When it comes to E-commerce marketing the importance of E-commerce metrics to your online store’s success cannot be overstated. Knowing how your business is performing, and making informed decisions based on data is key to long-term success.
E-commerce is a complex and ever-changing industry. Tracking key e-commerce metrics is essential for ensuring your business is performing well. There are a variety of different metrics to track, depending on the type of e-commerce store you have.
Some common metrics to consider include sales volume, customer acquisition costs, and click-through rate (CTR). By tracking these numbers, you’ll be able to better understand how your website is performing and make necessary changes accordingly.
“What gets measured, gets managed”
– Peter Drucker
The most prosperous E-commerce brands use research to guide and make their business decisions.
Well, data is everything!
Here, we have outlined the key E-commerce metrics you should be tracking and measuring to analyze your performance. Not only this but we also dive into why and how to track these E-commerce metrics. So be sure to read on for an insightful discussion of E-commerce metrics!
Table of Content
- Why Track E-commerce Metrics?
- How To Track E-commerce Metrics Effectively?
- Five Important E-commerce Metrics To Track
- Average Order Value (AVO)
- Sales Conversion Rate
- Website Traffic
- Customer Lifetime Value (CLV)
- Customer Acquisition Cost (CAC)
- Tools To Measure Your E-commerce Performance
- FAQ
- The Final Say
Why Track E-commerce Metrics?
E-commerce metrics are key to understanding how your website is performing. By measuring things like unique visitors, sessions, conversion rates, email subscribers and so on, you can get a clear view of your website’s performance and identify any trends.
This information can help you make changes that improve customer experiences and boost sales. Tracking these numbers over time will help you identify any issues and make necessary adjustments.
These adjustments will assist you to get the necessary understanding of customer behaviour which will help you drive traffic back to your site and improve conversion rates.
Managing a successful online store requires the ability to gather and evaluate E-commerce metrics. Key metric changes might also inform you of circumstances that require rapid response and action.
By tracking E-commerce metrics, you can also improve your understanding of your customer’s shopping experience and identify any potential problems. By understanding your customer’s behaviour, you can make informed decisions about how to improve your E-commerce performance.
How To Track E-commerce Metrics Effectively?
E-commerce success is all about optimization. By tracking and optimizing some key E-commerce metrics, you can ensure that your online store is performing at its best.
By optimizing E-commerce metrics, you can make informed decisions about how to improve your website’s performance. Some of the important E-commerce metrics to track and optimize include sales, conversion rates, customer satisfaction ratings, and traffic source data like Google AdWords spending and organic search results.
It’s also helpful to plot your data over time so you can see how your efforts are affecting results. By doing this, you’ll be able to make informed decisions about how to improve your website’s performance.
In the end, E-commerce analytics is a key component of a successful online marketing strategy.
Five Important E-commerce Metrics To Track
E-commerce success depends on many key metrics, and tracking them can help you optimize your business performance. There are several key E-commerce metrics that you need to track to ensure a successful online business. One of the most important is sales. This tells you how well your products are selling and how successful your E-commerce efforts are. Let’s take a deep dive into such crucial E-commerce metrics that you must track to run your online business successfully.
1. Average Order Value (AVO)
One of the most crucial indicators for online retailers to understand is Average Order Value (AOV), which influences essential business choices including advertising spend, store design, and product pricing.
It is an E-commerce metric that helps to measure the average total of every order placed with the merchant by a customer online over a defined period.
To calculate AOV, you can divide the total revenue by the number of orders placed.
Let’s say that in November, your online store made $41,000 in sales and received a total of 1,000 orders. $41,000 divided by 1,000 equals $41, therefore the monthly AOV for November was $41.
2. Sales Conversion Rate
Sales conversion rates are calculated by dividing the total number of orders or sales by the total number of visits to your store.
Knowing this figure is essential to figuring out how much traffic is needed to achieve your desired sales.
Having said that, you must comprehend conversion rates in greater detail, just as you do with your sales statistics.
For example, your conversion rate for the week would be 1% if 1,000 customers came to your store this week but only 10 of them made a purchase.
3. Website Traffic
After tracking and improving your conversion rate, you may focus on driving additional traffic to your online store. Herein lies the value of website traffic analysis.
Referring to your 1% conversion rate translates to 10 purchases for every 1,000 visits. Let’s assume that after optimization, this rate rose to 5% or 50 purchases for every 1,000 visitors. As a result, your sales would multiply tenfold if 10,000 people visited your website.
You can make smarter decisions about anything from which channels appear to be working to the significance of international shipping to your business once you have a firm understanding of how customers find your store today and where they’re coming from.
4. Customer Lifetime Value (CLV)
This is one of the E-commerce retention metrics. Customer Lifetime Value (CLV) is the total amount of money an online store makes from a single customer over a year, taking into account all of their orders. It is a great indicator for gauging average consumer satisfaction, brand loyalty, and sustainability.
