Important eCommerce metrics you need to know about
To keep an online eCommerce business running requires essential decision making and good store performance. And how does someone know what makes a good store performance? Or what kind of decision making keeps the business running? Well, the answer for both the question is metric.
What are eCommerce metrics?
Metric is any quantity or number which calculates to define a website’s performance. E-commerce metrics may refer to conversion rate, order value, the website traffic and more. Many businesses believe that prosperous businesses tackle metrics to get information and make decisions. Metrics also helps provide information about how your store performs, the expected value of products, updates on how much your store sells in a day, week, month or year.
You can track many different eCommerce website metrics, but we will discuss only a few metrics that will directly help your business’s growth.
Conversion rate can be known as the ratio of people who visited your store and made a purchase. It is necessary to know about your sales conversion rate to understand if your business is making any profit. You can use tools to calculate the percentage or manually calculate by dividing the number of people who purchased a product by several visitors. If you aren’t happy with the results, you can work on improving your conversion rate.
You can start by:
- Increasing the speed of your pages
- Improve your product listings by using related keywords
- Posting high-quality product images
Once you are aware of your sales conversion rate and how you can increase it, the next step will be bringing in more visitors to your store. You can do that by increasing your web traffic. Web traffic refers to the number of data sent and received by guests to a particular website. You can find the result by the number of guests and the number of pages visited by them. If you are still not pleased, you can work on growing your website traffic by following these steps-
- Promote your products on social media channels along with exciting offers to gather more people
- Improve your website search rankings with an optimised Manchester SEO strategy.
- Try to get more followers or subscribers by creating compelling and good quality content
Despite living in a social media-centric world, the old school way of email marketing still plays an essential role in the eCommerce market. Email marketing Opt-in Rate is a percentage of visitors who visit your site and subscribes to your email list. Your business email list will consist of information or update about your store, products, newsletters and any communication from your end. This way, you stay connected to your visitors, who can become potential customers.
According to research, 59% of marketers trust that email marketing helps deliver the highest return on investment (ROI) than other marketing media. Hence, email marketing is still very much practised and encouraged business growth.
Customer Lifetime Value
It is essential to know how much money you earn from an individual customer to set a standard bar on how much you can spend to obtain your customers and put efforts to keep them. Customer Lifetime Value (CLV) will help you which such calculations by measuring the total amount of earnings you make from a customer through their lifetime.
You can also expand your business’s CLV by boosting your order value by raising allegiance between your existing customers so that they become regular buyers.
Customer acquisition cost
It is a fantastic feeling when a customer purchases a product from your store. The effort behind making it happen should be acknowledged, especially one critical unit called Customer Acquisition Cost. The cost of acquiring a customer to buy a product is known as CAC. You can calculate CAC by dividing the marketing expenses spent on getting a customer by the total amount of money spent on developing customers in a period.
To gain more money, your CAC has to be less than CLV. Following are steps you can look into to lower your CAC cost-
- Upgrade your site for more chances of conversions
- Effectively use your paid ads so that you don’t spend more on other means of promotion
- Invest in social media, content marketing, email marketing
- Have a guideline program so that your customers can refer new customers to your store
Average order value
Average order value (AOV) is one of the eCommerce metrics that estimate every purchase’s total average value. You can calculate your AOV by dividing the full value of sales by the number of orders taken. It is inherent to desire that your customers spend more so that you can earn more, and for that, you need to increase your AOV. Below are a few guidelines that can help you achieve it.
How to increase your Average order value?
- Use the sales technique of upselling your products to the customers to spend more by purchasing upgraded products.
- Advertise combo packs so that the customers pay a little more money in buying the package rather than spending on individual products
- Recommend various other products which may complement the products your customers purchase
- Attract your customers into paying more by offering free shipping on purchasing above a particular amount
Shopping cart abandonment rate
This particular metric talks about the percentage of customers who adds a product to the cart but leaves without purchasing it. According to research, over 70% of buyers will abandon their eCommerce cart. Your mission is to attract customers so that they don’t leave without buying. Here is what you can do-
- Make the shopping experience easy and hassle-free
- Remarket your business to bring in customers back to your store
Keep an eye on your metrics
You need to check up on your metrics and calculate them often and take necessary actions on the basis of the results. Being aware of your metrics will help you prepare and make suitable strategies accordingly for running a successful business.