Monday, July 8, 2013

E-commerce & Avg. Transaction Value in Google Analytics

When analyzing transaction data in Google Analytics, do you ever come to the conclusion you simply are not getting enough transactions. There are many individuals that ignore the average transaction value. However, this is simply due to not knowing of methods in how to apply it to business.


Why is the Avg. Transaction Value important?


This is your base-line or median to determine how much trust and effectiveness in how your products are presented to the user. Let's say your avg. transaction value is $450 and you are obtain no more than 5 transactions a day, yet have over 5,000 products and 2,000 web visitors. Reasoning would suggest you should be making more transactions. Let's dig a little deeper to see how we can fix the problem.

  • You need to assess how many products you have on your website.
  • Next, determine how many of those products are priced
  • Determine how many of those products are competitively priced. If there are rules in the products you are selling at a minimum manufacturer price, you would want to include these as “not very competitive”.


Now that you have collected and are monitoring this data, you can move forward for reporting. You should be monitoring the following:

  • % of priced products and quantity on the website from your entire web catalog
  • % of competitively priced products and quantity on the website from your entire web catalog
  • The number of transactions above and below your avg. transaction price.
  • The rolling revenue off the first transaction of the customer (you can even apply the avg. transaction value and create a deeper segment).


Treat priced and competitively priced products as different segments when comparing the number of transactions. You first need to understand the frequency of your transactions based on your entire exposure online. Once you determine a pattern in transactions, you can adjust your strategy to focus on improving the remainder of products not priced or priced competitively. In addition, you may need to focus on adding more products in your market under your average transaction value.

By doing this, you increase transactions which leads for more repetitive growth for larger transactions. You may enter the site by purchasing a wallet one day and 2 months later, you come back and purchase a HD TV.

The key is tracking these metrics to assign a plan in improving your weak points in E-commerce. By aiming to improve these metrics, revenues and web traffic will increase.


Finally words of wisdom: Google SEO comes in to play by throttling web traffic. Therefore, if you continually pump products in where a conversion is not likely to happen, you thin-out your internal PR juice run-of-site. This may lead to less traffic to more important products if they are not positioned right on your website. If the majority of those products are not priced, interaction will be less likely to occur through conversion.

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