When using eCommerce solutions and websites, one of the most important things to do is to step back and take a look at the amount of success that you are having. This can help you to see what you are doing correctly and what you need to change. Growth is always good, of course, but you want to see why that growth occurred. You want to have a good idea of what it means for your company. You also need to be able to determine when you are having real success that is going to last and when it is just a fluke.
One-Hit Viral Wonders
For instance, in modern culture, the Internet makes it so that things can become wildly popular for just a short time. Just look at any pop song or video that goes viral and you will see how this works.
It seems to come out of nowhere, be all the rage for a few weeks, and then disappear again. Your products can do this as well. If you have a huge spike in sales, do not just assume that this new level is going to hold forever. You do not want to see one month of great success and start expanding to meet with demand, only to watch that demand dry up two months later so that you have to downsize all over again.
Importance of Key Performance Indicators
What you want to look for is the baseline success, outside of the spikes. How much can you count on selling, even in the bad months? This gives you a better indicator of what you are looking at for the future. Spikes are fine, and you should be excited to get them. You can make a lot of money in a hurry. However, you should not make the mistake of thinking that they are establishing a new baseline for your business.
Another thing to consider is sales that go to repeat customers. How many people are just buying something once because it is a novelty item and how many people really like your brand? These are the people who are going to come back and buy things over and over again. They are going to give you sales that you can depend on. Repeat sales give you an indication that they will also buy the next product that you put out, but one-time sales do not give you that same indication for the future.
Do you know what are your baseline for success and your number (or percentage) of repeat customers?