Do not get lost in all the information. To stay in control of your online business, you must be familiar with these seven e-commerce metrics.
Ecommerce store owners have access to an endless amount of data.
The daily, weekly, and monthly sales. The average price of all items bought. Cart abandonment. Buy-to-detail rates. Funnel dropouts – the list goes on.
You don’t want your attention to wander off into the maze of information.
These seven e-commerce metrics make it easy to track your shop’s success.
1. Sales Conversion Rate
Simply put, your e-commerce conversion rate is the percentage of customers who visit your site or store and make a purchase.
Below formula can be used to compute your conversion rate:
If 1,000 people visited your store and only 10 made a purchase, your weekly conversion rates would be 1%.
You want the highest possible conversion rate.
The truth is, however, that the U.S. average e-commerce conversion rate is lower than you might think. Between 2% and 33%.
However, WordStream suggests that you may do better with Google Shopping Ads.
Now for the big question: What can I do to improve my conversion rate?
This is an enormous topic, but there are a few things that you can do:
2. Website traffic
After optimizing your conversion rate has been tracked, you can now look at increasing your e-commerce store’s traffic.
This is where you can measure website traffic.
Let’s return to the 1% conversion rate of 10 sales for every 1,000 visitors. Let’s say that this rate has been optimized to 5%, or 50 sales per 1,000 visitors.
This means you could infer that if 10,000 people visited your website would double your sales.
Even though this is not a guarantee, it is essential to ensure people know about your online store and page to increase your chances of selling.
You can increase your website traffic by:
3. Email opt-in rate
Email marketing is still a primary tool for e-commerce in this age of social media, especially when it comes to remarketing or generating repeat customers.
Based on over 3.2 billion sessions, Sumo puts the average email opt-in rate at 1.95%.
Similar to website traffic, the thought is to get as many people to your email list as possible, even though they may not necessarily buy your products immediately.
People who sign up to your newsletter are more interested in your brand than the regular website/page visitors. They will receive updates about your products and services, which is different from ordinary website/page visitors. They are more likely to be paying customers in the future.
You can offer something in return for your audience’s email addresses and contact details. This is the best way to get them to sign up for your emails.
You can offer a special deal, such as a coupon or code, to your first subscribers for their next purchase.
According to The Director Marketing Association (DMA), their 2019 Marketer Email Report showed that for every $1 spent on email marketing, a simple return of $42 can be expected.
4. Customer Lifetime Value
The customer lifetime value (CLV) measures how much you make from an average customer during their lifetime.
Your CLV would be $180 if you had six transactions per customer, each worth $30.
You will still need to subtract your acquisition costs from the above number. This brings us to the next point.
It is vital to have a CLV. This will indicate how much you can spend on customers and how long you should keep them.
You can increase your online store’s average order value by increasing loyalty and encouraging repeat customers.
5. Average Order Value
You want your consumers to spend as much as possible in your online shop.
Your average order value is, as the name implies, the average purchase price for each item in your store.
Divide the total sales value by the number of carts to calculate yours.
You can track your average order value to establish benchmarks and determine how to get people to spend more on each purchase.
These are some ways you can increase this metric:
6. Cost of Customer Acquisition
Although it is essential to growing your customer base, it is only half the equation.
Your business may still be operating at a loss if you spend $30 on every customer acquisition but only $25 on average.
This is where Customer Acquisition Cost (CAC), or measuring it, comes in.
Your CAC is a measure of the average cost to gain one customer. This includes everything marketing and sales, as well as the cost of hosting your website and paying your staff.
This will give you an overall number, but you can also calculate the CAC by source (e.g., different traffic channels such as search engines or email lists).
You can lower your CAC by:
7. Shopping Cart Abandonment Rate
This is the percentage of customers who add products to their cart but then leave the store without purchasing.
These are window shoppers who are still weighing their options but aren’t sure if they are ready to buy.
Abandonment of shopping carts is much more common than you might think.
Baymard Institute reports that 69.82% of shoppers abandon carts.
It doesn’t matter if your abandonment rates are roughly the same as this benchmark. It would support if you did all you could to improve them.
Do not let information overload overwhelm your mind.
These seven e-commerce metrics will help you keep your head above the water and to stay on top of your entire business.