There is a popular saying – “If you can’t measure it, you can’t improve it.” This may seem like a worn-out cliché, but there is some truth to it, particularly in the E-commerce sector. An online store needs constant fine-tuning to stay relevant and attract customers throughout the year. And the best way to do this is by measuring its performance.
Now, there are certain metrics that you need to keep an eye on. Tracking them will offer you rich information about what’s working and what’s missing the mark in your campaigns. The question is: Which metrics? In this post, we will learn which KPIs you need to measure for your E-commerce store and how they are useful.
Why Should You Measure Your Online Sales?
Let’s put it this way. Following your gut and intuition might not work all the time. Unless you measure your online sales, you will not be able to improve those campaigns that aren’t bearing fruits. Besides this, there are a few other reasons why you need to measure your online sales –
Set Accurate And Achievable Goals
You will gain valuable insights into your business’s performance, customer behavior, and market trends by measuring your online sales. You will get answers to key questions like “How is the improvement in overall sales,” “Which products were purchased the most and least,” “What are the different opportunities available to boost the sales of your store” etc. With this knowledge, you can set specific and measurable targets and align them with your overall marketing strategy.
Make Quick Business Decisions
A simple look at the dashboard highlighting different E-commerce metrics will help you identify trends, spot sudden changes in demand, and respond promptly to opportunities or challenges. For instance, you can quickly identify which products are driving the most revenue in a particular campaign and use this knowledge to prioritize and allocate resources effectively and quickly. You can also adjust product pricing or promotional tactics to maximize revenue and profitability.
When you have data to back your success story, investors and financiers are going to be convinced about their investments. In other words, by measuring your online sales, you can provide investors with a clear picture of your market traction, customer demand, revenue generation capabilities, and growth prospects, which will help them make a favorable decision.
KPIs To Measure The Success Of Your Online Sales Event
Running a successful campaign requires careful planning, execution, and evaluation. Key Performance Indicators (KPIs) play a crucial role in measuring your sales campaign’s success and determining the effectiveness of your marketing efforts. Monitoring the below metrics will help you optimize current campaigns and guide your future marketing strategies – helping you drive more sales.
E-commerce Metrics For Sales Measurement
Tracking metrics related to sales is crucial because they provide valuable insights into your revenue generation, customer behavior, and the effectiveness of your sales strategies. Here are some essential E-commerce metrics for sales measurement:
1. Sales Generated
It is the total sales generated within a specific period or a particular campaign. This figure provides a clear understanding of your revenue and the success of your campaign. It can also highlight seasonal trends — and help you plan your inventory for high-traffic periods.
2. Average Order Value (AOV)
It is the average monetary value of every order placed on your website. Tracking this will help identify customer spending habits, price your products correctly, and optimize your upselling and cross-selling strategies. To calculate AOV, simply divide the total revenue of your online store by the number of orders placed. For instance, if the total revenue of your store for the month of June was ₹2,50,000 and the total number of orders placed was 250, your AOV is:
AOV = 2,50,000/ 250 = ₹1000
3. Product Affinity
It shows the likelihood of certain products being purchased together. Tracking this will help create more targeted product bundles and offer personalized recommendations.
4. Day Part Monitoring
It shows the specific timeframes when your website attracts the maximum number of visitors. Evaluating this metric will help you time your product launches and promotions to drive maximum conversions.
5. Website Traffic From The Campaign (New Vs Returning)
Website traffic is the number of people visiting your website for a particular duration. It tells you how many of these visitors are new and returning. More new traffic means your marketing strategy is working well, while more returning users means your customer retention efforts are producing results.
7. Shopping Cart Abandonment Rate
It is the percentage of online shoppers who add products to a shopping cart but then abandon it before completing the checkout process. Tracking this metric will help you identify potential pain points in your checkout process. Here’s how you can calculate cart abandonment rate:
Cart Abandonment Rate = (1 – Completed Orders/ Shopping Carts Created)* 100
- Completed Orders are the number of orders that are paid.
- Shopping carts created are the total number of shopping carts created, irrespective of whether they were completed or abandoned.
So if the total number of shopping carts created in 2023 was 50,000 and the total number of completed orders was 10,000, the cart abandonment rate would be:
Cart Abandonment Rate = (1-10,000/50,000)*100 = 80%
High cart abandonment rate is direct revenue loss. You can take many proactive measures to convert them into paying customers. One of the best ways to make them complete the purchase is by sending abandoned cart emails, here is our complete guide on abandoned cart emails with free templates.
