The smartest decisions are based on evidence. To make the most informed choices for your eCommerce business,
Of course, some metrics are more important than others, and tracking the right ones is imperative for making smart business decisions.
So, which metrics matter?
Today, we’ll review the most important eCommerce metrics to keep track of.
Keep This In Mind…
Before diving into metrics and analytics, it’s important to revisit the idea of statistical significance. Conversion rates that are statistically significant have a difference that is not due to random chance. Essentially, statistical significance measures the confidence of a metric. Reliable metrics have a high statistical significance, and this means they should inform your decisions.
The Top 8 eCommerce Metrics
Here are the most important metrics for eCommerce stores.
The percentage of site visitors who make a purchase is your conversion rate. It’s perhaps THE most important metric and the one that should be your biggest focus. A typical conversion rate for eCommerce sites is between 1% and 5%. In general, it’s fairly easy to find the conversion rate on analytics tools. Additionally, you can calculate it by dividing the number of people who bought it by the total number of visitors.
Email marketing is an effective way to remarket to existing customers. For every $1 spent, you can expect a remarkable $44. Getting people on your email list is very helpful, so you’ll want to track your opt-ins and the sources they come from. Some email marketing tools provide built-in analytics on this. Otherwise, you can set up a conversion goal in Google Analytics to track opt-ins.
Customer Lifetime Value
The amount you earn from a typical customer over the course of their life is the customer lifetime value. Knowing this value helps you determine what is reasonable to spend on acquiring customers, and what lengths you should take to retain them.
Customer Acquisition Cost
How much does it cost you to acquire a new customer on average? This is your customer acquisition cost. To see a profit, you need your customer acquisition cost to be lower than your customer lifetime value. To make money from every new customer, your customer acquisition cost will need to be less than your average order value.
Divide your total marketing spend by the number of customers to find the CAC. You can also calculate the CAC by the source to know its value for each traffic channel.
Revenue by Traffic Source
Not all traffic is equal. There are some traffic sources that lead to more customers than others. You want to put your money and efforts into the most useful traffic sources, and stop wasting money on the ones that don’t work.
To find the most effective sources, calculate the revenue from each source. This will tell you where your actual customers are coming from, not just visitors.
Average Order Value
The average value of each purchase is your average order value. You can find it by dividing the total value of sales by the number of separate purchases made. Increasing your AOV will increase your earnings. Some easy ways to raise it are:
- Offer free shipping for all orders totaling slightly more than your AOV. If your AOV is $44, offer free shipping for all purchases $50+.
- Upsell additional products, features, or versions.
- Bundle products.
Shopping Cart Abandonment
How often do shoppers add items to their cart and not finish the purchase? Lowering cart abandonment can help recover lost revenue and increase your conversions. Track your cart abandonment rate by setting up a funnel in Google Analytics.
To lower your cart abandonment:
- Make checkout fast and easy.
- Remarket to customers with unpurchased carts.
- Send email reminders to those with abandoned carts.
Net Promoter Score
The Net Promoter Score measures your customers’ satisfaction with your brand. The two key questions to the Net Promoter score are:
- 1-10, how likely are you to recommend us?
- Why did you respond with that number?
Prompt your website visitors with a net promoter tool. Use this value to segment your customers for email marketing. These are the three categories:
- Detractors. Those who score you a 6 or lower are not excited about your brand. They are unlikely to purchase again.
- Passives. Those who score you a 7 or 8. These people are somewhat middle ground. They may be satisfied and could buy again, but it’s still uncertain.
- Promoters. Promoters score a 9 or 10. They are excited about the brand, likely to repurchase, and likely to recommend.
When reaching out to detractors or passives, find out why they didn’t like your brand and if there’s any way you can improve their experience. This is a great chance to solve small issues.
Contact promoters and thank them for their enthusiasm. Reward them with loyalty points or some small bonus to increase their loyalty further.
More Time for Metrics
Pay attention to the metrics above and use them to guide your business decisions and strategies. The only thing you need now is time for metrics, and that’s where Listing Mirror can help. Our #1 multichannel listing software simplifies the process of multichannel eCommerce operations, giving you back time to spend on metrics. Learn more by trying it out for yourself, risk-free! Get started by clicking the button below.