formula,

[Sales = Number of visitors × Rate of purchase × Order unit price.]

Apart from this, you can also find trends by analyzing the orders from customers.

In order to find the trends, it is necessary to analyze data from various angles.

Sales = Sales from new customers + Sales from existing customers
Sales = Sales by product categoriesCategory-A sales, Category-B sales and Category-C sales
Sales = Pull-type sales + Push-type sales
Sales = Sales from members + Sales from non-members
Sales = Unit price of one point order × Number of products purchased

It is better to research thoroughly, since you never know where you find opportunities, but this takes enormous amount of time. You probably don't have enough time to do so, therefore, you should look for the key of sales at such time.

For instance, if there is small number of visitors, repeated purchase rate per customers, frequency of repeated purchase, and timing of purchase might come to be the key. If there are frequent bulk purchases then the key would be the number of items per each purchase.

Furthermore, it is also good to know what kind of person purchased what type of product and the reason she/he chose it. I think analyzing a customer's action and psychology will bring you the new method and empirical knowledge.
If you thoroughly pursue the further cause from the primary cause, you can discover a method to increase sales.