Successful e-commerce stores not only understand the importance of reading the metrics, but how to properly use the data to drive more sales.
With global e-commerce sales continuing to reach new heights, keeping tabs on your store metrics needs to be a priority. Not all metrics carry the same weight, though, and with so much valuable information, it’s important to focus on what matters most.
Properly leveraging this data is the key to growing your online business and getting the most out of your investment.
We’ve narrowed it down to the top 6 metrics you should focus on and optimize in order to maximize your growth.
Your conversion rate serves as a key indicator for the overall success of your store and marketing plan. This number is calculated by dividing the number sales by the number of visitors that land on your website.
Though the average conversion rate hovers just slightly below 2%, it’s important to note that this percentage varies greatly across different types of products and different types of marketing.
In today’s fast pace e-commerce world, it’s more important than ever to make sure you’re implementing a CRO (Conversion Rate Optimization) strategy. Some best practices include:
- Improving page load-speed times
- High-quality imagery that brings the product to life for the browser
- Simple checkout that utilizes digital wallets
- Live Chat engagement on product landing pages
- Add to Cart button above the fold
A sites bounce rate is another important data point that relates to your sales performance. A “bounce” occurs when someone lands to on your website and leaves without venturing to a second page.
According to BigCommerce, an average e-commerce store bounce rate sits at 45.68% with varying percentages by industry.
If you’re seeing a bounce rate significantly higher, you may be looking at some deeper issues with your landing pages or site as a whole.
Methods of improving bounce rates follow many of the same principles of CRO, in the sense that you’re looking at ways to improve user experience on your site. How can you do this?
- Improve load times
- Add more engaging content
- Guide users to other pages with backlinks/suggestions
Simply put, the lower your bounce rate the higher your opportunity for closing sales will be.
Average Order Value
Your Average Order Value measures about how much your customers are typically spending when they complete a purchase.
A great way to increase your overall sales in addition to acquiring new customers is to find ways to gently encourage shoppers to spend more per purchase.
There are many subtle ways to do this that cost nothing to implement, including:
- Cross selling related products
- Offering free shipping beyond a certain threshold
- Selling bundled products at a slight discount
- Loyalty programs
Cost Per Acquisition
Understanding how much you spend acquiring customers is a vital part of your success. While there is no benchmark “good” CPA, at the end of the day, if you’re spending more per customer than the customer is spending per order you are operating at a loss.
When looking into CPA, you must realize there are several different mediums from which your acquisitions are coming through. These include:
Each medium operates differently, and monitoring each will help you to maximize your profitability. By understanding which is most efficient, you can funnel more of your marketing budget there and find ways to improve in areas that are lacking.
If you’re having issues with high CPAs, here are some ways you can improve:
- Find ways to take advantage of free listings
- Segmenting paid search/social campaigns to better target higher intent customers
- Track sales properly by utilizing UTM tags across all marketing channels
Shopping Cart Abandonment Rate
Cart abandonments can be difficult to accept, but they are much more common than one would think. According to Barilliance, 78% of e-commerce shoppers ultimately abandon their cart.
With this being such a regular occurrence, the opportunity to gain valuable insight and get some of these sales back is easy to see. But how can you make the most of this information to improve?
To start, you should evaluate your checkout process to ensure it is as smooth as possible. Here are some possible reasons for cart abandonment that you should review:
- Unexpected additional fees/high shipping rates
- Ensure a secure checkout by keeping your SSL up-to-date
- Allow users to checkout as a guest without logging in or creating an account
- Long checkout process that is overly complex
Once you’ve reviewed and acted upon these, you should consider ways of re-engaging the customer or maintaining trust throughout the checkout process. Useful methods include:
- Display and/or e-mail remarketing
- Allowing customers to create wish-lists
- Offering several payment methods
- Time-sensitive discounts
Customer Lifetime Value
Some would say this is the single most important metric you should be aware of. Customer Lifetime Value estimates how much you can expect to earn in sales per customer over the lifetime of your relationship with them.
This data can help you make some big picture decisions for a number of different reasons:
- Store owners can determine how much budget to allocate towards acquiring customers
- You can develop long-term strategies for re-engaging customers
- It helps you better understand your audience so you can target new customers
- It has a direct impact on your store’s revenue
There are different schools of thought when it comes to calculating this metric. Here’s a great example via Neil Patel.
Additionally, many e-commerce platforms, including BigCommerce, offer tools to help you better leverage this metric in your day-to-day optimization.
While there are many important pieces of data to follow in your e-commerce store, there are 6 that should be at the top of your list to monitor:
- Conversion rate
- Bounce rate
- Average order value
- Cost per acquisition
- Shopping cart abandonment rate
- Customer lifetime value
Each of these metrics tells its own story about your store and how it’s performing. Leveraging each one can help you push your brand further than ever before.