To succeed in the world of eCommerce, we need to correctly interpret our key metrics and what they tell us. Making decisions based on data is the best way to optimize strategies. If we didn’t take them into consideration, we wouldn’t know what works, what doesn’t, how we should proceed to improve our performance, and what is the best way to launch ecommerce website.
The first step to optimizing the performance of our eCommerce site is to have well-defined KPIs. For this, we must be clear about what we want to measure, how we plan to do it, and what goals we intend to achieve. If in the event this does not happen, we should be skillful enough to adjust what is necessary on the fly.
However, there are numerous variables that will help you lead the way from the beginning. Here are four key metrics to boost your eCommerce.
1. Targeted conversion rate
Conversion rate is a clear and simple metric: It is the percentage of site visitors who decide to make a purchase. It is calculated by taking the total number of visits to the web that made a payment divided by the total number of people who only visited the site.
While conversion rate is a general success metric, we can dig deeper into this metric with the following modifications:
- Conversions by traffic source, that is, where the visits come from. Thanks to Facebook, Bing, Google, and even Reddit we can find out their origin, focusing on smart investments in digital campaigns to attract people from certain channels.
- Conversions by type of device used to access our website. More and more mobile users are shopping from their portable devices, widening the gap between desktop computers. Analyzing where they come from to improve their shopping experience is critical to success.
- Conversions of new visitors and returning visitors. Conversions from returning visitors are generally higher as they are familiar with the platform, aware of the brand, and willing to make a purchase. Knowing this, we can focus on investing in acquisition and retargeting campaigns.
2. Segmented income
We must segment our income in the same way that we segment conversions to know in-depth if there are sites that have peak visits but are not selling anything. There are several ways to see the different sources of traffic and if they contribute to our commercial objectives, such as organic growth, email campaigns, and referrals from social networks or blogs.
Segmenting our revenue gives us insight into how spending trends change depending on the origin of the traffic. With this information we can replicate what happens in certain successful channels, to better invest time and resources.
3. Abandonment of the conversion funnel
During the online purchase process, many users often leave the process before making the purchase, leaving the product in the shopping cart. Generally, e-commerces have reminders that notify the user that they have not yet completed their transaction, trying to obtain the sale.
However, we must investigate the funnel to see where customers leave the process during their purchase experience, trying to find fault. Manually we can do this by checking the flow of visitors to the site, or we can add a conversion tunnel in Google Analytics.
4. Average order value
The AOV (Average Order Value) is the sum of the value of all orders (of a certain period) divided by the total number of orders placed in that period. For example, if we have total sales of $25,000 from 760 orders, revenue (25k) divided by orders (760) equals a rounded AOV of $33.
Knowing this figure is necessary to understand the value of customers and helps improve growth strategies. According to e-commerce experts, there are three ways to grow AOV: add more customers, get repeat customers, and increase average order value.
In conclusion, gathering all this information at least once a month allows us to have a macro image of our online business, optimizing our campaign tools to analyze brand performance with a clear purpose.