The Most Important Metrics for Growing Shopify Stores in 2021
If you don’t know your numbers, you don’t know your business.
Any savvy business owner knows this is true, and it’s especially applicable these days to the growing population of Shopify store owners. Shopify is usually the first eCommerce platform that merchants use to sell their products. Knowing which numbers move the levers of growth for a digital store is complicated, which is why merchants turn to Daasity to give them immediate insights and dashboards into their most valuable metrics.
We sat down with Jeremy Horowitz of Daasity to shine some light on the numbers that store owners need to know. You can watch the full fireside chat here.
Here are some of the highlights we took away from this chat. If you’re a Shopify store owner, be sure to check for these blind spots.
One of the biggest shortcomings that can affect multiple aspects of a merchant’s business is lack of consistency. Lack of consistency as it relates to contribution margin analysis can be absolutely detrimental. Contribution margin is essentially your top line sales minus your discounts, refunds, returns, product costs and associated marketing costs.
Once you’ve sold your product, it’s imperative to figure out how much that sale actually contributed to your ability to do things like pay salaries, facilitate office space and invest in expansion. Understanding how you are performing on a per unit basis offers the clarity you need to drive the business forward.
Once you’ve established your contribution margin, make sure to consistently evaluate both marketing and growth around this metric.
Don’t overcomplicate things. If you’re just getting started, tracking everything right out of the gate is a great start to setting yourself up to succeed, but remember to keep analysis simple. At first, your goals will be centered around driving purchases. Once you have some momentum, you’ll want to start focusing on doing that as effectively and profitably as possible.
Throughout your store’s journey, unique aspects of your business will emerge and those aspects will be important to track. As you build on these, your idea of what success looks like may evolve, but make sure to stick to the basics first.
Jeremy compares performance marketing to the stock market, with respect to making calculated bets. “At a certain point, this will become a game of speed,” he says. He explains that those with the quickest access to the most comprehensive information are able to make informed, proactive decisions, and that is where the greatest gains come from.
Powerful reporting and analytics make all the difference. Consistent, relevant reporting capabilities allow you to be as proactive as possible. Having a daily checkup on the metrics that matter most keeps you informed, letting you quickly make key decisions towards your strategic goals.
Pay close attention to your data as it relates to customer lifetime value (CLTV). This arms you with the information you need to make impactful marketing decisions. With accessible analytics, you can start thinking intelligently about how to segment all of your key channels around your CLTV.
Stay close to your product reporting data. The most meaningful optimizations happen after you understand where your customers are coming from, what they are buying and what’s keeping them coming back. This information can be tied back to the CLTV so you know how to merchandise products accordingly.
Putting yourself in a position to be proactive is non-negotiable in the competitive Direct-to-Consumer (D2C) space. Make sure you never lose sight of your contribution margin and your CLTV data. Seek out the resources you need, like Daasity and Everflow, so that you’re able to make educated decisions that are going to drive your business forward. With the right tools and data, you can control your own destiny. That is, if you’re utilizing your data effectively.