8. Bounce Rate
It is the percentage of visitors who leave your website after visiting a single page. A high bounce rate indicates issues with your website’s navigation or content.
KPIs To Measure Marketing Campaign Success
Marketing campaigns ensure that your brand and products reach the right audience. To gauge the success and effectiveness of these campaigns, it’s important to track the following KPIs:
1. PPC Campaign Metrics
Pay-Per-Click (PPC) campaigns are a popular form of online advertising, where you pay an amount every time an ad is clicked. Here are the essential PPC campaign metrics to track:
It indicates the number of visitors who click on your PPC ad and land on your website. It gives you an idea about your campaign’s reach and effectiveness in driving potential customers to your site.
It is the percentage of people who click on your ad after seeing it. A high CTR signifies that your ad copy and targeting are appealing and relevant to your audience.
It stands for Customer Acquisition Cost and it tells you how much you have to spend to acquire a new customer. By measuring this metric, you will know the ROI of your marketing and advertising efforts.
2. Email Marketing Campaign Metrics
To evaluate the success of your email marketing campaigns and make data-driven decisions for improvement, it’s essential to track key performance indicators (KPIs). Here are the crucial ones to track:
Email Open Rate
It is the percentage of subscribers who open an email campaign compared to the total number of emails sent. It helps gauge how engaging and relevant the email content is to the subscribers.
It is the percentage of email recipients who click on one or more links within the email compared to the total number of emails sent. It measures how successful your email campaign is in driving subscribers to take the desired action, such as visiting a website or making a purchase.
It is the increase in the number of subscribers over a specific period. It shows the effectiveness of your email list-building and email marketing efforts. A steady and healthy subscriber growth rate is important for expanding your reach.
3. Social Media And Affiliate Marketing Metrics
The following metrics serve as quantitative indicators of how well your social media and affiliate marketing efforts are performing. They offer a clear picture of the impact of these campaigns on your brand visibility, audience engagement, lead generation, and conversion.
It indicates how many followers your brand has across different social media platforms like Instagram, Facebook, LinkedIn, etc. It indicates how large or small your online community is and shows whether or not people are engaging with your brand and content.
Number And Quality Of Product Reviews
Product reviews offer valuable feedback and social proof to your potential customers. It can positively influence their purchasing decisions, especially if the number of reviews is high. The quality of reviews is also important as it holds more weight in building trust with potential buyers.
It typically includes the number of clicks, conversions, sales, or revenue generated via affiliate links or partnerships. Measuring these metrics can help identify top-performing affiliate partners and optimize the non-performing campaigns.
Other KPIs You Should Track
Besides the above metrics, there are a few more KPIs that you must track to gauge your online sales success. Here are they –
It is the difference between the total revenue generated from sales and the cost of producing/acquiring and selling products. Monitoring this metric will tell you whether your E-commerce business is profitable or not.
Customer Lifetime Value (CLV)
It gives you the total value a customer will bring to your online store over the entire duration of their association with your brand. Measuring CLV is important because it helps in predicting your future revenue and long-term business success. Here is our in depth article on Customer Lifetime Value and its importance.
Customer Retention Rate (CRR)
It is the percentage of customers you retain over a specific period. By measuring CRR you will know whether your customer base is satisfied and loyal. This is important for sustained business growth.
Average Stock Sold Per Day
It is the rate at which your inventory is moving off the shelves. Using this data, you can identify sales trends, peak seasons, and slow periods. This will help you better manage your inventory and meet customer demands without excess stock.
Net Promoter Score
It is a customer satisfaction metric that gauges the loyalty and advocacy of your customers towards your business. NPS is valuable because it provides insights into your customers’ sentiments and helps you identify areas for improvement.
Use Analytics Tools To Track Sales Success
Now that you know what to measure, it’s time to answer the ‘how’ part. Yes, there are tools like Google Analytics that can help you track your website performance, you need a robust analytics platform to measure your online sales success.
Enter Kartapult, a one-stop solution to measure, analyze and optimize your online marketing efforts. It even offers a real-time analytics dashboard that tracks and highlights metrics from different ad platforms, so that you can make more informed decisions.
To know more about Kartapult, contact us now.
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