Key drivers for accelerating your eCommerce growth

Find out what are the most relevant ideas from the webinar "Top KPIs that you can't miss for your eCommerce Growth" with experts from Facebook, Hannun and Ritmo. Watch the video again if you missed it.

At Ritmo, we continue to work hard to support eCommerce entrepreneurs not only through funding, but also to generate a community where knowledge and insights are shared to help digital businesses continue to grow. That's why we are launching webinar sessions with experts, allowing us to learn from the experience of other successful founders and learn about new tools and companies that can help companies grow.

We would like to share with you the most important ideas that we have gathered from the session "Top KPIs that you can't miss for your eCommerce Growth". If you missed it or want to watch it again, you can access the full video of the session here, please, note that the whole session is only available in Spanish.

This meeting aimed to go deeper into what are the growth strategies, as well as the most important metrics and how to measure them that can help drive the growth of an eCommerce business.

Riki Porta Valero, who is in charge of FB strategy for startups, provided us with his vision from the point of view closest to paid media strategies.

We also met Joan Álvarez, CEO & Co-Founder of Hannun, a DNVB (Digital Native Vertical Brand) specialising in selling handmade sustainable furniture revenues of more than 5 million euros and already trading in more than 35 countries... in just 2 years.

In terms of analytics, we have the expertise of Iñaki Mediavilla, with previous experience in high-growth companies such as Softonic and Typeform, and who has also worked in consultancy helping various brands and e-commerces in growth and conversion projects. He is currently the CPO and Co-Founder of Ritmo.

1. Understand what makes your brand different

One key element that sets DNVBs like Hannun apart is to follow a customer-centric strategy, where the customer is at the centre of all acquisition, development and sales strategies. It is, therefore, very important to create a context around the brand that allows delivering a story to the customers. This is a combination between the brand (branding) and the actions to make itself known (performance), which is known as Brandformance.

For DNVBs, building a community of followers is a key element in their success. It is not enough to simply launch a campaign on Facebook and wait for sales to come in, you have to work on educating and informing the community beforehand for this campaign to work. Social networks have become the portal for many brands starting out and in many cases, the community is created even before there is their eCommerce site to sell their products.

At the same time, some brands are more focused purely on performance and do not need to dedicate time and resources to creating a community. However, in any case, having a community of followers will always provide an extra point of confidence in any brand for potential new customers.

2. Capital Allocation

Ecommerce businesses can get financial resources from different agents, from its revenue, venture capital investment, bank debt... It is just as important to raise capital from different sources as it is to know how to use these funds to finance the right issue at any given time.

From a financial point of view, it is not very profitable to use the capital raised from long-term debt or equity (funding from VCs or private investors) to pay for working cash flow activities such as investing in digital marketing campaigns or buying inventory. These are activities where you need to invest a lot, but the return on investment is relatively short. For example, in a Facebook advertising scenario, the return can be 60% on the first day, 80% in 10 days and more than 90% in about 21 days.

Therefore, such activities should ideally not be financed at the expense of diluting the founders. The money raised from a funding round can be used to build a good team and generate that layer of value and community that builds brands

Revenue Based Finance (RBF) is a very interesting option for financing expenses such as advertising or inventory. This form of financing allows you to get the money when you need it and pay it back in exchange for a % of future sales, so it gives you a lot of flexibility to generate more turnover in your digital marketing campaigns or inventory and consequently an increase in revenue.

RBF is also a key ally to take a little more risk during annual sales peaks such as Black Friday, Christmas campaigns... where you need to invest more in advertising and inventory to make the most of these occasions. This type of financing allows you to take advantage of this type of opportunity without damaging your company's cash flow and with a type of debt product that does not enter CIRBE. Ritmo has been the agent in charge of helping Hannun to make the most of its growth, thanks to this type of financing.

3. Invest in performance marketing

For digital native brands, we talked about the need to create a community as one of the basics to make the business work. Although it is not a core requirement for all eCommerce, it will help you more or less depending on the advertising channel you are going to use.

