Before proceeding into the details of this article, let us first understand what is eCommerce. Now eCommerce means the buying and selling of products and services through the online medium. But it has been seen that many people get puzzled in loads of information available. The primary focus should be to know the vital eCommerce metrics so that you can stay on top of your online business. A plethora of information is available to the eCommerce store owners. But, one doesn’t want to make themselves lost in the end number of data available to them.
The following eCommerce metrics will help in carrying out smooth sailing of your businesses on a regular basis.
1. Assessing the Conversion Rate of Sales
Now if you want to understand sales conversion rate in simple language, then it means the percentage of people who takes the time to visit your online store or page and then make a purchase.
Naturally any businessman would seek a high conversion rate as possible. But the fact is that the average eCommerce conversion rate in the U.S. is much lower than you would imagine. It is between 2% to 3%. According to several reports, better results can be seen with Google Shopping Ads.
This is a vast topic in itself, but you can try out some of the few things that include:
- Like speeding up your product pages.
- Uploading on-demand, engaging pictures of your products.
- Using keywords for optimizing product listings.
2. Website Traffic
After you have kept a track of and optimized your conversion rate, you can then aim at bringing more people to your eCommerce store.
This is where keeping a track of your website traffic comes in.
Let us understand the conversion rate of 1% or 10 purchases for every 1,000 visits. After optimization, let us assume that this rate increased to 6% – 60 sales for every 2,000 visitors.
This isn’t assured always, but it is not necessary to ensure that if people are aware of your online store or page exists so that they can broaden your understanding of creating more sales.
For growing your website traffic, you need to:
- Perform optimization of your site or your store so that it might be easier for search engines.
- Increase the number of subscribers to your newsletter.))
3. Email Marketing
In today’s digital world, email marketing continues to be one of the most important tools for eCommerce, especially when it comes to remarketing and creating repeat business.
Similar to the website traffic, the aim is to get as many people as needed for your email list, even if they don’t on a regular basis buy your products right away.
But, if you look minutely into the website or page visitors, you will find that the people who sign up for your newsletter care enough about your brand so that you receive updates on your products and services. This means they would be accustomed to becoming paying customers later on.
For instance, you can provide a fresh new voucher or code to the latest- subscribers on their upcoming purchase.
A popular report by the Director Marketing Association or better known as DMA, disclosed that for every $2 you spend on email marketing, an average return of $43 can be expected.
4. Lifetime Value of The Customer
Better known as the CLV, it helps in measuring the total amount of your earnings from an average customer over their lifetime.
For instance, if a regular customer makes six transactions, each one worth $50, throughout their life, your CLV would be $300.
It is very important to understand that you need to deduct your acquisition costs from that number, which brings us to the next point.
Your CLV cannot be ignored because it acts as a guide for how much you can spend for acquiring customers and the extent to which you should go for retaining them.
In order to increase your online store’s CLV, you need to work on enhancing your average order value and creating loyalty among your existing clients so that they become repeat buyers.
5. Make An Estimation Of The Order Value
It means the average number that you get of every single purchase that have been made at the store. And also you want your customers to spend as much as possible on your online store.
In order to understand more vividly, just divide the sum value of all sales by the number of carts.
Keeping a track of your average order value helps you to confirm benchmarks and understand how to influence people to spend more on every purchase they make.
Below are some of the ways for instigating this metric upwards:
- Upselling complementary products that helps in improving the usability of their basic purchase.
- Providing products as a package so customers get a very minor discount on every item as opposed to purchasing them separately.
- Providing free shipping on purchases above a certain amount for luring customers in order to maximize their spending.
6. Customer Acquisition Cost
Suppose you are spending an average of $50 to acquire every single customer but your average order value is only $35, then this means that your business is under a severe loss.
This is where measuring your CAC or better known as the Customer Acquisition Cost delves in.
Your CAC helps in keeping a track of the average cost of acquiring one client, including everything from marketing and sales costs up to the cost of paying your employees and organizing your site.
This will be because of an overall figure, but you can also calculate your CAC can be calculated from sources through diversified traffic channels that include email sources, search engines or even social media.
To reduce your CAC, all you can do is:
- Enhance your conversion rate.
- Understand by optimizing your advertising so that you spend less for every acquired customer.
- Utilize your time in free or organic marketing that includes social media marketing and SEO.
- Try to give your time in referral marketing so that you motivate the existing customers for bringing in new customers.
7. Shopping Cart Abandonment Rate
This metric indicates to the class of shoppers who keep on adding products to their cart but finally leave the store without making any purchase.
These window shoppers are at times confused and cannot make a particular decision on whether to buy a particular product or not.
This Shopping cart withdrawal is more commonly seen than thought.Baymard Institute found out that 73% of the shoppers leave their carts. So in this case, it is better to ease your shopping experience, especially the checkout process, so the customers feel the satisfaction to shop in a smoother manner. The remarketing strategy will bring undecided customers back to your store with the help of specified advertisements and follow-up emails.
So to conclude one needs to understand that you shouldn’t allow the details to overload you. The above-detailed eCommerce metrics are in a precise manner so that you can stay at the top of your entire business.