8 Most Important E-commerce Metrics You Should Measure

Metrics: Are metrics actually important for business decision-making? Yes, to take your eCommerce business to the next level you must realize the importance of information and track all the metrics that are relevant to your business.

The most successful and best eCommerce entrepreneurs make decisions based on the metrics, and they are so obsessed with these metrics because these metrics are the key to their store success.

But before we jump onto these e-commerce metrics let’s first read about what is Metric?

What is a Metric?

Metrics is a quantifiable measure that is used to assess, compare and track the website performance. These metrics will help you to get important and accurate data related to your e-commerce storeand based on these numbers you can determine whether your efforts are moving towards business failure or success.

Below are some of the most important and top eCommerce metrics that every store owner must track and optimize as they will create a huge impact on business.

• 1. Shopping cart abandonment rate
• 2. Conversion rates
• 3. Customer Lifetime Value (CLV)
• 4. Customer retention rates
• 5. Revenue per visitor
• 6. Average order volume
• 7. Customer Acquisition Cost
• 8. Email click-through-rate

Most Important Ecommerce Metrics that You Should Track

1. Shopping Cart Abandonment Rate

There are times when customers add the products to the cart but not complete the purchase. Abandonment rate shows the store owners the percentage of online visitors who actually added the products to the cart but failed to make a purchase compared to the actual customers who placed an order.

Based on a number of various ecommerce studiesthe average shopping cart abandonment rate is 68%. So if your rate is higher than the normal cart abandonment rate then the reasons behind them can be a complex or lengthy checkout process, extra shipping cost, concern about payment security, required sign up, etc.

So if your cart abandonment rate is higher compare to the normal rate then you can go through some of the best ways to reduce cart abandonment rates listed below:

• Send emails to your customers and notify them about their abandoned carts
• Provide Free shipping because 93% of online customers purchase more products with free shipping
• Provide “Checkout as a Guest” option for quick and faster checkout
• Provide a better shopping experience to your customers

2. Conversion Rates

Conversion rates are a percentage of all the online visitors who went through your sales and campaign strategies and got converted to sales. There might be a question of what is a good conversion rate then let us share with you that it varies based on different industries. The average conversion rate for eCommerce sites is 2.86% globally.

Source: Invesp

The main motto is to understand the average eCommerce conversion rate and benchmark your store performance based on it. Once you come to know that whether you are meeting this average rate or not, try to improve conversion rates. Check out below the eCommerce conversion rate by industry.

Now you might have a question that “What are the best ways to increase eCommerce conversion rates?” So here are some of the ways that can help you to boost your eCommerce conversion rates.

• Test your eCommerce checkout process and if it has some drawbacks like lengthy checkout process, no social media logins, etc. then try to solve these with extensions like Magento 2 Checkout Success Pageand create an attractive checkout success page, etc.
• Offer free shipping
• Provide Social Media logins like Login via Instagram, Facebook, etc.

3. Customer Lifetime Value (CLV)

Customer Lifetime Value is the amount your customer pays to your brand throughout their entire future relationship with your brand. You can consider it as a monetary value of the customer relationship to the brand.

Your average customer lifetime value will be the length of time your customer relationship lasts before they have been inactive on your website or stop purchasing from your brand permanently.

Below are some quick tips to increase the customer lifetime value:

• Encourage your customers to spend more by providing free shipping on fixed purchases, free giftson a minimum X amount of order, provide discounts, etc.
• Keep your customers coming back for future purchases and for that, you can use newsletters for email marketing, provide great packaging, loyalty programs, etc.
• Follow up with your customers with a “Thank You” message after purchase.

4. Customer Retention Rates

Customer Retention Rate is the percentage of customers a company retains over a period of time. Returning customers are more profitable than new customers. Also, the retention impacts the average customer lifetime value and therefore the more profitable customer becomes.

