In any pursuit of success, you need to have certain skills and data that will help you do it with maximum accuracy. The e-commerce business works according to this principle – it likes not only hard work but also accurate numbers, high-quality analysis, and professionals who can take it to a new level. To achieve success in the field of online sales, first of all, it is necessary to be guided by such unshakable rules of trade as measuring project performance indicators (KPIs). Simply put, measure everything that can be measured, over time you will understand which of the indicators are important, and you will be able to correct them in time.
Of course, this business is not always amenable to beginners, and if you are not confident in your abilities, and skills, then most likely you are wondering how to make your dreams come true and who to ask for help. We have a solution for you! Turn to professionals from IT Delight, who have vast experience and knowledge base in the field of e-commerce business, to take your business to the next level and correctly track all the necessary metrics.
There are a huge number of indicators that can be analyzed, monitored, and taken into account when drawing up an online business development strategy or evaluating its economic component. Which ones rank the most in importance is up to you, but you need to understand the basics to successfully build the principles of successful sales. So if you are wondering how to properly track the effectiveness of electronic sales, this article turned up at your fingertips. Let’s quickly understand the features of KPI indicators together. And we’ll start with theory.
What is ECommerce KPIs?
KPIs (Key Performance Indicators) are key business indicators that give a clear idea of which processes play the most important role in the company’s activities and what needs to be done to achieve the business goals. KPI is used to evaluate the success of the main activities, and build a strategy and operational planning. They can also be used as a tool for measuring the performance of not only the company as a whole but also the activities of all employees.
KPI baselines should always be kept under tight control so that you can instantly respond to their deviation from the norm. Each category of business has its own set of KPIs to track, but the key metrics to analyze are the same for most e-commerce businesses. Let’s take a closer look at the top 10 metrics that can help you run your eCommerce business and increase sales.
10 ECommerce KPIs to Grow Your Sales
CR — in modern Internet marketing, this is the ability of visitors to turn into buyers or perform other actions of interest to us over a certain time.
To calculate this indicator, you need to divide the number of targeted actions by the number of all users, and then multiply by 100.
Abandoned Cart Ratio
If the user puts the product in the cart and did not make a purchase, it can be said that the user is interested in the product, but for some reason did not finish the job. There can be many reasons: from “just wanted to compare prices” to a complicated order verification process. But for any reason, it is possible to return the buyer to the site for further ordering, for example by sending him an email.
To calculate this indicator, you need to take the number of all purchases, then divide it by the number of completed carts, and then multiply this by 100.
Repeat Purchase Rate
The next and no less important indicator on our list. It will help you understand how many customers stay with you and make purchases over time in your store again.
Let’s calculate this indicator. Take all the users for the month, and subtract the number of customers. The next step is to divide into customers earlier this month and the last step is to multiply by 100.
Customer Lifetime Value
LTV or Lifetime Value is an indicator of the profit that a company receives for the entire time of interaction with a particular buyer. This is one of the most important marketing metrics, as it helps to determine the interest of each buyer in the company’s products, as well as calculate the profit that they can bring in the future.
To calculate this indicator, you need to subtract the amount spent on attracting it from the profit received from one client.
Customer Acquisition Cost
This indicator determines how much you pay for getting one new client. This way you will know for sure whether your investment in a client will pay off and which advertising moves are most effective in getting new customers.
There is a simple formula for calculating this indicator. You must divide the sum of absolutely all the money that you spent on inviting customers for a certain unit of time by the number of customers who responded and converted during this time.
Average Order Value
The next metric we’re going to show you is how much money customers spend on their orders over a given period. This is a very important metric because it will help you name an idea of what your customers are most interested in.
To calculate the average order value, you need to divide the total revenue by the number of orders.
To understand how effectively the landing pages of your site are composed and such measurements are needed. The bounce rate is the percentage of visitors who, after entering the page, do not take any action (do not go to another page, do not leave comments, do not add a product to their cart, etc.).
To calculate this metric, divide the total number of bounces by the number of visits.
Next, we want to introduce you to another important metric, which shows how many users no longer want to use the services of your company.
To calculate this figure for a month, you need to take the number of customers for the entire month, subtract from that number the customers at the beginning of the flow month, then divide that number. After that, it remains to multiply the result by 100.
The rate of opening letters is one of the main indicators of the quality of mailings. This is the first metric that tells you whether the mailing worked or not. It shows the number of users who opened the email. Although this is the most obvious, but not the most reliable indicator. Of course, it is good if it is high, and bad if it is very low.
To calculate this indicator, you need to divide the number of open letters by the number of sent ones and multiply by 100.
Email Conversion Rate
Email conversion rate refers to the percentage of subscribers who complete a targeted action or become a customer. This is an important metric because it shows you how effective your email campaign is. The more conversions your email has, the higher its conversion rate.
To calculate it, divide the number of conversions by the number of emails delivered and then multiply that number by 100.
That’s all. Today you learned which Ecommerce KPIs will help you achieve your online platform marketing goals. But be careful, tracking these indicators does not guarantee that your business will prosper. For your store to become even better every month, receiving different indicators, you must be able to correctly respond to changes. Therefore, it is recommended to contact specialists in this matter, so as not to do everything intuitively and be sure of the positive results of the work.