Introduction
As an eCommerce entrepreneur, you have a lot on your plate. You’re trying to grow a great business that can withstand the test of time. You’re looking for ways to improve customer experience and increase revenues. And if you want to do those things well, then you need to track the right metrics to determine which areas of your business are working, and where improvements can be made.
Key Metrics to Track
The key is to track the metrics that matter most. You’ll need to analyze and understand those to make strategic decisions about how your business is doing.
Some metrics aren’t as crucial but can give you additional information about what’s going on with your customers, like their age group and gender. And then some metrics are just downright useless and should be eliminated from any dashboard or report.
1. Website bounce rate
The bounce rate is the level of guests who enter your website and immediately leave without interacting with the content or clicking on any links. It's a valuable metric for measuring how well a website converts visitors into customers.
If a visitor bounces, it means they didn't find what they were looking for on your website, which could suggest that they're not seeing enough relevant information at first glance to convince them to stick around longer or continue browsing through other pages.
As you build out your analytics package and start collecting data from multiple sources (such as Google Analytics), consider bounce rates among all other metrics when determining whether or not there are issues with user engagement across different pages on your site.
2. Click-through Rate
Click-through rate (CTR) is the figure of clicks on a link divided by the number of times that connection has been viewed. It’s one of the essential metrics for eCommerce businesses because it helps you identify how effective your marketing efforts are and understand where to invest more time and money.
If you have a high click-through rate but a low conversion rate, then it could be that your landing page or product page isn’t converting well enough for users to take action. If you've got a low click-through rate but a high conversion rate, then it could be that users aren’t interested in clicking through to find out more about what they just saw on social media or other channels.
3. Percentage of completion
Percentage of completion is a metric that tracks how many visitors complete a series of steps on your site.
It's important to note that completion percentage is not used as a marketing metric since it doesn't account for traffic or leads generated by specific marketing campaigns (it only measures how many people complete particular actions).
In any case, there are substitute ways you can integrate this data into your analytics, so you can see what areas need to be improved upon to increase our ROI from our ad spend.
4. Cost Per Acquisition
Cost per acquisition (CPA) is the cost of acquiring a new customer. The calculation is simple: divide the total marketing cost by the total number of conversions.
Cost per acquisition can help you improve your business in two ways:
- Improve your product and service offerings to increase conversion rates and decrease CPA. For example, if you sell running shoes, but people are more likely to buy them at an electronics store than on your website, there's something wrong with how your business model works. You should either change your product offering or change where customers purchase it - perhaps try selling through Amazon?
- Improve how practical your marketing activities are at generating high-quality leads and converting them into sales or paying customers. In this case, there may be nothing wrong with what you're selling. Still, if all of these potential customers aren't converting into actual sales, that would indicate that one or more aspects of how this campaign was run could be improved for future endeavors.
5. Customer Lifetime Value
Customer lifetime value (CLV) is the projected sum of all future revenue from a customer. It’s calculated by multiplying your average customer lifetime and the average revenue per customer. This metric considers any churn you have, so it can help you determine when it’s time to increase spending on acquisition channels like search engine marketing (SEM).
The CLV metric gives you an idea of how much each person has spent with you and their lifetime value going forward. This can help inform your decisions in crucial areas, such as:
- How much should I spend acquiring new customers?
- How do I get my existing customers to spend more with me?
- When should I stop spending money on ads that aren't generating sales?
6. Number and Type of Comments/Questions
The number of customer comments or questions you receive is an important metric, and it's a decent mark of how well your item is working for them; the more they comment on our items, the almost certain they are to buy again.
When it comes to analyzing this metric, there are two main things to look at:
- How many comments/questions do you usually get?
- What types of questions do people ask?
7. Your Time
The most significant asset is your time, and it’s the only thing you can’t get back. Time is certainly not a sustainable asset, you can't make more of it, but you can decide how you spend it.
You already know this intuitively: if you don’t manage your time well, then no money or energy will be left to pursue your dream business.
Conclusion
You can quickly determine what’s working and needs improvement with the right metrics. It is essential to understand that your time is valuable, so don't spend too much on a particular metric if you do not see good results.
