Designing and creating a profitable business model is one of the keys to the success of any eCommercebut to know its profitability it is essential always measure the results and know where to put the efforts; ultimately know the main KPIs or metrics in eCommerce.
Running an online store can be very hard work. Many times a lot of money and time is invested in increasing the number of visits, but… How are these results measured? We are going to review the top 10 eCommerce metrics that serve to get to know users better of an online store and optimize sales, and which are added to others that are also relevant, such as .
1. The cost of acquiring a customer (CAC)
This e-commerce metric will serve to obtain the average cost of each customer and also to know the profitability of marketing actions. The customer acquisition cost It is calculated by dividing everything invested in sales (any action that aims to attract more sales) and marketing during a certain period by the number of clients that have been obtained during that time.
2. Customer Lifecycle Value (CLTV)
It is one of the most important eCommerce metrics. The customer lifetime value (Customer LifeTime Value) represents the total income that the user has generated in an electronic commerce since his registration. It is determined by multiplying the average earnings that the client has generated in a year by the number of years in which he is a client, subtracting the acquisition cost (ACC).
3. Metrics in eCommerce: customer satisfaction
There are multiple tools that serve to interpret the tastes of customers through psychological graphs, search history or demographic studies, among others. But beyond these statistics, the Customer Service is a valuable source of suggestions and the best indicator of the Customer satisfaction of an eCommerce.
The Customer Service advisor must have complete knowledge of the products offered in the online store to meet the needs of buyers. Once the products that arouse the most interest have been identified, a system can also be implemented that will help offer them products and services related to their purchases.
4. The conversion rate (CR)
In general, when someone refers to obtaining buyers from an online store, they usually talk about the . These metrics in eCommerce are used to express the number of visitors that were converted to a percentage. buyers. The is one of the main indicators of the success of an eCommerce.
5. The Return on Investment (ROI)
Did you know that it is more profitable to keep a customer than to get a new one? That’s what it’s for to have a good eCommerce metrics dashboard. Many online stores make the mistake of calculating the return on investment of your taking as a sample the data of a single sale. In order to know exactly the economic value that a client represents for the company, it is necessary to calculate the ROI based on all the purchases that the user has made, that is, the customer lifetime value (CLTV).
More important metrics for eCommerce
On the Internet everything can be measured and it is precisely one of the most exciting points of the digital world. A good marketer consults daily the performance of campaigns, accesses eCommerce platforms to give daily monitoring of metrics, see if the “back to school” campaign is working… The data is nice, but sometimes this can cause us to focus on some metrics that are not very relevant and lose sight of the most relevant ones for our business. Next we are going to focus on the most actionable metrics in eCommerce.
Death to Vanity Metrics in eCommerce
“Vanity Metrics” or vanity metrics is an Anglo-Saxon term that startups often use to refer to low-value metrics for an eCommerce. For example, an eCommerce manager can boast of the number of visits or page views, a classic in Analytics. However, if we want actionable metrics in eCommerce must go further.
The number of visits if you do not cross it with the conversion rate is meaningless. You may be having low-quality traffic and believe that you are doing important Branding work. Other vanity metric clear could be Twitter followers or Facebook likes.
Another slightly more complex example is to consider the global conversion rate to qualify an eCommerce. It’s not enough, you have to evaluate the conversion rates for each of the traffic sources to fully understand what is happening.
Every industry is a world and you need to find the actionable eCommerce metrics that best fit your industry. Let’s take a case from the “Pharmacy” sector: if my eCommerce is well positioned for drugs, I’m sure I’ll get a large number of visits, but many will be inquiries about dosage, side effects of the drug in question… What is the result? Low conversion rates. An interpretation error would lead us to think that we have poor usability when it really is a matter of the type of traffic, which comes to us through medications and query searches. how does that become KPIs in actionable metrics in eCommerce? Try to position myself most transactional keywords.
eCommerce Metrics
Depending on the case, there may be several actionable metrics in eCommerce. Here I highlight some of them:
6. Conversion rate according to traffic source
We must analyze the conversion rate (Conversion Rate) for each of the sources and see its evolution. Variations according to the eCommerce handle incentives, according to temporalities or even weekdays. For example, it is not a myth that Mondays tend to increase conversion rates.
7. % of new visitors VS recurring
A healthy eCommerce must grow in recurring users. Recurrence is one of the keys to the profitability of an eCommerce, in addition to managing affordable CAC’s for my business. If users don’t come back or I don’t have a worked CRM systemI’m going to have trouble surviving.
8. Evolution of direct traffic
An increase in direct traffic means greater brand recognition. Users who already know me should buy more from me. If I have a low % conversion in this section, I may have usability issues.
9. Value of the average basket
It is very important to see the evolution of the average basket or AOV (Average Order Value). For example, discounts can lower the Average ticket; nevertheless, working well the cross sell and the we can get buyers to add more than one product in the same transaction.
10. New registrations
Myopia and lack of vision lead us to think of generating sales by the shortest way: from the click to the product page. A well-crafted marketing strategy can be one of the most important assets of eCommerce. We definitely recommend optimizing the conversion funnel to record.
These are some actionable metrics that I consider most relevant; which ones are for you? The important thing is to know how to manage and identify those that are relevant for each eCommerce and define KPI’s that lead to actions and therefore good results for my business.
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