Top Analytics to Focus on to Grow Your eCommerce Store
There’s only one proven way to go from strength to strength in e-commerce marketing, and that’s through constant measurement and improvement. Tracking, measuring, and continually improving your marketing campaign allows you to identify and fix weak links in your strategies. It also allows you to compete favorably within your industry and helps you stay on top of industry trends. This ultimately leads to more traffic, leads, sales, and profits.
So, which eCommerce analytics metrics do you need to track? Well, the list is often a long one. However, you should start by focusing on the most important Key Performance Indicators (KPIs).
1. Conversion rate
A conversion rate is the frequency with which you turn visitors into customers, as a percentage. In other words, if 100 people visit your eCommerce store, how many eventually buy something? This figure will tell you the success of your marketing campaigns. The average conversion rate for eCommerce stores is 4%, though any figure between 2%-4% is usually good.
2. Customer lifetime value (CLTV/LTV)
Customer lifetime value is the total worth to a business of the average customer over the whole period of that customer relationship. Many marketing experts consider it the most important metric for assessing business health. This is because it directly impacts many other metrics, including the conversion rate. A high CLTV often means low operational costs and high-profit margins. The opposite is also true, a low CLTV will cost you more, therefore decreasing your profit margins.
3. Customer retention rate
Your customer retention rate (CRR) is the proportion of customers that keep buying from your brand at the end of a given period, usually one year. To work this out, look at how many customers you have now relative to the total number of customers you had at the beginning of the period. For instance, if you start the year with 100 customers but end with only 20 customers (excluding new customers), you have a 20% CRR. The average CRR for eCommerce stores is 25%.
4. Average order value (AOV)
The average order value is the average amount of money each customer spends in your store per transaction. Although this may seem out of your control, the AOV is arguably the best way to evaluate the success of your upselling and reselling campaigns. A high average order value signifies that your upselling and cross-selling campaigns are doing very well.
5. Cart abandonment rate
The shopping cart abandonment rate is a measure of shopping store resistance. It tells you the ease or difficulty of shopping on your site. A high cart abandonment rate means your store is highly resistant, while a low rate means customers find it easy to shop in your store. You should aim for a 20% or lower abandonment rate.
6. Return on Ad Spend (ROAS)
The return on advertising spend is a Ten Tips To Hire An SEO Agency that uses online advertising channels, like Google and social media advertising. This lets you assess the effectiveness of the ad campaigns, allowing you to adjust your strategies accordingly. Many marketing experts recommend striving for a 4:1 ROAS, meaning you should aim for a $4 return for every $1 spent on advertising.
7. Net profit
Finally, the importance of the net profit metric is obvious. Businesses exist first and foremost to earn profits on their investment. Therefore, a higher net profit means you’re on the right track. Just remember that net profits tie back to almost all other eCommerce KPIs, including ROAS, cart abandonment rate, average order value (and the number of orders), and your conversion rate.
Ready to Start?
The good news is that all of the above metrics are trackable right now using Google Analytics, Kissmetrics, the Adobe Marketing Cloud, or any other metric tracking software.