What every merchant should be focusing on

There’s an old saying from an American biologist called Leroy Edward Hood that every ecommerce merchant would be wise to take notice of…

“If you just focus on the smallest details, you never get the big picture right.”

Now, that might not sound like anything special. But I’ve noticed that a lot of merchants seem to be obsessed with micro conversions, rather than macro conversions.

Some examples of micro conversions are:

  • Downloading Files
  • Joining a Mailing List
  • Product page views
  • Watching a video review
  • Add to a wishlist
  • Account creation
  • Impressions
  • Clicks
  • Click cost

Obviously, some of these are more important than others. And I’m not saying you should ignore any of them.

But the point is, you have to prioritise what you’re measuring. And none of the above are more important than macro conversions such as:

  • Return on ad spend
  • Gross profit
  • Lifetime value of a customer
  • Average visitor value

These are the things that really matter, the big picture metrics that make or break a business.

For example, would you care about what your cost per click is in Adwords if you’re making $10 back for every dollar you invest in advertising?

The short answer is… no you wouldn’t.

Because profit trumps every other metric in a business, whether it’s an online or retail business.

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