Regarding Facebook Ads, it makes a lot of sense to have a strong community of followers, as it generates trust in both existing and future clients when it comes to international expansion. The fact of having a large community on social profiles such as Facebook or Instagram allows you to extend the growth and expansion phase vs. those who are not able to create this community, who see how their growth slows down earlier.

Although talking about building a community cannot be identified as a KPI as such, it is a very relevant aspect when it comes to achieving exponential growth.

When it comes to Google advertising, the creation of this community is not as important as having a well-optimised website and a good user experience.

Depending on your brand and the type of product you sell, you will find some advertising channels more interesting than others, but this does not mean that they are incompatible. Scaling several channels at the same time will allow you to scale the company with more guarantees. The most important thing is to keep in mind the performance of all the company's actions. Channels tend to become saturated and the return on investment is less and less once they reach this point, so it is very important to have control and monitoring of all of them.

*Extra Tip → What are the basics of a Facebook Ads campaign?

Pixel. You must place the Facebook pixel within your eCommerce platform (Shopify, WooCommerce ...). This pixel allows measuring each event on the website and each event that happens within the marketing funnel. In this way, the Facebook algorithm will optimise the campaigns and show them to users who are more likely to perform the specific event that you have defined, such as "view cart", "check out", etc.

Catalogue. It allows you to see all of your products on your Facebook or Instagram profile and tag them in your posts and people can buy them. This is known as Facebook Shopping and Instagram Shopping. In addition, having your eCommerce catalogue on Facebook will be very useful for remarketing actions, as when a user has seen a certain product, the algorithm will show that particular product in the ads shown to the potential customer.

Campaign structure. Facebook recommends the broadest possible segmentation, both in terms of segmentation and the different options available to advertisers. The goal is to allow the algorithm to select and optimise one part of the audience or another within the more generic audience, depending on the purchase triggers it receives.

4. Understand what KPIs are the most important and how to measure them

KPIs (Key Performance Indicators) refer to the most important metrics that you have to address to evaluate the performance of all the actions you are carrying out, in this case, for your eCommerce.

Each business will have particular KPIs to attend to but, in general, we can say that the most basic and most important ones for digital businesses are:

AOV (Average Order Value) → average order ticket
ROAS (Return on Advertising Spend) → return on advertising spend, indicates the performance of online marketing campaigns
CAC (Customer Acquisition Cost)
Conversion Ratio → percentage of users who purchase from our site vs. number of visits
New vs. returning customers
Cart abandonment rate

By measuring and studying these parameters, eCommerce founders will be able to make better decisions that will help them get closer to their sales goals. Measurement gives you the ability to react when things are not working as expected.

How to measure this KPIs?

Multiple platforms can give you information about the different metrics. For example, in Facebook Ads Manager you will have all the information about the performance of your Facebook campaigns, in Google Ads everything about Google advertising, Google Analytics can offer you more information about the behaviour of users on the web... The problem lies in the need to combine all this information in a single report to have a general idea of how things are working in the company.

There are many tools and aggregators for this purpose, such as Supermetrics, but the more information and insights they offer, the higher the cost.

At Ritmo, we detected that unifying all this information in a report was a common problem for many entrepreneurs who were losing valuable information because they did not have this vision. To help solve this problem we developed Ritmo Insights, a free growth analytics platform that allows users to have all this information at their disposal without the need to import data manually or make integrations between APIs.

As Ritmo has already integrated with a wide range of platforms and APIs to be able to evaluate the metrics of our potential customers, we decided to take advantage of all this information and share it with users through Ritmo Insights. The platform integrates all the insights that users provide us with by linking their sales (Shopify, WooCommerce, Prestashop, Amazon Seller Central...) and marketing platform accounts (Google and Facebook) we process the information and return it in the form of KPIs that we consider strategic when managing an eCommerce without the entrepreneur having to worry about collecting the data.

Our platform is open to all users free of charge, independently of whether or not Ritmo enters into any financing operation. If you are interested, you can access it here.

With Ritmo Insights we hope to be able to help many entrepreneurs.

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