As an eCommerce business owner, one of the most important things you can do to ensure the success of your online store is to track and measure key performance metrics. Metrics for eCommerce provide valuable insights into the health and growth of your business, enabling you to identify areas of improvement, set goals, and make data-driven decisions.
In this beginner's guide, we'll cover 10 essential metrics for eCommerce success. From gross revenue and conversion rate to customer acquisition cost and net promoter score, we'll provide an overview of each metric and explain why it matters for your business.
Whether you're just starting out or looking to improve your existing eCommerce performance, this guide will provide you with the knowledge and tools you need to track and optimise your metrics for success. Let's get started!
What are eCommerce Metrics?
eCommerce metrics are data points that help eCommerce businesses track and measure their online performance. These metrics provide valuable insights into different aspects of an ecommerce business, such as sales, traffic, and customer behavior. By analyzing these metrics, businesses can make data-driven decisions, identify areas for improvement, and optimize their online store for success.
eCommerce metrics can include a wide range of data points, from basic metrics such as website traffic and sales revenue, to more complex metrics such as customer lifetime value and repeat purchase rate. By tracking and analysing these metrics, ecommerce businesses can gain a better understanding of their customers' behavior and preferences, and make changes to their marketing, sales, and customer experience strategies to improve their overall performance.
Key Awareness Metrics
The awareness phase of the Customer Journey correlates with the marketing efforts for your business. This is the stage where the potential customer is first learning about your company, brand and products/service
As this is your first interaction with potential customers, it’s important that you focus your efforts on the right customers. Spending time and money on people who are not your ideal customer, will be expensive, ineffective and a waste of your time.
Reach is a measure of all the customers/potential customers who encounter your eCommerce brand in any way. It includes your total email database, all of your social media followers, those who have subscribed to your blog, your organic reach and of course your existing customers.
The more ideal customers you can reach, the more conversions you will eventually have.
2. Click-Through Rate
The percent click-through rate is the percentage of people who see any of your online content (ads, social posts, blog posts, google impressions) and click through to visit your site.
If your click-through rate is poor you’re either targeting the wrong customer or your content is not appealing to them.
3. Traffic Sources
Tracking your Traffic sources will help you to see where your marketing efforts are having the greatest effect on driving traffic to your site.
It’s important to stop spending cash on sources that don’t work well or don’t work at all, and invest that money in sources that do work.
4. Bounce Rate
Bounce rate is the percentage of users who landed on one of your pages then left immediately without taking an action such as scrolling, clicking buttons etc and without visiting another page.
A high Bounce Rate lets you know that your site (or specific pages on your site) has issues with content, user experience, page layout or copywriting. Improving the bounce rate will increase your conversions.
5. Top Pages
Knowing what pages receive the most traffic is hugely important because it gives you real-world data showing what your audience responds to. If you experiment with different types of content, this is where you can begin to analyse what’s working, and produce more of the material your users like.
Key Conversion Metrics
Conversion Metrics tell you how successful your store is once visitors have arrived and browsed your product offering.
Marketing and awareness bring potential customers to your store, conversion metrics help you determine how well they convert to customers once they have arrived. These eCommerce growth metrics are what will help you to take your business to the next level.
6. Sales Conversion Rate
Your conversion rate, quite simply, is the percentage of users who take an action. Normally this would be a purchase but it could also be a subscription, downloading free content or simply making an inquiry.
Understanding this number is critical to determining how much traffic is required to generate your target sales. You should also look at this rate by traffic source to compare the differences.
7. Average Order Value
Your AOV is the average price your customers are paying for the items when they check out. It can be measured over time, so you can determine how it evolves.
Your AOV can be increased by adding upsells, loyalty programs, or product offers.
8. Customer Acquisition Cost
Customer Acquisition Cost (CAC) is the total cost of sales and marketing efforts that are needed to acquire a customer
In order to make money, your customer acquisition cost needs to be less than your customer lifetime value. Ideally, your acquisition cost should be less than your average order value so you make money off every new customer.
9. Organic Acquisition Traffic
It’s important to measure how many of your visitors reach the site organically, which is commonly available in all analytics platforms. Looking at your organic search traffic gives you a clear overview of how well your website is performing without advertising or other campaigns.
Analysing your organic traffic (google search console is great for this) can help you identify and correct weaknesses in your website and your digital strategy.
You can improve your organic traffic by ensuring that your on-site/technical SEO remains true to best practices (meta data, responsive site, content etc.) and that your off-page SEO performs well (link building, social etc).
10. Shopping Basket & Checkout Abandonment Rate
Shopping basket abandonment is a measure of how many people add something to their basket but leave your site without making a purchase. This measure is important to see if there are weaknesses in the site or basket process before they get to the checkout process.
You can easily track abandonment by setting up a funnel in Google Analytics.
You can reduce this rate by simplifying your checkout process and introducing basket abandonment emails.
The checkout abandonment is a measure of how many people leave your site without making a purchase but only after they begin the checkout process.
It’s important to measure them separately to see if the checkout process is the root cause of abandonments or if the problem is something else entirely.
Loyalty Metrics/Retention Metrics
What are eCommerce loyalty metrics? Essentially they measure what percentage of your existing customers are continuing to do business with you over a given period of time.
They are intended to help you understand how well you remain connected with your customers after they have made a purchase. The goal here is to encourage customers to order again and again, to make them loyal customers.
11. Email opt-ins
Email marketing is one of the most powerful tools eCommerce stores have to drive repeat business.
Ideally, you want to get as many people on your email list as possible, even if they don’t buy your products. So it’s important to track your total opt-ins and your opt-ins by source.
You can easily track these metrics by setting up goals in your Google Analytics.
12. Customer lifetime value
CLV is the total worth to a business of a customer over the whole period of their relationship. It’s an important eCommerce metric as it costs less to keep an existing customer than it does to acquire new ones, so increasing the value of your existing customers is a great way to drive growth.
There are lots of ways to increase your customer lifetime value, but they boil down to increasing your average order value and building long-term relationships with your customers so they become repeat buyers.
Tracking Your eCommerce Website Metrics
eCommerce key metrics allow you to track progress towards your business goals. They let you see the points in your customer journey where you are performing well and where you need to make improvements.
You need to test different strategies to see how you can improve your metrics for eCommerce. Start small and as you see something that is effective, focus more time/money on that strategy.
Now, it’s over to you. Take what I’ve shared here and incorporate it into your eCommerce business. If you have any questions or would like some help tracking your metrics then get in touch and I’d be happy to help.
Good luck, and remember to take care of those customers!