15 Key Metrics Every E-commerce Business Should Track
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Tracking key metrics is important for ecommerce companies to analyze business performance and customer behavior. Some important metrics include sales conversion rate, customer acquisition cost, revenue by traffic source, new vs returning customers, conversion by device type, cart abandonment, percentage of returning customers, average order value, customer lifetime value, customer retention rate, average order size, email engagement, Google search performance, social media conversion rate, and number of transactions. Understanding these metrics can help companies improve marketing strategies, lower costs, increase sales and optimize the customer experience.
15 Key Metrics Every E-commerce Business Should Track
- 1. 15 Key Metrics for Ecommerce Companies
- 3. If a thousand people visit a website per month, but only 1 among them makes a purchase, then the sales conversion rate is 1/1000 or 0.001 (very low!). Even if you are having enough sales and there’s an increase in customer visits, a low sales conversion rate indicates that there are glitches in your e-commerce platform which are driving away a huge percentage of visitors.
- 5. Customer acquisition cost (CAC) is a metric that holds importance to the stakeholders and the internal marketing team. It can be calculated by dividing the total spending on marketing and advertisement over a period of time by the number of customers acquired during that period.
- 6. Marketing campaigns take time to show results about CAC. Advertisements running in a particular month might draw more customers in the upcoming months due to late customer reaction, or a more suitable time for the advertisement from customer’s point of view.
- 8. Marketing efforts can got to waste, if you don’t know how to plan your marketing budget. Revenue based on traffic sources can reveal which sources are bringing in more hits, and which are gaining higher conversion rates.
- 9. Such numbers can help in understanding which clicks are more valuable and which ones require more input payment. However, certain sources like referrals and organic hits can be difficult to track.
- 11. Retaining old customers is as important as getting new customers. If old customers are happy with your website’s user experience, they can spread the word and bring in more prospects for your e- commerce business.
- 12. Customer retention increases the lifetime value of customers. Customer acquisition costs can increase if you are focusing on a large quantity of customers, rather than the quality. Conversion figures of new vs returning customers need to be tracked to make sure that the existing customers are happy.
- 13. Conversion based on device type
- 14. People access the Internet with a variety of devices today. Among these devices, mobile devices are the fastest growing means to surf the web. Conversion rates based on device types can help in understanding whether your site needs optimization based on device types, screen size, or for areas with slower internet connectivity.
- 16. Cart abandonment is the biggest nightmare for all e-commerce companies. It can be brought down by improving the customer experience at stages where customers are leaving interaction with the platform.
- 17. For example, a location tracking service can be used in place of making a customer type their entire address and help in lowering down cart abandonment at the stage of address fill-up.
- 19. Returning customers are a boon for the e-commerce sector. This is because you do not have to spend extra money to re- acquire them, and also because they have got accustomed to using your e-commerce platform to purchase products.
- 20. Tracking the number of returning customers can indicate how many customers can think of using your website for a longer run.
- 22. The average order value(AOV) is another metric that can help in several decision-making procedures. It is calculated by dividing the total revenue by the number of orders.
- 23. Decisions like bearing the shipping cost or including it in the customer’s business invoice can depend on the average order value. AOV also helps in deciding on your future marketing strategies and how to focus on increasing per order value.
- 24. Lifetime Value of the Customer
- 25. Customer Lifetime Value(CLV) is a complex metric that helps in computing the revenue brought in by a customer, after deducing the acquisition costs. It also takes into account factors like number of visits and average spends per visit by a customer. This metric is used mainly for targeted marketing to increase CLV for existing customers.
- 27. Customer retention rate helps companies in understanding the fraction of users of a website as regular or one-time users. The higher the percentage of regular users, the better it is for the e-commerce platform.
- 29. Average order size deals with the number of items purchased by customers in a single order. A higher figure would mean that cross-selling efforts and recommendation engine results are paying off, and people are adding more items to a single order. Higher average order size reduces shipping costs and increases profitability.
- 31. Email engagement still remains one of the cheapest and best ways to engage more customers. This involves sending personal mails to customers and prospects a product or product catalogue.
- 32. To make the best out of email engagement and collect higher metrics, it is important to understand what kind of emails are driving customers to the e-commerce platform. This also includes if the tone and voice in the email needs to be changed or if there’s a requirement to include visual content like images, short videos to the email draft.
- 34. Performance of an e-commerce platform on Google Search reflects how well its website is SEO optimized, and is able to drive organic hits. There are certain terms which are important in this aspect.
- 35. Number of impressions: It is the number of times a website URL was shown on the search engine results page (SERP). Clicks: It refers to the number of people who clicked on the links to a website that appeared on the search engine results page. Both of these metrics are valuable parameters for a marketing team to compute a website’s Google Search Performance.
- 37. Social Media Conversion Rate measures the number of customers who reached out an e-commerce platform from advertisements on social media platforms, to make a sale.
- 39. Number of daily, hourly, weekly, monthly or yearly transactions can show patterns in sales and/or purchase behavior of an e- commerce platform. This includes trends like the time of the day that registers highest traffic or months that witness slumped sales and much more.
- 40. A pioneer is custom and large-scale web data extraction. www.promptcloud.com | sales@promptcloud.com