When managing an online store, you must always keep its operation under control. Tracking metrics for ecommerce is a big part of this. Doing so will help you understand how your business performs. Are your customers satisfied with the store’s interface and employee behavior? Are there any areas for improvement? Keeping your finger on the pulse, you will be able to make the necessary changes straight away.
As we at Data Crafts provide digital analytics services to ecommerce businesses, we’ll share the essential metrics that we recommend monitoring.
Critical Eсommerce Metrics Defined
You need to assess the progress of your online business regularly. It should be easy to do knowing the correct metrics to follow. You can discover what drags your business down and what makes it prosper. You can also check your customers’ satisfaction with the online store. Based on the collected information, you can make specific changes.
Key metrics for ecommerce cover different aspects of your website. How effective is your business at accomplishing particular goals? How many customers enjoy their online experience with your store? These insights show whether your marketing strategies have been adequate so far. And if not, you need to improve them or employ new ones.
Do ecommerce metrics and key performance indicators (KPIs) mean the same thing?
The difference between both notions might be obscure. A metric tracks the current status of the business. A KPI indicates whether the predefined business goals are achieved and/or the degree of efficiency. Generally, KPIs can serve as a separate category of indicators that provide critical insights into the business.
Key Ecommerce Metrics to Track
How does your business perform in the short and long run? What are your customers’ attitudes? There are even more things to consider when analyzing your business’ progress. Subsequently, you can make some improvements based on what the key ecommerce metrics reveal.
Here are the metrics our analysts consider the most important to monitor:
Shopping cart abandonment rate
Customers add products to a shopping cart but leave the site before purchasing. This is a common problem for online stores that must keep customer engagement high. According to Optimizely, the three leading reasons for cart abandonment are lack of trust, higher-than-expected shipping costs, and a complex checkout process. You should ensure that the shopping process is customer-friendly, page loading times are 3 seconds or less, and the checkout process is fast and straightforward, with a wide variety of shipment and payment options.
Currently, it is estimated that the average cart abandonment rate across the industry is around 70% and even higher for mobile buyers – up to 85%. In turn, the good thing is that the timely application of optimization strategies can lower the rate by as high as 35%.
Average order value (AOV)
Knowing what your customers need and how they spend their money is essential. You can rely on this information when building up marketing concepts. It would be best to find a way to motivate customers to spend more time and money on your website. For example, you can set a minimum order limit for “free shipping” and/or create a customer loyalty program.
Increasing this type of ecommerce metrics can boost revenue and profitability simultaneously. In any case, always pay attention to this metric.
Customer acquisition cost (CAC)
Getting a new customer must be adjusted to your business capabilities. The lower you keep it, the higher profitability you can reach. It is crucial to avoid overspending in any case. Knowing the CAC, you can estimate the marketing campaigns’ success and amend the existing strategies to achieve better results.
Average time spent on a website
The average session duration demonstrates how long visitors stay on your website. In Google Analytics, this metric is measured by monitoring the user activity within a specific timeframe. The sessions with over 30 minutes of inactivity are considered interrupted. Since each session represents a new customer, the total session time is perfect for measuring an online store’s short- and long-term success.
Churn rate
The number of customers your company loses over a certain period is a serious indicator. When it starts growing, you are doing something wrong. And you need to figure out the reason for the decline as fast as possible. Do your customers lose interest in your products and services? Have they lost interest in your products or services? Or is there any other explanation? Figure it out!
Customer lifetime value (CLV)
A customer’s total value on your website helps you keep your marketing initiatives right. You estimate one of the most important ecommerce metrics with the web analytics tool or the transactional database. The result will help you understand how much revenue your customers generate throughout their interactions with your brand. Thus, you can focus on the most valuable customers who bring you regular profits and traffic. Creating separate marketing campaigns for each customer segment can be a good idea, addressing their needs with varying degrees of diligence.
Best-performing products
Ecommerce metrics may vary between different products. For example, some products have better sales while others bring more traffic. You must set your marketing priorities right to retain the revenue potential. Suppose it does not make sense to spend crazy money on advertising less popular items from your online store. Instead, you optimize your stock, product, and merchandising expenses.
Return on investment (ROI)
The return on your marketing and advertising campaigns is a significant indicator of your company’s progress. By tracking ROI, you can ensure that your marketing efforts bring positive results. If you still need to, you can adjust your strategy accordingly. You must employ specialized marketing platforms or backend connected to web analytic tools to collect the necessary data.
Return on ad spend (ROAS)
Each dollar spent on advertising must generate a specific revenue. It is hard to estimate the perfect ROAS. However, many specialists agree on the optimal value of 400%. Your online store is supposed to get $4 for every $1 invested.
Top organic keywords
Many ecommerce websites focus on paid traffic for business growth and ignore the usage of organic keywords. The latter can generate a solid ROI. SEO optimization does not promise short-term results but can be incredibly effective from a longer perspective. Using a professional rank tracker, you can monitor traffic from organic keywords and evaluate performance in search engines.
Conversion rate
The percentage of visitors who make a sale or fill out an online form on the website is a significant signal. It sheds light on the business’ effectiveness in customer retention and digital sales. To make the necessary calculation, you divide the number of conversions by the number of visitors. The result reveals the actions that might increase your online performance.
Net promoter score (NPS)
This kind of ecommerce performance metrics is related to the possibility of your customers recommending your company to other people.
Leads generated
The users show interest in your product or service by registering an account, completing desired actions, or subscribing to the newsletters. Leads generated demonstrate the effectiveness of landing pages and marketing tactics. This is incredibly useful if you have a customized offering or sell expensive items where you may need to discuss the details with a potential buyer in advance.
Email opt-in rate
Email marketing is an effective way to boost revenue and attract new customers. So it is vital to have people interested in receiving your emails. To make it work, you must offer a discount or any other perk to everyone who signs up for a sending list.
Refund and return rates
Small and large brands should track the number of refunded or returned products. You should take it as a red flag if it exceeds the total number of orders. Then, something might need to be fixed with product quality or customer satisfaction. A high refund rate may cause reputational damage to your brand besides shrinking revenue, leading to further decline.
You can evaluate all too numerous aspects of your website’s day-to-day operation. Instead, it would be best to consider which ecommerce metrics to track. Make a choice based on the strategic goals you want to achieve.
Are You Excited about Tracking Ecommerce Metrics on Your Website?
When you start any business, online or otherwise, you want it to flourish. But it cannot be possible without a regular diagnosis. You can identify potential issues by monitoring the top ecommerce metrics and immediately start looking for solutions. If you are not ready to do this alone, you can always ask us for help.
The Data Crafts teams provides professional digital analytics services to small and large ecommerce businesses. Contact us today to book a 30-minute free consultation with our expert. Let us discover the best opportunities for your business so we can unleash all the hidden profit potentials together.