6 Recommended E-Commerce Metrics for Tracking

Typically in e-commerce business, metrics and key performance indicators (KPIs) are extremely important data points that allow business owners to evaluate the performance of their online stores. E-commerce business owners rely on these metrics to monitor customer behavior, sales trends, and marketing performance to better assess the profitability of their marketing efforts. However, what is most important is to know the right e-commerce marketing metrics to diligently track to ensure you’re optimizing your website for current trends. If you understand what you want to measure, it becomes easier for you to determine exactly what you should be tracking.

Following are 6 of the most important metrics recommended for tracking by experts.
 
1. Conversion Rate

For good business to take place in your e-commerce website, customers must come to your website. If these customers come to your website, you must be able to convince them to take action. If you can’t convince them to take action, your business will struggle to get a good return on investment (ROI) on your money and effort. The metric that speaks to how visitors to your website react on the site is Conversion rate (CVR). Technically, conversions can include, when visitors make a purchase, opt in to receive emails, share on social media, submit a contact form, complete a poll, register for an account, follow on social media, adding an item to a wishlist, or review a product. The business goals of the business largely determine the CVR to focus on. From the CVR metrics, you can easily determine what works and what to fix. In your e-commerce business, striving to fix conversion leaks is the surest way to increase revenue even without spending more on ads.
 
2. Average Order Value

If you get visitors to your website, can you get them to make a purchase? Even if you manage to get them to make a purchase, can you get to increase the amount of each purchase? To handle this, the metric you need to measure is the Average Order Value (AOV). This is simply the average amount a customer spends when making a purchase on your website. You can make customers spend more by enticing them to buy in bundles, through upselling, and through volume discounts. This is the best way to increase you AOV and therefore an important metric to measure in your e-commerce business. If you cannot devise credible ways to increase your AOV, you’ll merely be working harder but making less money.
 
3. Return on Ad Spend

Advertising online costs money, good money in some cases. Even at that, advertising is still one credible way to reach your customers. To cut costs and for your ads to still be effective, you must diligently measure you ad spend metrics. If you diligently track the success of each advertising campaign, you can ensure you’re making the most of your ad spend. This metric is known as Return on Ad Spend (ROAS). This metric can help you to fix your ads targeting and effectiveness to reduce wasting money on poor ads.
 
4. Returning Customer Rate

Repeat customers are the lifeblood of any successful e-commerce business. This is why you must endeavor to measure two vital metrics about repeat customers. These metrics focus on returning customer rate and customer lifetime value. These two metrics are important for a sustainable e-commerce business model. You must therefore endeavor to focus on customer retention strategies like email, SMS, and subscriptions. This will help you to get more and better results even without spending more money on paid ads. This is about the best way to have a sustainable pathway for long-term business growth.

5. Customer Acquisition Cost

Customer acquisition is the primary purpose of e-commerce marketing/advertising. In doing this, you must track the ROI on your efforts. It will help you to determine the average cost for each new customer your business attracts. The metric you need to diligently measure is known as Customer Acquisition Cost (CAC). Significantly however, it is much cheaper to retain customers than to acquire new ones. The reason you must always have a keen eye on the ROI on your efforts to bring in customers. Marketing strategies like Email, SMS, and loyalty programs are great for customer acquisition at reduced costs.

6. Cart Abandonment Rate

If your cart abandonment rate is going up, it means something is wrong with your checkout process that needs urgent fixing. Cart abandonment simply means unfinished shopping business. Even though every e-commerce website has to deal with unfinished purchases, but excessive shopping cart abandonment can be a real problem that needs fixing. It is therefore very important to diligently track your website’s cart abandonment rate (CAR) and strive to have it improved without any delays. If through the CAR metrics you notice that more and more shoppers are abandoning their carts, it means your checkout process needs fixing. The process may either be too complicated, cumbersome or too boring. The vital info from the CAR metrics can help you determine how best to make your checkout much simpler, in addition to follow-up emails to get shoppers to complete their shopping.

Why Keeping E-Commerce Customers Matters More than Acquiring Them

Every e-commerce business always wants to attract new customers. But many have since found out that attracting new customers in today’s business environment is not only difficult but also expensive. This is largely due to the huge competition out there in e-commerce business world. Out there, it is hugely difficult to convince a perfect stranger to make a buy decisions. Doing so often requires a significant investment of time, energy and marketing resources. Comparatively in terms of costs, it is much cheaper to retain old customers than to source new customers. Customer retention promotes loyalty and more repeat business which is great for the bottom line. Significantly therefore, the biggest ROI lies in keeping your existing customers longer.

Following are powerful ways to improve customer retention and lifetime value in your e-commerce business.

Loyalty Momentum Effect

In business-customer relationship, loyalty begets loyalty. The loyalty momentum effect is thus a powerful force for e-commerce businesses. If as a business owner you deliberately create positive shopping experiences for your customers, it helps your business to create more opportunities for goodwill and loyalty-building. By doing so, your business can manage to ignite a beneficial cycle of caring for your customers while they in turn remain loyal to your business. Anytime customers have many good experiences with your business, they are likely to tell others. This significantly helps to create a high-quality, cost-effective lead generation channel for your business.
 
You can explore many ways to tap into the loyalty momentum effect. You can choose to tap into traditional loyalty programs to build this momentum. Programs like discounts and free products for past purchases, rewards for taking desirable actions like promoting a brand on social media, being an active member of a community, and writing positive reviews are great for building momentum. The key is, you can build momentum by intentionally rewarding customer behaviors that directly support your business. Customer loyalty builds up over time with the help of these rewards.
 
Ease of Making Loyal Customers Brand Ambassadors

Brand ambassadors are golden loyal customers. You can easily build brand ambassadors from your crop of loyal customers. Brand ambassadors are individuals who already believe in your products and are willing to promote them with pride. These are the kinds of individual you can best build your brand ambassador around. These individuals usually carry immense clout in the marketplace. This gives them the right potential to accelerate your customer retention funnel. You can deliberately tame and nurture your brand ambassadors to grow your business. This ultimately helps to make them a dependable marketing channel and a source of high-quality feedback. This helps your business to continue to transform first-time shoppers into long-term advocates for the business.
 
More Effective Marketing with Personalized Experiences

One of the best and most effective ways to separate your e-commerce business in the minds of customers is to carefully create more personalized shopping experiences. This is because most customers always want to see their preferences and desires reflected in the products they buy. If you are able to make this happen as a business owner, it becomes fairy difficult for your customers to switch loyalty to other products. But, delivering personalized experiences requires that you know your customers well enough. If you don’t, it can be pretty difficult for you to collect reliable information about who they are and what they want. Such personalized data can be really valuable for your business over time if you act on it. Ensure your data is trustworthy enough to be reliable for marketing purposes.
 
It is possible for you to collect such data effectively by way of customer feedback obtained through surveys and analytics info. If you have actual behavioral data of your customers, it can always help you to determine where and how your marketing campaigns and product offerings are falling short and exactly what you need to do in them to keep your customers returning for repeat purchases.