How do you measure the performance of your ecommerce store? Of course, by measuring and analyzing various data points. However, the question is which data points would give you the information you are looking for. Since all transactions and interactions of ecommerce store happen electronically, there is a vast amount of digital information that needs to be processed. The good news is that there are different ecommerce metrics available to track the business. The bad news is that there are too many metrics which can leave you baffled.
Well, fret not. Here the best ecommerce metrics that are the only ones you should be considering to grow your online store effectively.
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Contents
Sales Conversion Rate
One of the most essential ecommerce metrics, sales conversion rate gives you a complete picture of the conversion of your website footfalls. If you are getting 500 visitors every day, you would want at least some percentage (if not maximum!) of them to convert and make a purchase. However, statistics indicate that the conversion rate for a majority of ecommerce stores ranges between 1% and 5%, with only a few of them getting higher conversions. This means that as a benchmark, you should aim for a minimum of 1% sales conversion rate. So, out of 500 visitors, at least 5 should convert. Of course, more the merrier!
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- Here are tips to improve your sales conversion rate:
- Offer free shipping, trials or demos.
- Offer coupon codes an discounts.
- Use high-quality product images.
- Use rich content for product descriptions.
- Add customer testimonials.
- Use live chat software.
- Increase search engine traffic.
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Website Traffic
It is a no-brainer fact that higher the footfalls you get on your website, higher the sales conversion rate. However, with hundreds of online stores out there, it could be a tricky affair to attract visitors to your website. Check out these ways to increase your website traffic:
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- Implement search engine optimization techniques.
- Publish useful content resources such as blogs, white papers, ebooks or case studies.
- Start a referral program.
- Build your email subscriber list.
- Use influencer marketing.
- Enhance your social media presence.
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Revenue by Traffic Source
Be it ecommerce store, social media handles, mobile handsets or emails, today’s customers are omnipresent on every digital channel. The chances are that you are reaching out to your customers on more than one channel, meaning that you have to increase your marketing spend and allocate the budget to different channels. In order to find out which channel is more effective than others, you need to measure revenue by traffic source. In fact, revenue by traffic source is essential metric that no ecommerce business should take lightly. Once you have results in hands, you need to take two actions immediately – a) increase the marketing spend in the highest revenue generating traffic source and, b) lower/stop the budget on sources that are not yielding results. Here are tips that may help you improve traffic:
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- Initiate discussions with the target audience in discussion boards, community groups and forums.
- Publish thought-leadership articles.
- Use guest posting to increase the outreach of traffic sources.
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Customer Acquisition Cost (CAC)
According to a Forbes article, acquisition costs can easily surpass $100 per customer. As the business starts growing and the first set of customers is acquired, online stores piggyback on incentives to attract new customers. As a result, the gross margin on incremental sales comes at a lower rate. Naturally, CAC goes higher whereas you should aim otherwise. The following tips can enable you to decrease or optimize CAC:
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- Focus on traffic sources that give you the highest ROI.
- Target marketing campaigns to only the right audience.
- Ask existing customers for referrals.
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Customer Lifetime Value (CLV)
Surprisingly, many businesses fail to take CLV into consideration of essential ecommerce metrics. It is a metric that helps predict the value your business will derive from the entire lifetime relationship with a customer. It will give you insight into how much repeat business you can expect, what amount you need to spend on customer acquisition and whether you need an additional infusion of capital. Take a look at the following ways to boost CLV:
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- Give personal or privileged services to customers with high CLV.
- Build a long-term relationship with customers.
- Encourage customers to opt for annual subscriptions or billing cycle.
- Upsell and cross-sell to increase average order value of customers.
- Launch loyalty programs.
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Shopping Cart Abandonment Rate
On an average, 69% of online carts are abandoned by users. Do you know how many visitors abandon carts on your e-store? If not, then you must calculate the shopping cart abandonment rate. It will help also you understand the reasons why users are dropping the cart before making the payment. In order to reduce the shopping cart abandonment rate, you should take the following actions:
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- Send automated emails to users, urging them to complete their purchase.
- Provide a guest check out option.
- Use remarketing ads.
- Simplify the navigation – remove the distractions and blocks that make the check out process hassle-free.
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Email Opt-In Conversion Rate
Did you know that email marketing is the third most influential source of information for B2B customers after peer referrals and industry-specific thought leaders? According to one study, the median email marketing ROI is a whopping 122%, almost four times higher than any other digital marketing channel! So, email marketing is also a great way to get more traffic and sales. However, what if the users don’t opt-in to your emails? What if they think that you are trying to sell and unsubscribe from the list? The expected conversion rate will not happen. However, you can increase the opt-in conversion rate of emails by following these tips:
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- Include only relevant, educational and useful content.
- Don’t let your email talk about products, rather let it offer solutions to customer problems.
Offer opt-in incentives like a free trial, demo, shipping or gifts, discounts, etc. - Make sure emails have a mobile-friendly layout.
It may be an overwhelming task to measure the above-mentioned best ecommerce metrics manually. You can use Google analytics and other automation platforms to take off a load of calculating these metrics.
