The metrics that e-commerce should track vary depending on the goals planned by marketing or a specific campaign. There is a lot of data that can be tracked and measured, but we have to take into account those that help us get the results we are looking for, and that aligns perfectly with the objectives of the e-commerce business. The challenge is not about how much data we have, instead, the real challenge is the conclusions we draw from the data that have already been provided to us. Once you have a clear goal, then you should choose what metric will be tracked.
Here are 6 metrics that are relevant to achieving some common goals of an online store:
1. Sales conversion rate
Conversion rates are those in which website visitors complete a default action, in this case, making a purchase. In e-commerce, the sales conversion rate is the percentage of people who visit your online store or website and make a purchase. For example, if your store had 1000 visits last month and of those who visited, 10 were converted to sales, your online store's conversion rate is 10/1000 = 1%.
Some actions can be implemented or improved to increase this metric include:
Working on CTAs (call to action) or calls to action: They are a key tool to lead visitors to the action you want them to take. These CTAs should be as clear and simple as possible since the main goal is to decrease the steps that the user must go through until the action is performed.
Pay attention to the user experience: features such as usability, simplicity, and design make a difference in customer satisfaction. Your brand must have a friendly interface, which also works on mobile devices and gives the potential customer quality in the images and descriptions of the products they may be interested in.
These metrics are influenced by various internal and external factors that each online store must explore. Testing, customizing, and optimizing can help determine which factors help this conversion rate and which ones harm it.
2. Shopping cart abandonment rate
It is also important to track the different metrics that the online store website gives us. The more people who get to know the website the more likely they are to become customers and maximize the sales.
One of the most relevant metrics that we can find in the traffic of a website is the abandonment rate of the shopping cart. This measurement allows us to track how many times users leave the online store without making a purchase.
Among the main drawbacks that a user identifies are the payment process, website security, or experience. The user may not have been ready to buy, but this data must be taken into account to encourage the customer, provide them with all the information so that they can decide on their purchase. If the purchase process is unintuitive, it will surely cause problems for the user.
Tracking this metric is important because you have to change the perspective and not think that a sale has been lost, but that you have a sales opportunity. You have to impact the purchase intent process to get that future customer.
What you can consider to decrease the abandonment of your shopping cart and increase the traffic of your website is:
Provide the user with all the information available about the product or service.
Highlight the offers and discounts in your store.
Offer multiple payment methods and optimize the purchase process.
Optimize the website for search engines.
Make contact with those who have left the shopping cart via email.
According to a SaleCycle report, almost 50% of emails sent to users who have left the cart are opened to buy it, and more than 13% of them click to return to the store.
Other metrics to consider within your website are the number of visits to your website, the number and percentage of new visitors and recurring visitors, the time a user stays on your website, the number of pages viewed per session, and the bounce rate.
3. Email acceptance rate
Today, email marketing remains one of the most important tools for e-commerce businesses. Also, when it comes to remarketing it turns out to be a fairly efficient process. Remarketing is a system that allows you to create tailored or personalized ads for users who previously visited a website.
Click-Through Rate (CTR) is one of the main metrics of email marketing and through it, we can demonstrate the response of the recipients of the emails we send as part of our campaigns. This rate refers to the ability of the marketing campaign to drive the user to act on the website.
The people who are enrolled in your newsletter are sure customers who know your brand and reputation or potential customers who want to know more, so it is important to do the tracking of the campaigns via email. To increase this acceptance rate you can think of:
Offering some value in exchange for email addresses, such as offers and special discount codes.
Share interesting content and updates to your products or services.
4. Value of customer's lifetime
The customer lifetime value (CLV) is a long-term estimation metric and refers to a customer's value based on the relationship it has with the company over time. This value is estimated between 3, 6 months, or one year, and serves as an indication of the expected revenue for each customer during the period chosen.
This metric compiles data from all departments of your company: marketing, sales, development, logistics, and more. It allows you to focus on the most valuable customers and adjust the budgets and audiences that contribute the most revenue to the company, thus getting a better return on investment (ROI) of your campaigns.
ClV is indispensable as a benchmark for an e-commerce business to know how much you can spend to acquire customers and how much you need to do to maintain them. To increase this metric, you could:
Adjust business efforts on those customers who have the most value for the company.
Build loyalty among existing customers so they become regular buyers.
5. Average order value
This metric refers to the average value of each purchase that is made in an online store. To calculate this average, you must divide the total value of all sales by the number of shopping carts or orders placed. The data that this average gives you, will allow you to set important benchmarks for planning how to make people spend more on every purchase they make.
If a customer is spending time and money on your business, it means they trust the brand and product you offer, so the best time for your customers to spend more money in your online store is when they're buying. This value is one of the key metrics that e-commerce must monitor.
By monitoring the average order value or AOV (Average Order Value), it can help you to: increase your total business revenue, adjust pricing strategies, determine which products or services are most successful, understand what the customer's shopping experience looks like, and anticipate the potential risks or errors that may occur when making the purchase. You can accomplish this if you think about:
Offering incentives to customers like free shipping.
Improve the customer experience by offering product packages or add-ons depending on what they need.
According to a BigCommerce survey, shipping price and speed are influential factors to make purchases. 45% of customers who were surveyed said they decided not to purchase due to high shipping costs.
6. Repeated purchase rate
The repeated purchase rate refers to how often a customer buys from your online store again. The possibility to retain customers is a key goal for e-commerce businesses and with this metric, it is possible to measure how many users return to buy your products. While you should always think about looking for leads, you also have to pay attention to the customers that you want them to become recurring, to do so, database analytics is a valuable tool. Through this, it is possible to customize and segment customers.
Paul Farris exhibits in his book Marketing Metrics, that a customer who returns to a store, has between 60% and 70% chance of conversion to make a successful purchase. This leads us to think that the more loyal customers you have, rates like the abandonment of shopping carts will be reduced.
So, once you've earned a customer's trust and got them to buy you for the first time, what do you need to do to keep them shopping in your store?
Get to know customers up close, invite them to participate in the studies and analysis of the business.
Reward the recurrence of purchases with benefits.
Here are some metrics that can help an e-commerce business get started knowing the data that users are providing all the time. As an online store grows, its numbers will increase more and more to track, measure, and take improvement actions for the site. Working on improving one metric will surely have an impact on others, but this will be variable depending on each company. What is relevant, is to have a starting point and not fall behind in all the utilities offered by the data.
Remember that loyal customers are those who share more information about your brand, and tracking the above metrics will allow you to improve your customer retention strategy and the user experience in your e-commerce.