You may not know precisely how many people came to your restaurant after seeing an ad in the community newspaper, but you do know how many people came to your site by clicking on a banner ad.
In comparison to other marketing channels, digital marketing offers far more visibility to behaviors and actions.
Measurements and terms such as Google Analytics, visitors, pages per visit, bounce rate, time on site, and conversion rate are increasingly common.
There are a variety of metrics that e-commerce companies should track and analyze to understand the performance of their business.
Some of the most important metrics for e-commerce companies include:
- Sales Revenue: This is the total amount of revenue generated by the e-commerce company through the sale of its products or services. It is the most basic and important metric that every e-commerce business should track.
- Conversion Rate: This is the percentage of website visitors who complete a desired action, such as making a purchase or filling out a form. A high conversion rate indicates that a website is effectively converting its traffic into paying customers.
- Average Order Value (AOV): This is the average amount spent by a customer on a single order. Tracking AOV can help e-commerce businesses understand the purchasing habits of their customers and adjust their pricing and promotions accordingly.
- Customer Lifetime Value (CLV): This is the total amount of money a customer is expected to spend on a company's products or services over the course of their lifetime. CLV is an important metric for e-commerce companies because it can help them understand the value of acquiring and retaining customers.
- Customer Acquisition Cost (CAC): This is the cost of acquiring a new customer. It includes all marketing and advertising expenses associated with attracting new customers. Tracking CAC can help e-commerce companies optimize their marketing spend and improve their return on investment.
- Cart Abandonment Rate: This is the percentage of customers who add items to their cart but do not complete the checkout process. Tracking cart abandonment rate can help e-commerce companies identify and address issues that may be causing customers to abandon their carts.
- Return on Ad Spend (ROAS): This is the revenue generated for every dollar spent on advertising. Tracking ROAS can help e-commerce companies optimize their advertising spend and improve their return on investment.
- Website Traffic: This is the number of visitors to a website. Tracking website traffic can help e-commerce companies understand the effectiveness of their marketing campaigns and identify opportunities for improvement.
- Customer Satisfaction: This is a measure of how satisfied customers are with their overall experience with an e-commerce company. Tracking customer satisfaction can help e-commerce companies identify areas where they can improve their customer experience and build customer loyalty.
The list of ecommerce metrics is long and for good reason.
Google Analytics, social media, your online store, product pages, homepages, checkout and shopping carts — all of these are rich data sources that capture quantifiable data, ripe for your interpretation and trend measurement over time.
How Often Should I Check My Ecommerce Metrics?
As we move into our list of recommended ecommerce metrics, you might be wondering how often you should check your metrics? It Depends
Some metrics like, website traffic, social media engagement and impressions, should be checked on a weekly basis to ensure that the state of your business is healthy.
Your weekly metrics, bi-weekly metrics are less influenced by any variations that may occur within a given week like Average Order Value (AOV), cost per acquisition (CPA) and shopping cart abandonment.
Monthly metrics require a longer data window due to traffic patterns or, more likely, your own marketing patterns. These monthly metrics might include email open rate, multichannel engagement, reach and add-to-cart abandonment, as well as other micro-conversions.
If your weekly and bi-weekly metrics have proven that your business is healthy and surviving, these quarterly metrics will be the long-tail activities that demonstrate that your business is flourishing and growing. These might include email click-through, customer lifetime value and subscription rate.
The following are likely to be the most important metrics for you to run a successful ecommerce store:
- Email click-through-rate.
- Cost per acquisition (CPA).
- Organic acquisition traffic.
- Social media engagement.
- Micro to macro conversion rates.
- Average order value (AOV).
- Sales conversion rates.
- Customer Retention rate.
- Customer lifetime value (CLV).
- Repeat customer rate.
- Refund and return rate.
- Ecommerce churn rate.
- Net promoter score (NPS).
- Subscription rate.
- Program participation rate.
Familiarity with the ecommerce metrics mentioned above will help you identify how well you’re performing those activities and highlight those areas in which you can fine-tune your strategies and tactics to improve your store’s performance and bottom line.
Overall, tracking and analyzing these metrics can help e-commerce companies make data-driven decisions that improve their performance and drive growth.