eCommerce has experienced unprecedented growth in recent years, with more and more companies deciding to launch into the digital world. In the world of eCommerce, it is essential to know how your online store is working to make more informed decisions about how to optimize it to grow your online business. However, it can be difficult to know which metrics you should follow to measure your eCommerce’s performance.
In this article we present 5 key metrics that every eCommerce owner should know to track their business. From your website traffic to conversion rate, these metrics will let you understand how your online store is working and what areas need to be improved to optimize your results. ¡ Read on and find out how to measure the performance of your online store with these 5 essential metrics!
Conversion rate is a key metric that measures the effectiveness of your website and your marketing strategies in turning visitors into customers. A high rate indicates that you’re doing a good job of attracting the right customers and getting them to buy.
To calculate the conversion rate, divide the total number of purchases made by the total number of visitors to your website and then multiply by 100 to get a percentage. For example, if your online store receives 1,000 visitors a month and makes 50 sales over the same period, then your conversion rate would be 5%.
It’s important to note that the conversion rate may vary depending on the type of product or service you offer, as well as the traffic you receive. It is advisable to track this metric regularly to evaluate the effectiveness of your strategies and make changes if necessary to improve it.
Some factors that can affect the conversion rate are website design, ease of payment process, reviews and positive testimonials, competitive prices and special promotions. By identifying what aspects are negatively affecting your conversion rate, you can take steps to address them and improve the overall performance of your online store.
The average order value is another key metric that lets you see how much money, on average, each customer is spending on your online store per order.
To calculate the average order value, divide the total revenue by the total number of orders. For example, if your online store generates 10,000€ in revenue and makes 100 orders during a given month, then the average order value would be 100€.
It’s important to note that this metric can vary depending on the type of product or service you offer and the pricing strategies you use. If your average order value is low, you may consider offering discounts or incentives to increase it. On the other hand, if it’s high, you can consider adjusting your pricing strategies to maximize profits.
In addition to helping, you better understand your customers' buying habits and how your pricing strategies are performing, Tracking the average order value metric can also help you identify opportunities to improve the overall profitability of your online store.
Cart abandonment occurs when a customer adds products to their shopping cart in your online store but does not complete the purchase and leaves the website before the process is finished.
Cart abandonment is an important metric because it can indicate problems in the checkout process or problems with the overall user experience on your website. To reduce the dropout rate, it is important to identify the underlying causes and take action to address them.
Some common reasons customers leave their carts are unexpected extra costs (such as shipping costs), complications in the checkout process, problems with website security, lack of payment options or simply changes of opinion.
To reduce the cart abandonment rate, you may consider adding features such as clear and easy options to pay, offering incentives to complete a purchase (such as discounts or free shipping), improve website navigation and design to make it easier and more intuitive for customers. It is also important to ensure that the process is safe and reliable. By taking steps to reduce the cart abandonment rate, you can increase your sales and improve overall customer satisfaction.
Website traffic refers to the number of visitors to your website in each period. It’s an important metric because it indicates the reach and popularity of your website.
There are different types of traffic, such as organic traffic (when users come to your site through search engines), direct traffic (when users type the URL directly into their browser) and referred traffic (when users arrive at your site from another website).
To increase website traffic, you can use various digital marketing strategies, such as search engine optimization (SEO) to improve your ranking in organic search results, online advertising, social media and email marketing. It’s also important to create relevant and useful content for your prospects that helps them find solutions to their needs and interests.
It’s important to regularly monitor website traffic and analyze trends to identify areas where you can improve. For example, if you notice a decrease in organic traffic, it may be necessary to adjust your SEO strategy or update your content to make it more relevant and useful to your prospects.
By increasing website traffic, you can increase your brand’s visibility, generate more sales opportunities, and improve overall customer satisfaction.
Return on ad spend (ROI) is a metric that indicates the financial performance of your advertising campaigns. It is calculated by dividing the profit generated by the advertising campaign by the total cost of the campaign and multiplying the result by 100.
A positive ROI means that the advertising campaign generated more revenue than it cost, while a negative ROI indicates otherwise. It’s important to regularly monitor ROI to make sure you’re getting a good return on your advertising investments.
To improve ROI, you can use various strategies, such as targeting your target audience with relevant and personalized messages, choosing the right advertising channels to reach your desired audience, and optimizing your ads to maximize their impact.
You can also consider A/B testing to compare different versions of your ads and determine what works best. By adjusting as needed and regularly monitoring your metrics, you can continuously improve your ROI and get a higher ROI on your advertising efforts.