For instance, your CLV would be $320, if a typical customer made eight transactions totalling $40 throughout their lifetime.
High CLV suggests brand loyalty, product-market fit, and recurring income from repeat buyers.
A picture of the company’s long-term financial viability can be obtained from the CLV metric. If you want to see sustainable growth, it is advised that you should analyse and maximise Customer Lifetime Value.
5. Customer Acquisition Cost (CAC)
Your Customer Acquisition Cost (CAC) helps you keep track of everything from marketing and sales expenses to wage costs and website hosting fees, as well as the typical cost of acquiring a single customer.
You can calculate CAC by dividing your sales and marketing expenses by the number of your new customers.
Tracking CAC will help you understand how much you spend to bring in new customers.
In simple words, the overall cost of sales and marketing efforts, as well as any property or equipment, required to persuade a consumer to purchase a good or service can be measured and tracked with the help of the CAC metric leading you to take important business and marketing decisions.
Apart from the above metrics, net profit is also a key indicator of overall success and should be monitored to ensure profitability.
It’s also important to monitor your Amazon rankings and competitor activity. Using Google Analytics to measure how users are navigating through your site, and making changes as needed, is a great way to stay on top of things. Additionally, social media engagement rate, brand mentions, and reviews can provide valuable insights into the success of your E-commerce venture.
In addition to helping you analyze the performance of your store and marketing efforts, these metrics will also help you avoid costly mistakes. By keeping a close eye on these key metrics, you can make informed decisions that will help you reach your business goals.
Tools To Measure Your E-commerce Performance
E-commerce is a rapidly growing industry and a key part of the digital marketing mix for many businesses. To ensure success, it’s important to track key performance indicators (KPIs).
There are a variety of E-commerce analytics tools available that can help you measure a variety of performance metrics.
Some of the most commonly used tools include Google Analytics, Shopify analytics, and Amazon webinar data capture (AWDC). By understanding which metrics are important to you, you can track your progress and make necessary adjustments.
Finally, don’t forget to benchmark your results against industry leaders to see where you stand!
Frequently Asked Questions
Conversion rate is the percentage of visitors who complete the desired action, like buying a product or signing up for an email list. The higher the conversion rate, the more money you make.
Revenue growth measures your sales over time to see how you’re doing and whether there are any changes in trends. If you see a sudden spike in sales, it may mean that you’re doing something right (like increasing sales prices or improving your marketing campaigns). However, if sales are consistently dropping, it may be a sign that you have a problem that needs to be fixed.
Customer lifetime value (LTV) is a calculation of how much money your customers are worth over their lifetime by adding up all of their purchases. This number can help you to understand which products or services are generating the most profit and whether you should keep selling them or transition to new products or services.
By making sure all text is properly optimized for search engines, adding keywords where appropriate, and creating compelling titles and headers, you’re increasing the chances that shoppers will find your store when they google a topic related to shopping or E-commerce.
Furthermore, you can optimize your website for desktop browsers using popular plugins like Yoast SEO or All In One SEOTools.
Additionally, you should make sure that your website’s title tags, meta descriptions, images and other elements are Properly Optimized for better visibility online.
1. Always measure your cart abandonment rate – This tells you how many visitors had chances to add items to their shopping carts but didn’t do so due to some reason. This may include them clicking the ” checkout ” or ” cart ” buttons, leaving your website without adding anything to their cart, or filling out a shipping address but not checking out.
2. Measure the time it takes for a visitor from leaving your site until they make a purchase – This will give you valuable insights about what’s happening on your website during that crucial moment. You could use a tool like customer funnel analytics or Google Analytics to measure this.
3. Keep an eye on your bounce rates and see if there’s anything unusual going on with them; also look into other factors that might be affecting sales like search engine optimization (SEO).
A conversion rate of 10% or more is generally considered a good benchmark for online businesses. A higher engagement rate (meaning, visitors staying on your site for a long time) means that you’re engaging your visitors in a way that keeps them coming back.
Finally, a low conversion rate (meaning, people converting into customers at a lower rate than you’d like) may be due to a poor user experience or a confusing shopping cart process. By measuring and optimizing these key metrics, you can improve your online store’s performance and reach new heights.
The Final Say
Whether you’re a new or established E-commerce business, tracking E-commerce metrics is key to success. By understanding how your website is performing, you can make informed decisions about marketing and growth.
Apart from the above-mentioned metrics, you can also have a keen eye on important data points to monitor such as order volume, sales velocity, and cart abandonment rates. By tracking this information over time, you can get a better understanding of how your website is performing.
Additionally, you can use E-commerce metrics to identify areas where you need to focus your marketing efforts. By understanding key metrics, you can make informed decisions that will help you grow your business even further!
Book a strategy call now with our E-commerce experts today for more profound guidance.