Next, you need to collect have below data to calculate the customer retention rate:

S = No. of existing customers at the start of the time period

E = No. of total customers at the end of the time period

N = No. new customers added within the time period

When you have all the above details, you can calculate the retention rate using below formula:

Customer Retention Rate formula: [(E-N)/S] X 100

Check these ways to reduce customer retention rate:

• Adjust the pricing for your returning customers
• Implement up-selling and cross-selling strategies
• Provide customer loyalty programs
• Offer a recurring subscription
• Deliver what you promised
• Conduct surveys and request customers feedback

Average Customer Retention Rate by Industry

5. Revenue Per Visitor

Revenue per visitor metrics helps to measure the average revenue a brand can obtain from a single website visitor. It will be calculated over a certain period.

When you get this actual value, you can understand your conversion rates and other operations at your store. Also, you can compare your revenue per visitor to the industry average and if it is low then you can work on it by improving ways to increase this rate. And if the revenue per visitor rate is higher than the average value then also you can analyze it and work on more marketing skills so that you can attract more customers

Ways to increase your revenue per visitor (RPV)

• Use marketing and email campaigns to attract and engage more customers
• Offers discounts and coupon code to your potential and regular customers
• Use personalization in your marketing campaigns such as try to sell products to your customers based on their purchase history.

6. Average Order Volume

Average order volume (AOV) tracks the average amount spent each time a customer places an order to your eCommerce store. You can use the below formula to calculate the average order value:

Find below some ways to increase average order volume

• Try to market the recommended products.
• Set free shipping on some fixed amount of purchase. This will encourage them to buy more to reach the threshold and enjoy the free shipping.
• Add volume discounts by providing percentage discounts on some fixed purchased amount
• Free gifts or returns for expensive products
• Offer great deals, seasonal promotions, and holiday sales to increase the average order volume.

7. Customer Acquisition Cost

Customer Acquisition Cost can be calculated by dividing the overall cost spent on marketing expenses, or you can say for acquiring customers by the number of customers acquired during the time money was spent.

Here are some of the best ways to reduce customer acquisition costs

• Focus on the favorite marketing channels of your prospects’
• Create Tripwires in your eCommerce store to quickly convert the guest visitors into potential buyers.
• Perform experiments to improve conversions
• Use CRM software to nurture leads
• Improve Conversion Rates
• Improve Customer Retention Rates

Average Customer Acquisition Cost by Industry

Source :- webflow.com

8. Email Click-Through-Rate

Email click-through rate shows the engagement of your emails that you sent to your customers as an email campaign. It basically indicates the number of customers engaged or at least clicked any one of your email links in your marketing campaign. And it is one of the best metrics to know that your efforts are worth the investment. But yes, these numbers and an expected result may vary as per the industry your business belongs to. The below list includes the email benchmarks for all industries.

Source : Campaign Monitor

The main goal for your email campaigns should be for customers to click on your Call to Action (CTAs). The higher the engagement in your emails, the greater your Return of investment will be for your email campaigns.

Let us share with you some of the best ways to increase your click-through rate.

• Make your emails look consistent with your brand
• Use a focused layout that can naturally move your readers towards your CTAs
• Try to create a pixel-perfect experience for your customers by keeping default preview widths (about 600 PX)
• Include relevant images with Alt texts and links
• Try to use CTA buttons as humans are hardwired to naturally click on buttons
• Offer just one CTA and also try placing it on the right
• Make your email mobile responsive as mobile email open rates are growing nowadays.

Conclusion

To grow your online store presence and to boost sales you have to be very careful about tracking all the data and information from the very initial stage of your eCommerce store. Otherwise, you might miss the important point that needs to be taken care of to improve your online store at the time of decision-making.

We hope that our article helps you to learn about the fundamental eCommerce metrics that might help you. If you still have any queries about eCommerce metrics or any other Magento eCommerce inquiry you can contact MageAnts to get a consultation and get your queries solved from our expert. We are always looking for challenging projects and our experienced team always tries to provide the best possible solution to customers. Get in touch with us for more!