Peter Ducker rightly says it- “You can’t manage, what you can’t measure” And measuring your website’s performance by the key performance indicators is much essential to achieve your business goals.
Keeping track of the key eCommerce metrics is the map to your destination. These metrics not only give you numbers but help you understand your customers better.
You get information in return for your data-rich and informative webpages.
We have come across many businesses who run their websites but fail to go back and look at the metrics. While it’s not a huge task, Google Analytics has made lives easier.
Why should merchants care about eCommerce Metrics?
If you want to cater the best to your customers, it is a crucial step to keep an eye on the critical eCommerce metrics. Hence, to get where you want to be, you need to know where you are. ECommerce metrics play the role of an eye-opener and help you realize where your marketing efforts are paying off.
Let’s take an example; Rob runs a restaurant and is doing well with his marketing efforts. He does an equal amount of marketing, both physically and digitally. This is also working quite well for him with a fair amount of customer base.
He doesn’t feel the need to check the eCommerce metrics as somehow he gets results. But the point here is, many merchants are in the same pool as Rob.
In Rob’s case, he can’t measure the number of customers he was able to attract through the ad that he posted in the Sunday newspaper or a special recipe article that made it into a popular food magazine last month. Or if all these customers arrived from social media posts and food reviews.
Managing the business this way is like running blindfolded; well, it’s your luck if you maintain the track. Hence, eCommerce metrics answer all your questions and give you inputs that help in decision making process.
Let’s have a look at top key eCommerce metrics:
Higher the website traffic, higher the customer visits.
Website traffic is the number of web users who visit your website, also known as ‘sessions.’
Website traffic = Number of Visitors to the Website
Why is Website traffic significant?
Attracting the right traffic is of an utmost priority and requires constant efforts too. Once you have a fair amount of website traffic, you can also work on increasing the conversion rate.
Some of the common ways to bring visitors to your website and retain them are promotional activities on social media, search engine optimization and blog subscriptions along with attractive webpages.
Referral traffic is the visits that are directed from other websites without specifically searching for your site/product on Google. It carries a great deal of importance of its own since visitors/customers that visit your site through referral traffic are usually directed there while they were specifically looking for services /products that are similar to what your business offers.
Why is Referral traffic Important?
In this era of influencer marketing, it is equally important to work on improving referral traffic. The visibility of referral traffic to your website helps improvise strategy and identifies a focus point that yields results.
You can implement a successful referral program with a targeted marketing campaign and few benefits like incentives or discounts to keep both referrers and customers interested.
It also becomes important to test and measure the referral traffic to ensure the program is working well for your business.
How to measure:
Google Analytics has made measuring referral traffic very easy. All you need to do is go to the analytics- > Traffic Sources- > Referrals;this will give you the snapshot of your website visits/traffic for the month. A table will be displayed with a list of domains referring to your website.
For example, you can see that a blog or product page is performing exceptionally well; by tracking down this link, you discover that the visitors are routed to you via a blogger who has reviewed your product and added a link on his website. You can then contact the blogger and nurture your relationship further. Social media influencers are an excellent place to start with, as you may greatly benefit from their devoted followers.
Bounce rate is a key metric one should keep an eye on. It is the percentage of visitors who leave or navigate away from your website by just viewing a single page.
Bounce Rate = Total Number of One Page Visits
Total Number of Visits to the Website
Average Bounce Rate: 45.7%
Why is bounce rate so significant?
Measuring bounce rate gives a clear picture of how many visitors are spending time on your website. Because, longer the time spent on the webpage, higher are the chances of conversion.
It also helps you analyze the pages which have the most bounce rate. This helps in considering changes that are to be made to the content/graphics and in turn improves user experience on those particular pages. It becomes easy to identify your target audience’s interests to build the overall strategy similarly.
Social Media Engagement
Social media engagement includes all your presence on the web, social media platforms, conversations, brand followers, criticizers, etc. Tracking down all the social media activities gives you a lot of data & inputs to strategize your marketing activities.
How to measure:
Likes & Dislikes- Measure & keep track of the likes and dislikes your post has received after a specific time to understand what is well received by your audience. This may be done on all social media platforms.
Comments- Analyzing comments are a better way of understanding the engagement received by a post. Also, note that every person who likes or dislikes may not necessarily comment. Hence it is just a way to draw a rough conclusion to identify ‘why’ the majority likes/dislikes were recieved.
Shares- Shares per post across platforms is a good way to identify how many viewers liked and shared it forward. It also may work as a referral way of traffic.
Clicks- Clicks per post across all social media platforms give an understanding of how many viewers have actually cared to click on the post and know more about it.
Why is social media engagement important?
Social media is the new marketplace. One may not be able to guarantee that a prospect will land on your website, but it is safe to say that a good amount of time in the day is spent on these platforms. You will definitely want to direct your social media marketing efforts logically. Hence, not only is having a social media presence important but tracking the engagement is essential too as the trends and customer behavior keep changing while these numbers assist in decision making.
Email Marketing Metrics
The power of email marketing is above all social media channels. One sudden algorithm change, and all your efforts and strategy goes in vain. But no one can steal a rich email list, which can work wonders for you.
What to measure?
Open rate- This KPI helps you track how many subscribers opened your email. It is more likely for emails to be missed and moved to some non-attended folder. In this case, working on an attractive subject line and the first two lines is very important. It nudges the receiver to at least open the email.
