Successful eCommerce businesses don’t just happen by chance; they’re successful because they keep track of the key eCommerce metrics at any given point. By doing so, they’re able to make intelligent decisions and ensure the continual growth of their businesses. However, not all metrics are equally important. If you’d like to know which eCommerce metrics represent the state of your business and can directly help you increase your online sales, stay tuned.
If you’re familiar with eCommerce terminology, you’ve most likely been acquainted with the term eCommerce metrics. But do you know which metrics are the key ones? They all have their purposes, but if you’re looking to increase your sales rates, here’s what you’ll need to keep track of:
1. Sales Conversion Rate
It’s pretty apparent why this metric came up first. If you’re looking to increase your sales rates, you need to keep track of your sales conversion rate; in other words, you need to know the percentage of your visitors who make a purchase. You can find this value using several different tools or do it manually; by dividing the number of customers who bought something by the total number of visitors. You can keep track of both micro-conversions and macro-conversions. For example, micro-conversion would be a customer clicking on your product on the category page because it’s essentially the path to a sale.
2. Email Marketing Metrics
Although some people refer to email marketing as an old-school tool, it’s a powerful one if used the right way. Here’s what you’ll need to keep track of when it comes to email marketing:
- Open rate: Your email service provider measures this statistic, all you have to do is keep track of it. It would be best if you compared open rates for each email you send, so you can conclude what works best and what needs to be improved.
- Click-through rate: Since your marketing emails should include a CTA button, you’ll want to know how many clicks were generated from it. You can either compare the number of clicks to the total number of emails sent or compare the clicks to the number of emails opened. Depending on the method you choose, this rate can vary considerably. Either way, you should let your email service provider know which metric you’d like to receive.
- Subscribe and Unsubscribe rate: Because your email list changes over time, it’s vital to keep track of new subscribers and those who opted out. The results can help you see which campaigns were successful and which ones triggered your customers to tap on the unsubscribe button.
3. Customer Acquisition Cost
Customer Acquisition Cost is calculated by dividing your total marketing costs and sales rates for some time by the number of new customers you acquired during that period. This metric should be low because if you notice it increasing over time, it means you’re spending too much to bring new customers. This metric is also referred to as the “startup killer” since new companies tend to start with high marketing/sales spending to attract leads. Still, the number of leads that convert ends up being relatively small, resulting in a high customer acquisition cost.
4. Customer Lifetime Value
Customer Lifetime Value measures how much you earn from any given customer throughout their life. For example, if you make 100$ over five transactions from a customer throughout their life, your CLV is 500$. Still, you’ll have to subtract the acquisition costs. This metric can tell you how much you should spend to acquire a new customer and how far you can go to retain them. The best practices to increase your CLV are building long-term relationships with your customers and increasing your average order value.
5. Customer Retention Rate
The CRR tracks your ability to keep your customers once you gain them. Simply put, there’s no good in losing customers as quickly as you acquire them. To measure this value, you should subtract the number of customers you gained over some time from the total number of customers at the end of that period. You’ll need to divide the result by the number of customers you had at the beginning of the period and then multiply it by 100. The result can give you a clear insight into customer loyalty and customer satisfaction.
6. Revenue by Traffic Source
As you probably know, not all traffic is equal. Simply put, you should spend your money on sources that send visitors who will likely convert into customers. To find out which sources work best, you’ll need to calculate your revenue by each one of them.
7. Average Order Value
The AOV metric tells you the average value of each purchase. To discover yours, you’ll need to divide your total revenue over some time by the total number of orders (or shopping carts) completed during that time. If you sold products worth 100,000$ yesterday, and 100 different customers ordered those products, your AOV for the day would be 100,000$/100, or 1000$ per order.
8. Shopping Cart Abandonment Rate
It’s pretty unpleasant to see your potential customers fill up their shopping carts only to abandon the carts before finalizing the purchase. We highly advise you to keep track of your shopping cart abandonment rate since it can point to some more significant problems occurring on your website. To calculate this metric, you’ll need to divide the number of completed cart checkouts by the number of carts loaded for a period of time and multiply the result by 100. If this metric is high, it may be due to:
- high shipping costs or unexpected fees,
- no guest checkout option,
- payment security concerns,
- extremely long checkout process, etc.
9. Bounce Rate
The Bounce Rate is a metric closely related to the previous one. It is essentially the percentage of visitors on your website who navigate away from it after viewing only one page. A customer who navigates away from your website is typically referred to as the one who bounces. You can calculate this percentage using the total number of one-page visits on your website, divided by the total number of entries. Several tools can measure this for you, so there’s no excuse for neglecting this metric.
10. Net Promoter Score
The NPS is typically measured by sending out a survey to your website’s visitors, asking them how likely they’d be to recommend your business on a scale of 1-10. This metric can be a fantastic way to gauge your customer satisfaction.
11. Refund and Return Rate
Although businesses have to accept the returns, a high refund and return rate can significantly degrade your brand image and credibility. This value is measured by comparing the percentage of product returns accepted to total sales. A high return rate leads to additional costs for your business but also unsatisfied customers.
12. Support Rate
The support rate calculates the number of your customers and visitors who need support before they make a purchase. If this metric is too high, you probably need to work on your website and provide more information on your products, shipping and return policies, etc.
As we stated earlier, keeping track of these key eCommerce metrics goes a long way towards improving your sales rates. The results you get can help you make smart decisions, point out certain issues your business may be dealing with, and enable you to make long-term plans for growing your business. Keep in mind that measuring these values is equally important for every eCommerce business, including the ones that use blockchain eCommerce technology, that will be more and more popular among merchants. Websites act as a treasury when it comes to important data and information, and thankfully you can choose from various tools that can break down each metric by device use, location, campaign, product, etc.