Monitoring Orders To Increase Profits? Here’s How!
If you’re looking for ways to increase your profits, there are some standard techniques you can use right off the bat like adding new marketing activities, diversifying sales channels, investing in PPC campaigns, and making special offers to your customers. But there is also a less than obvious ‘gold mine’ tied up in ROI optimization: namely, your orders data. The question is, can you make it work for you?
Let’s focus on your orders. Having the ability to read your data is crucial here. To help you with that, we’ll refer to the MonkeyData analytics application, and walk you through the orders dashboard step-by-step. Here are some of the metrics to keep in mind when looking to raise your sales and keep your customers satisfied.
Number of Orders And AOV
Store owners and managers routinely monitor the number of orders to evaluate their store’s overall performance, which is dependent on a number of variables including marketing campaigns and recurring factors such as the season, weather, and holidays. For many merchants, this is where looking at data from orders ends, which is unfortunate if we consider the potential of such information. Let’s start with Average Order Value.
AOV is calculated by dividing the total revenue by the number of orders. By checking this metric you can determine how much a customer spends in your online store on average, and whether they buy more expensive / multiple items per basket. If these numbers are low you can try reducing your order execution cost, offering volume discounts, starting to cross-sell and up-sell, and even try offering free shipping for a higher order value. We already covered this topic thoroughly in this article, so let’s dive a bit further into other orders related metrics.
Orders By Days And Hours
This metric teaches you about your customers’ shopping habits. According to Windsor Circle, all revenue skews toward the beginning of the week, with Mondays and Tuesdays performing best, followed by Wednesdays through Friday, and Saturday and Sunday taking up the rear. According to intelliAd, the largest share of traffic (61%) and conversions (77%) is still observed on desktop computers during prime TV time, from 8pm to 11pm. But keep in mind this information is generalized, and can vary greatly from business to business depending on factors such as category of products, demographics, etc.
If you take anything away from this revelation, it’s that tracking your own orders by days and hours is a good step toward understanding where those dips and peaks occur. It can alert you to when you need to prepare your stock and have your staff and customer service ready so that you don’t end up keeping your customers waiting. It’s also great for planning your marketing activities precisely.
Order Processing Time
This metric refers to the time between the day an order is placed and when it’s shipped, and is strongly related to the customer experience you provide. By monitoring your order processing time, you can determine when to prepare your stock, have your staff ready, and delegate more energy to speeding up the dispatching of your orders. There are many competitors out there thirsty for your customers, so holding onto them is a top priority. And since customers don’t like to wait, another good tip is to look for creatives ways to cut your order processing time down to a minimum. Otherwise you might wake up one morning and have nothing to process!
In order to throttle your order processing time, there are many factors involved that should be monitored. First and foremost, keep track of your inventory levels — having enough stock to account for spikes in demand, as well as being prepared for important eCommerce dates, will ensure you don’t fall behind. Packaging is also very important, and we strongly recommend using a warehouse management system to assist in automating the majority of distribution activities, from the customer deciding on an item to the final delivery of that product. Track all errors customers make in product selection and make changes to your process accordingly. Though things like the season, weather and holidays may be out of your control, don’t forget to monitor these as well. It is good to be prepared to act in case of any unforeseen circumstances.
Orders Statuses
Every business has its own system of order statuses. Let’s go through some example statuses of orders: pending, completed, shipped, cancelled, declined, refunded, disputed, awaiting payment, awaiting shipping, etc. Regardless of what style of ordering a store uses, most come up against a common duality: whether the order was processed and shipped or not, and is one of the most fundamental indicators of how well a business is doing.
The ratio of cancelled orders to the shipped ones will tell you valuable information mainly about your website and also about your delivery. There are other influencing factors on the customer’s behalf, some of which are unpredictable such as “changing their mind for no reason”, but let’s stay focused on the seller’s perspective: cancelling the order may be caused by a lack of clarity or inconvenience of your shipping and/or payment conditions. The key to success here lies in the whole sales funnel — the purchase process should be seamless, the add-to-cart easy to find and streamlined, and finishing a purchase must be intuitive with clear info and big buttons.
Reasons for Order Cancellation
Orders statuses brings us to another metric — reasons for order cancellation. As we described above, keeping track of your cancellations helps you streamline your store’s processes and alerts you to any changes that need to be made such as diversifying payment and shipping methods, improving administration, reducing pricing, and selling best products alongside the cancelled ones.
What may also happen is that your customers cancel their orders on the grounds of delayed delivery. To avoid the bad reputation you would gain from a few delayed deliveries, pay attention to picking the right delivery provider. And remember to always keep customers informed. Many orders are cancelled because of the lack of information buyers are given while products are in transit.
And it’s not just cancellations that causes drops in your revenue. When it comes to eCommerce, one of the biggest reasons for losing a sale is due to shoppers leaving your store without completing their purchases. Find out why shoppers abandon their carts.
We can’t understate the importance of paying close attention to your orders and implementing a data-driven approach. If you have the right data, the ability to identify patterns is well within reach. With the MonkeyData application you can easily monitor your orders as well as cancellations, how fast you process your orders on average, your peak hours and rush days, AOV, and many other cool metrics which can help you increase your profits!
