Meanwhile the start of the pandemic, e-commerce has grown rapidly. Most brands active in this sector have achieved considerable success. This dynamic can be monitored through e-commerce metrics that allow us to comprehend the performance of our online store and how to improve it. We’ll show you the most effective ways to measure the success of your e-commerce so you can assess the development of your online business and learn how to improve he.
Essential Metrics to Know the Success Of An eCommerce
Many metrics can help you measure the growth of your e-commerce. Here, we’ve selected 20 that we consider the most important and could be very useful.
Traffic Per Device
An online store can receive traffic from different devices, but customer behaviour on each device is different. Conversion rates, number of purchases, bounce rates, and many other metrics will vary.
Understanding how e-commerce traffic is distributed in our business is essential to comparing and determining which devices generate the most response and, above all, which should be our primary focus.
Nowadays, the conversion rate on a computer is often (though not always) higher than that of a mobile phone. But this doesn’t mean mobile phones aren’t important, as they are where the first visits to online stores are made and customers make their first contact.
Bounce Rate
The bound rate is the number of users who visit our website and leave without taking any action. This metric events two user actions: the number of website pages visited and the time spent.
It’s often believed that users who spend more than 30 seconds on a website are no longer counted toward the bounce rate, but this isn’t true. It doesn’t material if the user spends 10 minutes reading information about a product or service. They are counted toward the bounce rate if they don’t visit another page afterwards.
It’s essential to keep this metric as low as possible, as it will indicate that users like your site and can improve your ranking on Google, as this is the important search engine that considers it.
Subscriptions To The Email List(E-commerce)
For e-commerce, the database is one of the most essential elements, as it allows you to build customer loyalty. Attracting subscribers to your mailing list is one of the best ways to grow it. You can increase your expenses with an appropriate loyalty and development strategy if it grows. Monitoring the growth of your database allows you to understand if you’re on the right track.
Email Open Rate
The open rate of our emails is a metric that allows us to evaluate the reactivity of our database. Many online stores believe that the more emails they send, the better results they will achieve with that rate, but this is not true. The key to accomplishment lies in sending emails at the right period and with valuable content that interests the audience. The secret is to write a good topic line that fits the purpose of the email and the stage of the purchasing process in which it is sent. Regular A/B testing helps improve this rate.
Return On Ad Spend (ROAS)
It’s a good idea to run this analysis for each sales channel where your e-commerce site is present, i.e., Facebook Ads, Google Ads, Bing Ads, etc. Once we have the results, we can compare channels at the same level of the sales funnel to see how effective they are.
Conversion To Sale Rate(E-commerce)
This indicator reflects the number of visitors to our online store who have made purchases. It significantly impacts the online store’s results and revenue, so the higher it is, the better. The average conversion rate to sale for an online store in Spain is between 1% and 1.9%.
Perhaps more attention should be paid to this indicator.
Average Order Value
This metric shows the average customer spends on a purchase in your store. It’s crucial because e-commerce (like any other business) has a traffic acquisition cost that depends on the average order value. Therefore, if your company manages to increase the average order value, revenue will also increase, and your business will have more room to invest in further growth.
Creating product bundles, setting minimum orders, or experimenting with related products can help us increase this metric.
Average Lifetime Value (E-commerce)
Monitor the number of orders a customer or user generates on our e-commerce site throughout their lifetime and their value. A high normal lifetime value will allow us to invest more in traffic acquisition strategies and finance our growth, as it gives us confidence in the return on investment (ROI).
Customer Acquisition Cost
This metric is calculated by dividing the cost of a specific action by the number of customers acquired through that action. The key is to ensure that the cost of obtaining a customer does not exceed the average price over the entire lifecycle (previous metric). A balance must exist. In many cases, the acquisition cost is recommended to be ⅓ of the average cost over the entire lifecycle, as this ensures profitability. However, this figure is indicative and may vary depending on each company’s margins.
Revenue By Traffic Source
In this circumstance, for each of the traffic sources we’ve already analysed, using the ROAS metric, we’ll need to evaluate the revenue they generate. This way, we can promote those who generate the most revenue.
We endorse not relying on just one or two traffic sources. It’s better to diversify them if, for some reason, the cost of one of them increases or an event causes a decrease in our revenue.
Profit Margin
This metric, used to analyse the success of our e-commerce business, is closely related to sales costs and the margin applied. For example, if sales volume is high and profitability is low, the effort invested in each sale might not be entirely profitable. Conversely, despite a moderate sales volume, profitability may be high, making my business a profitable project.
Products Or Services With Better Results
Understanding this aspect will allow you to improve what works best in your product or service offering and identify things that aren’t generating sales to try to understand the cause and find a solution.
Cart Abandonment Rate
We’ve found that online stores have cart abandonment rates as high as 70%, and even in the US, the rate is as high as 90%. In this case, monitoring will be key to moving forward and setting up automated abandoned cart emails to reduce this rate.
Retention rate (E-commerce)
To improve our e-commerce results, knowing the number of repeat customers is essential, as it influences many aspects, including investment in customer acquisition. A high number indicates profitability.
The higher the customer retention rate, the greater our e-commerce growth. Therefore, weekly or monthly monitoring is recommended.
Abandon Rate – E-commerce
It shouldn’t be confused with the bounce rate, as in this case, the consumer interacts with our online store’s content and may visit several pages without ever making a purchase. However, in both cases, it’s advisable to minimise its impact.
Return And Refund Rate
If the return rate is too high, sales volume will decrease. In addition, there are the logistics management costs for returns and refunds. Therefore, it will be worth monitoring this indicator and looking for ways to improve it.
Attendance Rate
This is the number of users who need help completing a purchase. We can often solve this problem with chatbots or effective customer service.
If this number increases significantly, something is not working properly in the purchasing process, or some information is unclear. Then, we should try to improve this process as much as possible.
Average Incident Resolution Time
This also influences the moment the customer makes the purchase. We must respond quickly to any questions, as this will instil confidence in the customer and strengthen our reputation.
Net Promoter Score for E-commerce
This well-known metric shows the likelihood that our audience will recommend our brand to a family member or friend. A high score is important because it indicates that our customers are satisfied and willing to return, and we can attract new customers without investing in acquiring new ones.