With the advent of digitalization and globalization, setting up an e-commerce business is like making a toast. But it is essential to enjoy your toast instead of burning it! Similarly, as easy as it seems to open an E-commerce business, it requires dedication, perseverance, and profound market knowledge to track the key metrics successfully.
Being a technologically-driven platform, tracking metrics in e-commerce is imperative to become distinctive amongst your peers. It's a tedious task to boost business branding, right from creating a trending e-commerce website to logo designing and campaigning. But how can key metrics help to elevate business growth? Let's find out!
KPIs—all you need to know
Wouldn't it be great if every business had one-size-fits-all metrics to track and boost growth? As exciting as it sounds, every business requirement is different in terms of the target audience, services, and accountability.
With key metrics, you can keep a bird's eye view on your business, but at the same time, you may feel uncertain which metrics to follow to boost sales. The rule of thumb: All KPIs are metrics, but not all metrics are KPIs. Key Point Indicators (KPIs) are relevant and valuable metrics for your business. Every business branding depends on unique KPIs, which helps organizes enhance their services, products, and engagement with the audience.
So how do you select an impactful KPI metric?
Well, we choose the SMART Approach—Specific, Measurable, Actionable, Relevant, Time Sensitive.
Top 10 key metrics every e-commerce organization must track
Track the sales conversion rate
One of the imperative aspects to boost growth is to track sales conversion rates. Even if there are thousands of visitors on your e-commerce website, but only 5 makes a purchase, your sales conversion rate is 0.005 (5/1000), which is alarmingly low and is an indication that your website isn't enticing enough or fails to reach out to the target audience. You can track sales conversion using tools like Google analytics.
Know the customer acquisition cost
Customer Cost Acquisition (CAC) is of the utmost value for the internal marketing team and the stakeholders. With this metric, you can track the number of customers gained during a certain timeframe of a marketing campaign. To calculate this, divide your total campaign expenditure by the number of customers gained. The only hassle is that this metric requires time to show potential results as there can be late customer reaction, delay in word of mouth, etc. Besides, the graph of customers gained from advertisements varies every month.
Generate revenue from traffic
In e-commerce, it is necessary to know which traffic source generates higher revenue and which sources are proving the highest conversion rates. Hence it is essential to have an effective marketing strategy that will help you analyze the key areas where you should spend the money to maximize return on investment. Let's say 2000 customers visit your site through affiliated marketing, and 500 makes a purchase wherein most hail from Facebook ads, you will know which clicks are more valuable for your business.
New vs. Old customer—keep a tab
Gaining a new customer is a boon, but retaining the old is necessary because your old customer is an asset who will create brand awareness through word of mouth. This will also showcase positive feedback from the existing customers while encouraging the newer ones to give it a try. Conversion figures of customers are imperative to track as they portray that the happiness of the existing customers.
Conversion based on device types
With smart apps daunting people's lives, e-commerce websites are no longer confined to the world of bulky desktops and laptops. People can shop on-the-go, so leveraging a website design agency, you must make your site portable to fit the bill of mobile data, thereby allowing customers to access the website on a smartphone or tab. Such conversion metrics will help optimize the app with smaller screen size, slow internet, and make it viable for all devices.
Tracking Cart Abandonment
An e-commerce website's biggest fear is cart abandonment. But you can subsequently reduce the number of abandonments if you analyze the point wherein most cart abandonment occurs. With these, you can not only boost sales but enhance customer engagement on your platform. Hence stage-wise metrics on cart abandonment play a prime determining factor here.
Tracking the percentage of returning customer
A customer revisiting your website is a valuable addition as you not only need to spend more to re-acquire their faith but on their Google search list of e-commerce websites, you are on the lead. Tracking these metrics will help you understand how many customers can benefit your website in the long run and even those who haven't used your site after a single purchase.
Analyzing the Average Order Value and Size
The average order value is a key determining factor for various marketing strategies and focuses on improving the per-order value. This is calculated by dividing the total revenue earned by the number of orders. While the average order size demonstrates the number of orders a customer purchases on a single order. The higher the figure, the enhanced is the cross-selling strategies and recommendation results.
Enhancing existing customer engagement
One of the most complex metrics to calculate, Customer Lifetime Value, is mainly focused on the existing customers and improving targeted marketing. Even the importance of existing customers is calculated by a higher percentage of customer retention rates.
Improving on Email engagement metrics
One of the oldest, cheapest, and convenient ways for customer engagement is email marketing. Sending out notifications about personalized shopping and cart abandonment isn't new, but it is more important to analyze if the strategy reaps a harvest. Adding images or making a conversational tone can entice customers towards the brand.
Steering the wheel of fortune for the-commerce sites branding agency
also focuses on tracking the social media conversion rate to know if social media posts effectively convince customers about the brand.
Besides, if your ecommerce website is SEO optimized, the search rank on Google Performance every time a user searches something related to the site will bolster its image. Also, keeping a check on the number of transactions per day with the highest peak time of transaction showcases the company's reach amongst the target audience.
Hence, it is necessary to keep checking these metrics at regular intervals to escalate business development.