Like it or not, if you want to win at ecommerce you have to be obsessed with data!
Tracking key ecommerce metrics not only allows you to be better but also drives more sales and revenue, be more relevant, accessible and un-missable! From your promotional messaging to marketing campaigns, website changes to user experience enhancements – all decisions must be based on data that you have tracked, monitored and analyzed over time.
Right from the word go – when you make the decision to go online and build your ecommerce website – you need to track certain metrics that allow you to start on a stable foundation. Assuming you choose the WordPress CMS to build and manage your online store and opt for WooCommerce Hosting to power your online store, the next step is to understand your target audience and get the right plugins that will allow you to offer the right shopping experience. Then, you may need to think about SEO, marketing through different social platforms, and other add on services that will help you reach your target audience – all these decisions should and must be based on data you have collected over time about who your audience is, how you want to position your brand, what your value proposition must look like, etc.
To be successful at ecommerce you must:
- Set goals that can be measured
- Identify the right metrics that will help you measure these goals
- Track and analyze these metrics to make changes as necessary and strengthen your plan of action
Now that we understand how important measuring key ecommerce metrics is, let’s dive in and identify some of the most important ecommerce metrics that you must be tracking.
Important Metrics for Ecommerce That You Must Track
Depending on what you offer, there might be some specific metrics that you may need to track, however, there are some metrics that are industry-agnostic and anyone running an ecommerce store must absolutely track. Here we are going to list the most important metrics for ecommerce, regardless of where you are, what you offer or who your target audience is.
In a nutshell, all the key ecommerce metrics we must measure can be bucketed into four categories:
- User Experience
- Customer Satisfaction and Support
All the important metrics will fall under either of these four categories. So, let’s get started.
Putting in the effort to get more and more people to visit your website is important, however, what’s even more important is measuring how many of these website visitors ‘convert’, which means make a purchase. Conversion rate is a measure of customers that complete a sale on your website, thus affecting your revenue/sale metrics. You must measure this to understand your overall sales and drive strategies to improve conversions. You can compare it with page views, website traffic sources and other metrics that show how many people visited/viewed products Vs how many actually made a purchase.
When you sell a product, the revenue you receive is not your total profit earned. You invest money in inventory thus your gross margin is the money you earn after reducing the money invested. For example, if you invested 60 Rupees in procuring inventory, and sell it for 100 Rupees, your gross margin is (100-60) 40 Rupees. This helps you understand your actual profit and thus measure the sustainability of your ecommerce store. Gross margin helps you track growth and actual revenue earned.
Cart Abandonment Rate
Card abandonment rate is a measure of people who added products to the cart but did not complete the purchase. This metric helps you understand the percentage of customers that are interested in buying products but do not complete the buying process, thus helping you identify issues that could be stopping them from buying, and/or developing marketing strategies to nudge customers to complete their shopping process. Along with this, you must also measure how long these customers spent on your website, how many products they added and the value of the order to better strategize on how you can get them to come back and shop with you.
Checkout Abandonment Rate
This is the next step to cart abandonment. Here you measure the percentage of people who initiated the checkout process after adding orders to the cart but do not complete the checkout process. This metric helps you understand how seamless your checkout process is, what you can do to make checkout easier, faster and simpler and other reasons that people abandon their buying journey at the checkout step.
Average Order Value
Average Order Value is a measure of the average amount of money spent by an average customer on your website. Additionally, you can also measure the average value order of abandoned carts to get a comparison between the average money spent Vs the average cart value abandoned. This will help you understand your customer’s average spending power and thus create campaigns that will be more ROI positive.
Cost Per Acquisition
Every time you get a new customer, there’s a certain amount you have spent on acquiring them. This could be an ad you’re running on social media, email campaigns, discounts or offers or any other strategy you have invested in through which a customer comes in. Measuring this helps you understand how much money you spend on acquiring a new customer. Over time this will help you in better budgeting your marketing campaigns, effectively positioning promotions etc. Parallelly, you must analyze and measure the sources you’re acquiring these new customers from, the average order value of these customers and other metrics that will enable you to acquire more customers through fool-proof strategies.
Revenue from Ad Spends
Every time you run an ad and earn revenue as a result of it, divide the total revenue earned by the total money you spent on the ads to know how much you earn for each dollar spent on advertising. This allows you to understand how much you need to spend on advertising to be able to earn a certain amount of revenue. This will also help you understand what advertising platforms work better for you and get you more value on the total advertising spend.
Other Key Ecommerce Metrics
While we have already discussed some of the most important metrics that every ecommerce store needs to measure, that’s not all! While all the metrics mentioned above will directly help you sell more and make more money, there are other indirect metrics that you need to measure to further boost your success.
Sales and customer satisfaction can be measured through many other metrics, some of these that you must focus on are:
- Device Type: Understanding what devices your customers are using to interact with your website will help you offer a better user experience for them. Ideally, your ecommerce website must function well across all devices, but gaining this insight is important to have more targeted results.
- Site Speed: How fast your website and website pages load directly affect the customer’s experience of doing business with you.
- Bounce Rate: Measuring the percentage of people that leave your website after visiting one page will help you gain insights on why people choose to leave and how you can influence them to stay and engage with your business. This could be a direct result of a bad website experience or poor campaigns where the visitor coming from a specific campaign does not find the right value on the page it leads to.
- Customer Engagement: Customer Engagement is a measure of how your audience is interacting with your business/campaigns. This can be measured through reactions, likes, shares, subscriptions, comments etc. The more your audience engages with you, the more likely they are to go ahead and shop from you.
- Traffic Source: Measure your website traffic and where it’s coming from. This will help you understand what platforms are helping you garner the most traffic and thus create more targeted messaging and position yourself better on other platforms.
Get Started with Ecommerce Key Metrics
If you’re just starting your ecommerce journey or looking for ways to boost sales and revenue – use these ecommerce metrics to get finer results and offer more value for your customers. Metrics are a direct reflection of how people are responding to your website, campaigns, ads, promotions and everything else you’re doing to make a strong digital presence for your brand.
Keeping an eye on these metrics and using them to create stronger growth strategies is a sure shot way to success. As you grow, you can dive deeper and focus on other metrics to go to the next level of your ecommerce game!
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