Selling online has become harder lately and, if you’re a marketer, you know lots of reasons why. From cookies going away to privacy-related updates to organic reach dwindling on major social platforms, it’s harder to generate sales.
To address this problem, we’ve listed several metrics you should watch and some related tactics to improve them. This way you can have a strong foundation that will help you grow in 2024.
Let’s jump straight into them:
Supplier payment terms
The percentage of your orders that you pay upfront.
Whereas this metric is often overlooked, cash is king in the e-commerce game, so you better optimize it.
There’s a cash generation cycle where you pay for inventory (and other things) and when you actually receive payment for goods sold. This can be 30-60 days in some cases. So you’ll need to keep tabs on it.
Tactics:
- Gain a stronger negotiation position by bidding on other suppliers so you’re aware of their costs, payment terms, and production times.
- Long supplier payment terms are just a loan, and you can find cheaper money elsewhere like inventory-based lending from a bank.
Percentage of operational expenses on revenue
These are fixed costs that increase with major milestones, they’re not linear. For instance, one day you may need to hire, and so your operational expenses go up by 25%.
Tactics:
- Use four-quarter accounting.
- Get clear about your people’s cost: Calculate the cost of finding and hiring employees, and maximize the value of each employee by assigning the right tasks.
Organic vs paid traffic mix
If you depend on one channel today, you’re putting yourself in a dangerous situation in case that channel is hurt down the line.
The more you depend on organic traffic the better.
Email, SMS, direct, and branded paid search are all stable.
Tactics:
- Aggressively capture email addresses from all of the traffic you generate. Whether it’s popups, quizzes, style guides, or contests, just do something. Don’t only focus on the sale, try to get emails as well, focusing on delivering value in exchange for the email.
- Have a monthly revenue goal for organic channels. For instance, calculate your monthly revenue per subscriber and hold yourself accountable. Knowing your numbers is key.
60-Day customer lifetime value
Acquisition is essential. But retention is what keeps you alive.
Tactics:
- Optimize your paid channel strategy from products with the highest LTV.
- Research what other products your customers need and diversify.
- Transactional email open-rates are on average 80%. Use them for cross-selling and up-selling.
