To Make Sure That Your Business Is Succeeding, You Will Need To Focus On Analysing The E-commerce Metrics
With the ever-growing supply and demand of products and services, it is not a surprise that you will notice an increase in the number of e-commerce businesses. At the same time, with the rise in the number of businesses, there is a rise in the level of competition. Taking into consideration the data you receive is going to play a vital role in ensuring that your business stays on top of its competition. While initially, your main focus will be to build a good website to launch your products, once that is done your next step should be to focus on analyzing e-commerce metrics.
Once you learn how to keep track of these metrics, your business will thrive with time. You can check the performance of your business through these metrics that can help you to make informed decisions in the future. You will know better what are the strong and weak areas of your business. Below are key ecommerce metrics that you should keep in check.
Sales Conversion Rate
Sales are the final result that every business aims to have. The sales conversion rate is the actual percentage of people who landed on your website and completed the action of actually purchasing something. This is one of the most important Key Performance Indicators for your business. You can use this e-commerce kpi guide to understand the overview of KPIs. As for the sales conversion rate, you can use the insight you get from these metrics to track your key successful areas as well as those that need improvement. You try new things to improve sales like adding quality images or writing a more informative copy.
CLTV And CAC
The CLTV or customer lifetime value gives you an idea of the total worth of a prospective customer to a business. These metrics can be used to understand which of the customers are most valuable for your business. It will help you to estimate how much money you should spend on a particular customer in order to retain them, and how much revenue can you expect to get from them. CAC or customer acquisition cost determines what your cost will be when you want to acquire new customers for your business. Acquiring new customers is always going to be a more costly affair as compared to retaining old ones. This is because when you want new customers you will have to spend more on different and new marketing channels as well as create advertising campaigns to attract more attention.
Average Order Value
The average amount of money spent when a customer makes an order on your website is the average order value metric. To get this figure you will need to divide the total revenue by the total number of orders you received. This can help you to determine the marketing efforts you have put in along with the pricing strategy. You can then look for ways to decrease your transaction cost and increase customer spending.
Cart Abandonment Rate
There will be times when the customer on your website will add many items to their cart but will abandon them at the last minute. This metric is called the cart abandonment rate. If this is happening too often then you need to consider what the reason can be. This could mean that there is friction that takes place during the checkout process. For example, maybe the refund policy is not good or maybe the final charges do not add up properly.
Revenue By Channel
This is another important metric that you will want to know as this can help you to check the performance of different marketing channels that you are adapting. When you know how much revenue each channel brings for you, then you can invest your money in the channel that is most beneficial and gives you the highest return on investment. For example, if you notice that the insights for running campaigns on social media are bringing more value then you should focus more on that channel.
Page Speed And Load Time
How long your page load time is, will determine the user experience people have on your website. If your page takes a lot of time to load and is slow then it can have a very negative impact on your prospective customers as they will leave the page after being frustrated and probably shop with your competition. The bounce rate on your website will increase and this will further have a bad effect on your Google ranking.
Paying attention to all these e-commerce metrics is going to be helpful to track your profit and revenue as well as focus on key points wherein the improvement is needed.