Hey guys, I came across this Shopify guide and set up a goal/funnel for one of my products. I'm failing to understand how these are helpful. Anybody smarter out there willing to explain this in a way a girl like me can understand?
Goals in Google Analytics are the actions of a customer that are of a value to you as a business. In general the most high level goal for an e-Commerce business is a transaction, and the value of that goal is the $ value of that transactin. But in reality only 1-3% of your visitors rach that main goal, and 97-99% will leave your website without a transaction.
This is where goals in Google Analytics come into play. You need to analyse the behaviour of those 97% of customers who doen't buy, so you can optimise your website and increase your conversion rate.
Of those 97%, some stay more, some view more pages, some check your look book, some add something to cart, some view shipping info page etc., you can setup each of these actions as a goal in Google Analytics, and assign economic value to them. This comes handy when you want to evaluate or compare the quality of different sources of traffic or geo-demographic segements to see which is doing better in terms of bringin in economic value, so you can make better business decisions such as marketing budget allocation.
I give you an example, let's say you know that people who spent more time on your website are more likely to buy, and you see from your GA reports that the avg. time a customer stays on your website is 2 minutes. You want customer to stay more than average so you set up a goal in Google Analytics for a visit that is 3 minutes or longer, and you assign a $ value to it, say $1.
Now you can check traffic sources and see which one of them are bringing more of this goal conversions for your website. If a source of traffic (i.e. Search) is bringing more users who are achieving this goal than other channels, then you know it's more worthwhile than other traffic channels.
Of course the ultimate goal in an e-Commerce business is Revenue and number of transactions, but when there's a lack of meaningful data for those goals (i.e. low number of transactions) then you can draw conclusions based on the performance of segments towards these micro goals.
Funnels are structured paths a user has to follow to achieve a goal. You setup funnels to understand user behaviour and find bottlenecks and fix them so more people convert to that goal. This is a bit complex and I feel I might not be describing it very effectively for you.
Setting up goals and funnels is worthwhile if you have the skills to analyse the data after a while to draw insights to inform business/marketing decisions OR you have the intention of hiring an analyst to do the analisys and come up with suggested actions/insight for you in the future.
In addition to what Sia wrote, goals in Google Analytics will help you understand what should you choose to put your efforts in, as well as where to focus your marketing budgets.
Say, for instance, that you have a Facebook Page, an Instagram Page, Google Adwords and Facebook Ads. You should be able to look at your Traffic Sources in Google Analytics and see which of those are actually giving you the most results. You need goals set up to do that.
If you use Google Url Builder, you can check your Campaigns Report in Google Analytics to learn exactly which campaigns are selling better.
See image attached of how your Campaign Report will look like.
If you need any help setting this up, please write to ramon(at)compass.co.
Content Marketing & Growth at Compass.co
The #1 Reporting App in Shopify
By the way, I'm organizing a free webinar on How to Use Data to Drive More Sales to Your Store.
We'll go over how to use Google Analytics and which metrics are important for you to watch out for to manage your business.
Hope to see you there.