Neither a great digital marketing strategy, nor a captivating website, and not even stellar customer support is alone enough to create and maintain a thriving e-store. While all of these are important, they are of little use without metrics or measurable goals that allow you to analyse your online business growth. Among the abundance of metrics, let’s focus on those that directly impact the performance of your online store.
Average order value
Also known as AOV, this metric is a function of the total revenue and the total number of orders. Average order value is important for understanding the customer lifetime value and improving your bottom line. If your AOV is less than satisfactory, you can try cross-selling, where you offer products related to those a customer searches for, or upselling, where you offer them a premium version of the same item at a discounted price. To customers that buy the same item in bulk, you can offer volume discounts.
Returning customers rate
As an online marketer, you shouldn’t only aim to attract people to your store where they may or may not spend money, but also motivate them to return. Come-back customers are critical for your online store for several reasons. First, they are ready to purchase from you again and as a rule, spend more money than first-time shoppers. Also, as you don’t have to bother with the acquisition costs, they are highly profitable, and finally, they can act as your brand advocates.
Customer lifetime value
This metric calculates the total revenue a customer would add to your business during their lifetime. If your average order value is $55 and your average shopper purchases 5 times at that AOV, the customer lifetime value is $225. Google Analytics also helps you track customer lifetime value through its Audience > Lifetime Value option. By estimating a customer LTV, you’ll gain a better understanding of your marketing costs and the effectiveness of your customer attraction and retention policies.
Marketing metrics
Your marketing efforts are directly dependent on your sales – as your marketing tactics boost your e-store’s exposure, more people flock to your site where you can lead them to the end of the sales funnel and convert them into loyal customers. Among the important marketing KPIs, such as website traffic, the exit rate, time on site, pages per visit, and email open rate, it’s easy to confuse different goals, so you should consider digital marketing reporting software that is able to integrate real-time data from your preferred metric tools into user-friendly marketing KPI dashboards.
Shopping cart abandonment
An estimated shopping cart abandonment of 70 per cent san even get worse if you invest heavily in attracting customers and directing them to the shopping cart. Your goal must be to win these customers back and continue measuring your cart abandonment metrics regularly. You can get the number of visitors that added products to their cart and left it without completing the transaction by dividing the number of finished transactions by the number of created carts and multiplying it with 100. The improved eCommerce plugin for Google Analytics allows you to track cart abandonment directly from this tool.
Segmented conversion rates
The percentage of online visitors who decided to buy from you determines your conversion rate, which is a valuable indicator of your marketing and sales efforts. To calculate it, divide the total number of website visits that ended in a purchase by the total number of visitors. When you set conversion goals, you can easily track your conversion in Google Analytics which allows you to choose different types of goals. Apart from monitoring it as a whole, you should also break the conversion rate into segments like traffic source, user’s devices, etc.
Revenue by traffic source
Instead of calculating your revenue as a solid concept, you to segment it similarly to the conversion rates, so you can get a more detailed insight of your channels, identifying the ones that bring you the most and the least profit. This gives you an opportunity to eliminate those channels that generate traffic but do little for increasing your revenue. If you segment your revenue by email campaigns, organic search, or referral traffic, you’ll be able to see how your shoppers’ purchasing habits change as related to the traffic source.
To stay on the surface of the increasingly competitive online retail ecosystem, you need to become an expert user of data. Once you set achievable goals and select metrics that are relevant to your e-store, you need to evaluate and update them as your business grows.
Read More: Understanding the Ecommerce Merchant Account Selection Process