There are some metrics that an e-commerce merchant must monitor. Which metrics are in question?
Gain rich insights with metrics for e-commerce success. Understand your company’s performance and customer behavior trends to unlock growth prospects. Focus on the right measurements as the foundation for your sales and marketing KPIs.
In this article, we’ll examine the ten e-commerce indicators that your company ought to monitor and show you how to use them to develop useful KPIs.
Why are KPIs and metrics different?
In the area of sales and marketing, the terms “metric” and “KPI” are sometimes used interchangeably. They don’t necessarily refer to the same item, though.
An e-commerce statistic is a means to gauge how well a specific area of your business is performing. For instance, keeping track of the number of consumers that return to your online business is a useful method to gauge brand trust and customer happiness.
But not all metrics are reliable indicators of how well your company is doing. ‘Vanity metrics’ is a common term for these. For instance, a company’s view of follower engagement may be incorrect if they only monitor the amount of “likes” they receive on social media, rather than comments or click-through rates.
Key Performance Indicators (KPIs), in contrast, are a collection of measures that are used to assess whether or not your company is meeting its growth objectives. KPIs, as opposed to measurements, should illustrate your sales and marketing strategy.
In conclusion, e-commerce metrics are any data sources that need to be analyzed and measured over time. KPIs are arbitrary objectives based on indicators that are specially designed for your e-commerce firm.
10 crucial e-commerce criteria for a prosperous online store
Although your company can monitor a wide range of e-commerce analytics, doing so can rapidly become overwhelming. It becomes white noise when you have too much data to adequately analyze. But specific metrics offer a terrific way to measure the success of your online company. These ten e-commerce KPIs that we’ve selected will enable you to assess the success of your sales and marketing initiatives.
One of the easiest e-commerce KPIs to monitor is conversion. Simply said, your conversion rate is calculated by dividing the total number of transactions by the number of site visits you receive.
Therefore, if you get 5000 site visits and 400 of them result in a purchase, your sales conversion rate would be 8%.
One of the most important measures of whether your services are appealing to your target demographic is your ability to turn onlookers into buyers. Conversion can also be used to measure the effectiveness of particular marketing initiatives, such as SEO or influencer marketing campaigns.
Calculating conversion rate
It’s simple to calculate your e-commerce conversion rate, as we showed above. This does not, however, indicate whether there is a particular stage of the purchasing process at which potential clients are leaving the sales funnel. This is why it makes sense to adopt a funnel-based perspective of conversion and obtain better insight.
The various touchpoints that make up an e-commerce purchasing trip include visiting your website, looking through product pages, reading FAQs, adding items to the shopping basket, and finally completing a purchase. By being aware of these two factors, you may direct your conversion rate optimization efforts where and when you’re experiencing a significant decline in clients.
For instance, this calls for additional study if your conversion rate suddenly declines after website visitors go through your FAQs. For instance, you might need to change your rigorous return policy for online purchases if other stores don’t. This will help you stay relevant to potential customers.
Cost per new customer (CAC)
While it would be ideal if all of a business’s customer acquisition efforts were organic, this is rarely the case. Brands must spend more on client acquisition as e-commerce becomes more competitive.
However, if the expense of attracting leads only generates a small number of conversions, it’s a surefire way to go out of business. This is due to the fact that selling to existing consumers can be up to 7 times more expensive than buying new ones.
How to calculate the cost of acquiring a customer?
Customer acquisition cost is calculated by dividing the total number of new customers acquired by the amount of your overall sales and marketing expenses for a given time period.
AOV, or average order value
The typical transaction that occurs on your e-commerce site is referred to as your average order value. As customer loyalty increases and higher customer lifetime value results, merchants should try to gradually raise their AOV.
A particularly advantageous e-commerce indicator is average order value since it may be easily influenced without significant marketing expenditure. For instance, online sales, upselling and cross-selling, and customer loyalty programs are all excellent ways to raise AOV. This is significantly more cost-effective than trying to bring in new customers or get current ones to buy more frequently.
Calculating average order value
The average order value (AOV) is determined by dividing your overall revenue over a certain time period by the total number of orders you’ve received.
Social media participation
Without a physical location, social media is a crucial marketing medium for direct-to-consumer firms. You should keep a careful check on the effectiveness of your social media material because it is a significant source of website traffic through referrals.
How to gauge engagement on social media
Because social media success can’t be quantified by a single indicator, it can be challenging for marketers to gauge. Instead, you must examine a range of e-commerce data to ascertain whether your content is connecting with readers.
As we previously stated, social media metrics like “likes” are largely fictitious as they don’t show that a viewer has taken any further action. These KPIs offer considerably more conclusive evidence of the efficacy of your marketing initiatives:
Rates of click-through
This indicator is excellent for figuring out whether or not your followers are responding to your CTAs. The ratio of the number of times an ad or article is viewed to the number of times it is clicked on determines your CTR. Your content’s effectiveness may be determined by looking at your CTR, which should be high.
Referral traffic describes visitors who arrive at your e-commerce site via another website, such as a social networking platform. Additionally, Google Analytics can break this down for you into other social media platforms so you can see which is referring the most customers.
A social conversion occurs when a customer makes a purchase while visiting one of your social media platforms and your website at the same time. It proves that your social media platforms are essential in bringing qualified leads to your website.
Let DigAptics aid you in monitoring your success.
Looking at all these indicators and using them to get useful information for your website might be overwhelming. DigAptics, though, can be useful to get more out of Analytics. We are a full-service digital marketing firm with years of experience using Analytics to track and enhance the websites of our clients.
When you work with us as a partner, we’ll set up tracking for you. We offer monthly reports so that you may set up your goals and events, assess your site speed, and view your data analysis. Our group will offer suggestions to assist you in maximizing the traffic to your website.