The 21st-century online entrepreneur is a very busy entrepreneur. Far from the imagery pushed by contemporary media, you’ve probably discovered that business is a constant cycle of analyzing key metrics/trends and developing strategies to stand out in the overly competitive business-sphere of today.
It’s tough, and when you add the business of churning through customer and sales data (that helps you to spot trends and develop strategies), it can become hectic. So hectic that there’s the propensity for you to lose sight of vital areas of the online entrepreneurship game.
How then do you handle website metrics for digital goods without sidelining other critical components of your online business? It starts with knowing which metrics actually matter.
But before we delve into what these metrics are, here are some stats mastery tools you should already have.
Website analytics must have
When it comes to website stats, Google analytics is probably the world’s most popular tool. This Swiss Army knife tracks virtually every core metric of your online business rather efficiently. Add that to its free nature, and it’s easy to see why virtually every digital product seller is a fan.
However, if you’re looking for a more tailored insight on your website metrics, then Statly is just what you need.
Like Google Analytics, Statly tracks your web visitors but with extra perks. While GA provides for only rudimentary information, Statly takes it a step further to provide real-time analysis through your sales funnels and website, so you’re better positioned to improve conversion and optimizing sales of digital products. Try Statly free for 30 days!
Now that that’s aside, what website metrics should you be looking at?
Number of users, sessions created and page views
Users are individuals who visit your website within a particular time frame.
A session occurs when a user visits your site and the goes on to spend time on the site browsing through your web content.
Think of page views as fragments of sessions. They occur when a user checks on to a particular page of your website during a session.
Together these three are essential in deriving an overall picture of the performance of your website as a whole and tracking the effects of an upgrade, update or modification effected from your end.
Time spent per session and your bounce rate
Ideally, you want visitors to spend as much time as is possible on your website – it’s a surefire indicator that they are deriving value from what you’re offering and most times, it leads to conversion.
When users check out a page and immediately end their session, then that’s an indication that there might be something wrong with such a page.
The rate at which they do this is the bounce rate. A high bounce rate is indicative of an underlying problem you should sort out.
It’s one thing for users to land on your web page and engage in a session. But what do they do subsequently? Depending on the structure of your website user actions can vary greatly.
However, one core action you should be tracking is your conversions.
A conversion happens when a user does what you designed a webpage to make him/her do. It could be making a purchase, signing up for a newsletter, or even simply engaging with the page content.
Regardless, as you might have already guessed, this metric is the primary indicator of the success of the overall marketing of your digital products. If you’re not converting, you’re not achieving your goals. The rate at which you meet your sales goals is your conversion rate.
Number of sales of digital products
Like your conversion and conversion rate, your number of sales is an important metric for evaluating the success of your digital product business.
While conversion requires calculations, your number of sales is easily derivable from your e-commerce dashboard or via a WordPress plugin.
Gross revenue/earnings from digital products
The total of all the money you earn as payment or commission for the digital products that you sell is your gross revenue. It’s dependent on your number of sales and the basis of the equation for deriving your profit margin and your net profit.
Gross and net profit
Gross revenue is at the top of your profit and loss statement. Then, when you subtract the cost of goods, you arrive at the gross profit. If you want to calculate the final net profit number you need to deduct all other business expenditure and operating costs, like staff and marketing costs and taxes.
If you are running a digital product business, you are most likely to have buyers who request a refund soon after they receive the digital download. Digital goods are easy to refund because there is no physical product, i.e. no product to ship and no shipping costs. In most cases, digital good sellers offer a 30-day money-back guarantee, which practically means that some buyers will be able to consume the product and ask for a refund in time.
This is why the number and value of refunds is another important component of the revenue-profit equation you should track. No one likes tracking this, but it’s business, and you’ll be needing it if you want to map out a strategy of how to reduce refund requests.
Recap – Key metrics for digital goods
Overall, these last three metrics comprise the revenue side of website stats. Their importance cannot be emphasized as they ultimately determine the bottom line and survivability of your business.
Paired with the rest of the bunch, these metrics give you an insight into just how your business is performing and what steps are needed to further bolster your competitive advantage.
As you probably know, the successful entrepreneur is the one who takes informed decisions as opposed to arbitrary resolutions. These metrics for digital products give you the insight needed to effect tailored strategies that guarantee the success of your business.