Click-through-rate (CTR) – This determines how many email receivers have clicked on the link in the email. While opening the email is the primary goal, you also want the reader to click on the link that directs to your website.
Conversion rate- The conversion rate will keep track of how many people clicked on the link and completed the action you intended them to perform. After all, the ultimate goal is to have a task completed like a form-fill, an opt-in, etc.
Spam issues- Beware of spam complaints. Many people tend to ignore such complaints, but the right thing is to take precautionary measures before being blocked by the service provider.
Only diverting your efforts on attracting more traffic is not important, but keeping an eye on their sources is essential.
Sources can be:
Direct visitors- Visitors that come to your website by typing the URL
Search visitors- Visitors that come by searching for you on Google
Referral visitors- Visitors that land on your website by clicking a link from another website/ social media platform, etc.
Why is it important?
You would definitely want to know where your website is drawing traffic from. If all the traffic is coming from Google alone, and there is an unexpected change in any algorithm, you are more likely to lose all your traffic in a day.
Conversion of New vs. Returning Visitors
Tracking down the new visitors to your website is as important as tracing the returning visitors. Having said that, maintaining a good number with these metrics takes different strategies for both of them.
A new visitor will react differently to your website than a returning visitor. For example, a new visitor would want to figure out what the website is all about? Or how to navigate? Etc. You will have to consider these points and resolve them further.
In the case of a returning visitor, you may have to check whether this a converted visitor or why the conversion did not happen the first time?
Conversion by Product
These metrics help you find which product in your line of products is doing well when compared to the others.
How to measure:
Conversion by product – Number of transactions for the product
Number visits to that specific product page
Why is it important?
Measuring this metric is useful to determine whether the product is doing well. Also, a logical reasoning to base any changes being made to the cost or offerings and others.
Micro to Macro Conversion Rates
A micro conversion is a minor engagement on the website, for example, newsletter signup, request for an eBook, etc. At the same time, a macro conversion can be major, like a completed sales transaction.
|Navigation based conversion
|Interaction based conversion
|Lead member acquisition conversion
|Engagement based conversion
Average Order Value
The average order value is the average amount spent by customers on each purchase.
Average order value = Total sales
Number of orders
Why is average order value important?
Average order value is an important metric for any business. It gives deep insights into the buyer behavior, buying patterns of the customers, marketing expenditures on products, pricing, etc.
Customer Acquisition Cost
Also known as CAC, is the total cost required to acquire a customer. It includes the cost of production, storing, and expenses at the warehouse, shipping, etc.
CAC = All the cost spent on acquiring more customers
Number of customers acquired in the period the money was spent
Customer Lifetime Value
Customer lifetime value (CLV) is the customer’s net profit contribution to the eCommerce business over time. It is also an essential metric for measuring gross profit success.
- Calculate customer value for each segment of your customer base
Customer Lifetime Value = Customer value X Average customer lifespan
- Customer lifespan is the length of your relationship with the customer before becoming inactive permanently. You may also have to consider customers that are on a contractual and non-contractual basis.
Why is customer lifetime value important?
Measuring the CLV will assist you in building the right balance between customer retention and acquisition. Moreover, having clarity at what point a customer becomes profitable is necessary for allocating the right budget for every marketing channel.
Shopping Cart Abandonment Rate
It is a metric that helps you identify how many customers started the checkout process and dropped off before completing the purchase.
How to calculate:
Shopping Cart Abandonment Rate = Total number of completed transactions
Total number of transactions initiated
Why is shopping cart abandonment rate significant?
It is crucial to measure how many customers abandon carts just before making the payment. It helps you analyze the ‘why’ behind the cart abandonment rate. There can be various reasons like complicated check out process, overcharging for shipping, taxes, etc. Minimizing this metric is a good way of increasing your revenue right away.
Net Promoter Score (NPS)
It helps you measure customers’ willingness to recommend your products/services to others.
How to calculate:
Net Promoter Score = Percentage of Promoters – Percentage of Detractors
Why measure NPS?
Tracking the NPS is a good way of evaluating the customer’s satisfaction with your products/services and their loyalty to your brand. Awareness of the NPS also promotes constant improvement in building a better experience for customers.
Revenue on Advertising Spend (ROAS)
It measures your business’s total income for each dollar spent on advertising, similar to a familiar term, return on investment.
How to calculate?
Revenue on advertising spend = Conversion Value
How important is ROAS?
Measuring the ROAS is a good way to evaluate the effectiveness of your marketing and advertising efforts. The more you work on the effectiveness of your advertising, the more promising revenue you generate from every penny spent.
There can be thousands of metrics you can measure to achieve your goals. The need is to spot the point which needs improvement and strategize accordingly.
Lastly, would you like our team of experts do the digital marketing for you? Be it digital marketing or eCommerce services, our experts at i95dev empower businesses with next generation eCommerce solutions.
A Comprehensive Guide to Accelerate Your Automotive Business Growth with eCommerce Author Category Share Introduction The automotive industry has undergone a significant transformation in...
Key Trends Shaping the Home Décor, Furniture and Lifestyle Industry Author Category Share As technological advancements continue to redefine the way we live, the home décor, furniture and...
A Comprehensive Guide to eCommerce for Home Décor and Furniture Brands Author Category Share Introduction In a world where digital presence shapes consumer interactions, the home décor and...