5 Ecommerce Metrics To Track

You know that it's important to monitor the performance of your store, using solid, reliable data. But what's the best way to do it? Which numbers are really important? Everywhere you look, there are metrics, charts, facts and figures, and you'd probably drive yourself crazy trying to track everything ­- so which ones are the 'key' key performance indicators, the ones that you can't afford to miss out on measuring? Here are the 5 we'd plump for above all others...

Conversion Rate

Conversion rate refers, very simply, to the proportion of your visitors who take the action you want them to. Whether it's signing up for your newsletter, downloading a file, creating an account, or – most commonly for us Ecommerce people – buying your products.

This is a vitally important metric because it reflects on the practicality of your page – how easy is it for customers to find what they're looking for? How many 'get what they came for?' Generating traffic is hard work – how much of that traffic is being capitalised on?

Of course, 'conversion rate' alone – however useful – is just one number. Digging slightly deeper, it'll also help to consider stuff like:

  • Bounce rate – the percentage of people who leave after viewing a single page
  • Exit rate – each page has an 'exit rate' which is the number of people who leave after viewing that page
  • Average time on site – how long the user's spending on your site
  • Average page views – how many pages they're viewing before leaving.

Evaluating these factors means you not only build an accurate picture of your conversion rate – you can build an understanding of why visitors aren't converting, which helps you address those areas of weakness.

Remember, conversion rate can always be better, so while you can use benchmarks to judge your performance, follow the old saying; just try to be better than you were yesterday!

Cart Abandonment

Cart abandonment rates are enough to give many Ecommerce merchants nightmares; you've attracted a potential customer to your store, sold them on a product sufficiently for them to add it to their basket – only for them to quit the process without completing their purchase. It's pretty frustrating when you stop to think about it!

But abandoned carts may actually be more common than you think. A number of different studies have been carried out into the percentage of carts that are subsequently abandoned, with the numbers fluctuating wildly all the way from 55% to a whopping 80.30% - with an average of 67.91%. [source] A pretty remarkable number!

There's a number of different reasons customers may abandon their cart – unexpected costs, lengthy, complicated processes and simple indecision can all play a part. Perhaps, some argue, visitors are simply 'saving' their products for later, and have no real intention of buying at that precise moment.

Try and see things through your customer's eyes, and isolate any potential reasons why they might not follow through with their purchase. Are you expecting them to jump through too many hoops? Is the process time-consuming and cumbersome?

One feature you may be interested in is AmeriCommerce's Abandoned Cart Recovery function. This feature allows you to see all abandoned carts, along with a host of visitor data, and then send an automated email to attempt to convert it into a sale. It's pretty cool!

Average Order Value

Average Order Value is calculated by dividing your overall revenue by the number of orders taken, and (as you might expect) refers to how much, on average, your customers spend in each transaction.

We all know it can be hard work to generate high volumes of 'new' customers, so if you're looking to grow your revenue (who isn't?!) then maybe the best approach is to extract the maximum value out of each and every order.

There are all manner of things you can do to increase this figure; intelligent up selling, cross-selling, volume discounts and promotions such as free shipping are always helpful. Why not A/B test to see which strategies work best for you in increasing this number?

Related reading:

8 Ways to Increase Ecommerce Average Order Value

Repeat Purchase Rate

Again, the common consensus has always been that keeping customers is much easier than acquiring new ones. Customers who have bought your products before already knowabout your store and have experience of shopping with you, so it's often more efficient to encourage them to shop again than to speculate on new leads. After all, they've already (hopefully) had a positive engagement with your brand.

Again, more than just a 'number,' you can scratch the surface to reveal quite a lot of valuable and actionable insight here. Are customers just shopping with you once or twice? If so, why? Is there a noticable 'drop-off' point that you might be able to address with a campaign and/or promotion? Where do your most 'loyal' repeat customers come from? What did your 'churned' customers purchase, how were they targeted and why did they not come back? How can you target 'about to churn' customers to stop it from happening again?

There's plenty to think about here and, it goes without saying, even modest increases in repeat business can really help give your business a boost!

Lifetime Customer Value

This has been described as one of the most overlooked and least understood metrics in business. It simply refers to the expected profit you'll make from a particular customer in the future – and, by definition, it should be a major consideration in several major decisions you'll make, particularly your marketing budget. How much are you willing to 'spend' to acquire a new customer – needless to say, if you spend more than you expect to recoup, there's little point in pursuing that relationship.

Using the example from the article above, if we take a gym member, paying $20 per month for 3 years, you're looking at $720 in revenue ($240 per year.) In this instance, you can see why gyms are often willing to forego an initial joining fee (say, $20) to help drive traffic, as, over time, that discount will more than pay for itself.

Take a look at your existing customer base – how much do they spend? How often? Make sure that, in attempting to drive traffic to your store, you always bear this number in mind so you don't pay over the odds to attract new customers!

The Numbers Game

So, hopefully you found our list interesting and thought provoking. We'd love to hear which numbers are important to gauging your store's success – why not head over and discuss this on our Facebook page?

Don't forget, AmeriCommerce gives you a comprehensive suite of reporting tools which lets you track these, and many other, important metrics!

More Awesome Content


Get tips and resources for selling delivered directly to your inbox.

Comments
(
1
)


David Adams
August 19, 2014 11:18 AM
The cart thing is pretty annoying I'll admit, but I've been one of those customers who've added a few things to the cart and then decided I didn't need it at that time or just didn't want it. There's a lot of people like that out there. My main thing is about getting return customers to stick with me, and my rate is pretty decent I'd say, but it could be better. Anyways, I'll look into these other statistics more and see if I can better myself.

Leave A Comment

PCI logo

We Are PCI Certified and Meet or Exceed Security Standards and Regulations. With AmeriCommerce, Your Data and Your Customer's Data is Safe.

Rackspace logo

Our fully managed, scalable infrastructure, runs on state-of-the-art servers at Rackspace. Our uptime is stellar.

© 2017, AmeriCommerce, LLC