Running an ecommerce business generates a ton of data, and it can feel overwhelming to figure out which numbers to pay attention to. From website traffic to customer demographics, there are so many metrics to consider. But don't worry. Not all metrics are equally important! It's all about knowing which metrics matter most for your specific ecommerce business. By focusing on the right analytics, you'll be able to make intelligent decisions that drive your business forward and help you reach your goals.
Here are seven key metrics advise our clients to keep an eye on when measuring analytics for ecommerce.
- Website Traffic and User Behavior: Understanding how users interact with the website, including pageviews, time on site, and bounce rate, can help identify opportunities to optimize the user experience and increase conversions.
- Conversion Rate: Measuring the percentage of website visitors who make a purchase helps evaluate the effectiveness of marketing and sales efforts.
- Average Order Value (AOV): AOV measures the average amount spent per transaction, helping to determine the value of the customer base and inform pricing strategies.
- Customer Acquisition Cost (CAC): CAC is the cost of acquiring a new customer and helps evaluate the efficiency of marketing campaigns.
- Lifetime Value (LTV): LTV measures the total value a customer brings to the business over their relationship and is used to prioritize acquisition and retention efforts.
- Product Performance: Analyzing the performance of individual products can help identify best-sellers and underperforming items, inform product development and purchasing decisions, and optimize pricing.
- Cart and Checkout Abandonment: Understanding why customers abandon their carts or leave the checkout process can help identify pain points and improve the purchase experience.
Website Traffic and User Behavior
Tracking website traffic and user behavior are crucial to understanding your customers and how they interact with your website. By keeping an eye on these metrics, you'll get a better sense of what's working and what's not, so you can make improvements that lead to a better customer experience. It's all about making your website as user-friendly as possible! Visitors who have a positive experience on your website are more likely to convert into paying customers. So, tracking website traffic and user behavior can help you see what's resonating with your audience and make changes that drive growth and revenue for your ecommerce business.
Monitor your competition
Keeping an eye on your competition is a great way to stay ahead of the game and stay motivated to improve your ecommerce business constantly. Monitoring your competitors can give you valuable insights into what's working well for them and what you can do to differentiate yourself and stand out in the market. It doesn't have to be an intense, time-consuming process either! Simply taking a glance at their websites and social media profiles from time to time can give you a good idea of what they're up to. And who knows, you may even pick up some new ideas to try for your own business! So, go ahead and give it a shot, and see how monitoring your competition can help boost your ecommerce business to the next level.
Track your Average Order Value (AOV)
Tracking your Average Order Value (AOV) is a super important metric for ecommerce businesses. It gives you an idea of how much each customer is spending on average every time they make a purchase. By keeping an eye on AOV, you can see how changes to your pricing, product offerings, and marketing strategies are impacting how much customers are spending. A higher AOV is generally a good sign that your customers are purchasing more items or spending more money on individual items. On the other hand, a lower AOV may indicate that you need to re-evaluate your pricing or product offerings. So, tracking AOV is a simple but powerful way to get a pulse on the health of your ecommerce business and make informed decisions that drive growth.
Track Customer Acquisition Cost (CAC)
Tracking your Customer Acquisition Cost (CAC) is essential for ecommerce businesses because it helps you understand how much it costs to acquire new customers. This metric takes into account all the expenses involved in attracting new customers, such as advertising, marketing, and sales expenses. By keeping an eye on CAC, you can see if your customer acquisition efforts are cost-effective and make adjustments if necessary. For example, suppose your CAC is high. In that case, you may want to re-evaluate your marketing strategies and see if there are ways to attract new customers more efficiently. On the other hand, a low CAC can indicate that your customer acquisition efforts are effective and efficient. So, tracking CAC is a great way to ensure that you're making the most of your resources and acquiring new customers in the most cost-effective way possible.
Track your Product Performance
Tracking product performance is essential for ecommerce businesses, and it's a metric that you don't want to overlook. On the surface, product performance is all about seeing which products are selling well and which ones aren't. But it goes beyond that. By tracking product performance, you can also see which products attract the most attention, which drive the most sales, and which contribute the most to your bottom line. This information is invaluable because it helps you make informed decisions about which products to keep in stock, which ones to discount, and which ones to discontinue. Additionally, tracking product performance can also give you insight into customer preferences and trends, which can help you make better decisions about what products to offer. So, don't underestimate the importance of tracking product performance – it's critical to running a successful ecommerce business.
Track Cart and Checkout Abandonment
We save this metric for last to leave you with a concerning stat in cart abandonment, representing a significant revenue loss if you are not actively monitoring and countering its results. The estimated loss of revenue from abandoned carts can vary widely depending on several factors, including the size and type of business, the customer base, and the average order value. However, on average, it's estimated that the global average cart abandonment rate is around 69%, which represents a significant loss of potential revenue for ecommerce businesses.
This means that for every 100 customers who add items to their carts, 69 do not complete the purchase, resulting in an estimated loss of revenue of around 69%. This can add up to a significant amount, especially for businesses with a high traffic volume and a large customer base.
It's important to note that these estimates are just that - estimates. The actual loss of revenue from abandoned carts can vary widely depending on the specifics of each business and the reasons behind the abandonments. By understanding the reasons behind cart abandonments and taking steps to reduce them, ecommerce businesses can improve their conversion rates and increase their revenue.
In conclusion, tracking the right analytics for ecommerce is crucial for the success of any B2C business. By keeping an eye on key metrics like website traffic and user behavior, conversion rate, pricing, customer acquisition cost, lifetime value, and product performance, you can gain a deep understanding of how your business is performing and make informed decisions to drive growth and success. Remember, the more data you have, the better equipped you'll be to make informed decisions that drive your business forward. So, don't hesitate to start tracking these analytics for ecommerce today – your future self will thank you for it!
Incidentally, if you're looking for an ecommerce analytics dashboard that integrates all your important metrics across multiple sources, look no further. Remark can help you integrate almost any data source and display it as real-time actionable that would make Tony Stark salivate. Schedule a free evaluation and talk to us about how we can help.
Baymard Institute: Baymard Institute is a research firm that specializes in ecommerce user experience and conversion rate optimization. They have published several studies on cart abandonment rates, including "The State of Cart Abandonment in Ecommerce 2020," which estimated the global average cart abandonment rate to be around 69%.
SaleCycle: SaleCycle is a customer engagement platform that specializes in abandoned cart recovery. They have published several studies on cart abandonment rates, including "The Global Cart Abandonment Report," which estimated the global average cart abandonment rate to be around 70%.
Barilliance: Barilliance is a conversion optimization platform that specializes in personalized ecommerce experiences. They have published several studies on cart abandonment rates, including "The Ultimate Guide to Cart Abandonment in Ecommerce," which estimated the global average cart abandonment rate to be around 69%.
Criteo: Criteo is a data-driven marketing platform that specializes in ecommerce and digital advertising. They have published several studies on cart abandonment rates, including "The State of Cart Abandonment in Ecommerce 2021," which estimated the global average cart abandonment rate to be around 69%.