Do you think of your e-commerce site website as a window into your business? There’s an old adage that says how you do anything is how you do everything.
That applies to your website and your business. If your website provides a great customer experience, your revenue grows. About 86% of customers spend more money when they have a better experience.
What do you need to do to make sure that your e-commerce business is heading in the right direction? You have to track the right e-commerce metrics.
Business owners tend to get too hung up on vanity metrics that don’t mean a lot, like social media likes. You need to look at the ones that have a direct impact on your bottom line.
Read on to learn which metrics are the ones you need to pay attention to.
1. Cart Abandonment Rate
Do you know the percentage of people who put items in their shopping carts but don’t complete the purchase? That’s your cart abandonment rate.
There are many reasons why people abandon carts. Some might be browsing, or they may have found shipping rates to be higher than expected.
How can you close that gap? You want to make sure your purchasing process is simple. Too many steps or too many screens gives people an opportunity to leave without finalizing the purchase.
There are cart abandonment email solutions that send emails to customers to remind them to finish the purchase. This can help lower the cart abandonment rate and get more sales.
2. Sales Conversion Rate
The sales conversion rate is the percentage of people who make a purchase divided by the number of people who visit your site.
This e-commerce metric tells you more about your traffic and site’s performance than most other metrics. A low sales conversion rate indicates that you could be driving the wrong type of traffic to your site.
You might be driving the right traffic to your site, but they’re early in the buying process. You’re better off getting them to opt-in to your email list than trying to sell them.
What’s a good sales conversion rate? Typically, between 2-5%. It depends on your industry.
3. Average Order Value
The average order value tells you how much people spend on your site. If your order average is low, it could be that you have a limited product selection.
You might sell low-priced products with a small profit margin. You’d have to depend on volume to maintain profitability.
One way to increase the average order value is to upsell related products. A product recommendation list on your website can help you increase your average order value.
4. Email Conversion Rate
E-commerce businesses don’t have a lot of control over many marketing channels. You can’t control Facebook’s algorithm, or when Google rolls out core updates.
These changes can have a huge impact on your business.
You can overcome those shifts by having an email list. That’s one thing that you can control. It’s also a great way to nurture leads and sell to them later on.
Your email conversion rate is the percentage of people who sign up to your list divided by the number of site visitors. It’s important to make sure you have a reason for people to sign up to your list.
Having a form that says “sign up for our newsletter” isn’t enticing. A discount code or a product guide is something that people will sign up for.
5. Customer Retention Rate
Do you find that you’re constantly trying to get new customers?
If so, you need to retain the customers you have. That’s the one thing that you can do to improve profits. You need to make sure that you provide a superior customer experience to retain customers.
The entire customer experience, from the first interaction with your brand through the purchase must be outstanding. That’s how you’ll get good reviews, referrals, and customer loyalty.
6. User Behavior
The customer experience of your site determines the success of your business. It can be challenging to measure an experience because it’s a person’s perception.
What you can do is track user behavior. This is one of those new ideas that emerged out of the need to measure perception.
You could use a survey to track visitors, but that can actually take away from the user experience. You can use heatmaps, track engagement, and measure customer frustration.
7. Cost Per Acquisition
Out of all of the e-commerce metrics, this could the most important. How much does it cost to gain a new customer? If your cost per acquisition is too high, you’ll have a much lower chance to be profitable.
How do you calculate your cost per acquisition? Take all of the costs that go into getting customers: marketing, sales, labor, and operational costs. Add them together.
Divide that by the number of customers, and that will give you an average cost to acquire a customer.
You want this number to be a low as possible. If you want to lower this number, look at things like lowering your marketing costs, increase your referrals, and improve your sales conversion rate.
Track E-Commerce Metrics for Growth
You want your e-commerce business to take an upward trajectory. There’s no doubt that you can diagnose issues within your business and address them when you measure the right e-commerce metrics.
The metrics listed here give you valuable insights into the customer experience, website experience, and customer engagement. These metrics have a big impact on your bottom line.
Be sure to visit the Business and Finance section of this site for more valuable insights so you can grow your e-commerce business.