The most successful businesses are not built in the blink of an eye. There are many metrics that need to be filled and checked along the way to observe the performance and make the right decisions. No business can survive unless they keep track of their performance and improve with time. Offline businesses used to be complicated and time-consuming so the most wonderful thing about digitalization is, it is easy, quick, and user-friendly. One can easily track the determinants that reflect a company’s present status and help make futuristic decisions with data-based information.
E-commerce metrics might be new to the ones who have recently started their online store but is as important as building a site itself.
Running a business without metrics is like sailing a ship without navigation, you won’t know where you are and where to go. You may end up at the wrong destination or might drown on the way.
However, obtaining the knowledge of the right metrics is further a concern. It is important for you to know that not all metrics are equally relevant while you are working online. You need to consider only the important and the precise ones in order to not get lost in the pool of information.
Here we have come up with the seven most important e-commerce metrics that are tried and tested and can serve as the foundation of your business analysis.
Top Seven E-commerce Metrics
Customer Acquisition Cost
Customer Acquisition Cost (CAC) or Cost per Acquisition (CPA) is the overall amount you pay to bring a new customer or client. Since many new businesses begin by spending a lot of money on sales and marketing to get new leads, it is also known as the “Startup Killer”. It is vital to control CAC as you might end up spending a lot for only a small percentage of leads.
To measure it you can divide the total cost associated with the acquisition by total new customers during a particular time period.
|Quick Tip – A gradual increase in the measure of this metric is a sign of warning, so a bottom line should be drawn before investing in any kind of paid campaign or marketing strategy.|
You cannot have buyers if you do not have traffic to your site. There are many ways in which a business can market its product. You need to track the number of impressions and the reach of your marketed product to drive the followers or the subscribers to your site.
It is critical to keep track of people that are coming to your site as it carries a number of indicators that can help you increase the traffic. You will come to know the source of traction, will be able to pinpoint the demography, and understand the marketing channel that is working best for your product so that you can plan the strategy accordingly.
“Website without visitors is like a ship lost in the horizon.”
– Dr. Christopher Dayagdag
It is very important for online brands to determine the conversion rate as not all visitors come for purchase. There are many sites that experience high traffic but low sales. So, only driving traffic is not enough, you also need to persuade your visitors to place the order. You need to make sure that all the activities from small to big are just right. From the display of the product to purchase, every step is an opportunity for you to engage the customer and encourage them to purchase.
To measure the conversion rate of your site, you can divide the total number of customers by the total unique visitors, multiplied by 100.
Conversion Rate Optimization (CRO) is further a process for the improvement of conversion rate, which is done by determining the page views, visitors’ behavior on your website and checking the sales funnel.
|Quick Tip – Check if the visitors are able to navigate their way around your site, use buttons for call-to-action and where exactly are they dropping off to buy.|
It is the rate at which customers abandon the cart after the selection of their product. In other words, it is the total number of sales that you are losing. Therefore, it is critical to track them independently to determine whether the checkout procedure is the basis of the problem or whether something else is at fault.
Intuitive cart management includes persistent pages, no hidden fees, urgency messaging, estimated delivery date, and enough payment options, which you must check in order to reduce abandonment rates.
Our metrics are incomplete without this, as all our efforts work to increase the total sales of the company. All your efforts go vain if, after all the hardcore work, you are not able to make your sales.
When it comes to total sales, it’s important to know what factors impact your figures and why. This contains the performance of each of your sales channels as well as the trends of your sales over time.
|Quick Tip – You can split the data of your entire month and check day-to-day sales in order to understand which day you made the most of it and why? Check the trend and build a strategy to increase the sales likewise.|
Average Order Value
When your consumers check out, they pay for the products in their basket. AOV is typically the average price that customers spend on a single order. It’s a crucial metric to understand when it comes to determining marketing performance and should be tracked over time in order to see how it changes.
To determine the AOV, you need to divide the total sales by the total orders completed over that period.
You can increase your AOV by performing the loyalty programs, selling the add-ons, or displaying questions related to the fundamental business model, etc.
Customer Retention Rate
The percentage of repeat customers (those who have placed orders more than once) among all your customers is known as the customer retention rate.
Repeat customers are the life of any e-commerce. In case you are losing your customers more rapidly, you must understand that something is wrong, either with your product or customer service. Look for the reason and a solution because keeping the old customers happy and engaged is less expensive than gaining the new ones.
|Quick Tip – Repeated customers play a role of word-of-mouth that promotes your business around without costing a penny.|
Knowing the e-commerce metrics stated above can help you determine your flaws, find areas where your plans and tactics may be fine-tuned and form a strategy to boost your store’s performance. Remember, precision and consistency matter a lot so take the help of the latest analytical tools and make it a habit to review them on a frequent basis.
How Can ANS Commerce Be Your Partner?
It is hard to track all the e-commerce metrics and study analytics while performing the core function of your business. ANS Commerce helps businesses take the stress off their shoulders with high-class services such as Brandstore, Performance Marketing, Marketplace Management, Warehouse & Fulfilment as well as e-commerce consultation. We handle everything from your product reach to conversion rate and leverage customer retention with positive reviews and ratings. So request for DEMO and enhance your presence online to accelerate your business growth now!