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Businesses should monitor their performance whether it is profit, loss, bounce rate, conversion rate, and abandonment. Here are some common yet important metrics that need to be monitored; however, there are also some major KPIs to take into account to ensure retail success. By tracking a wider range of eCommerce KPIs, you can get a better understanding of how each part of your funnel performs.
The only way to measure the depth of the water is to dive into it. The same holds true in eCommerce stores, you cannot measure performance until you take a close look at the metrics that determine success. Therefore, here we will look at some of the KPIs that matter most to the success of your eCommerce store.
What is eCommerce KPI & Why It’s important?
ECommerce KPIs (key performance indicators) describe how you or your team are accomplishing your mission, goals, and objectives. It may be that some have a goal to enhance site traffic by 50%, or they may have a goal to increase sales.
A performance indicator could be the daily amount of traffic or which sources send visitors in accordance with this goal. With the KPIs of your store, you can better understand what’s happening in your store, and thus make better decisions about conversions, marketing, and sales. The purpose of the performance indicators is to determine whether the business is on track to meet its goals.
Important of KPIs in eCommerce Business
Any business, regardless of its size and shape, should have KPIs as the framework of its strategy and planning. The ability to measure progress over time is difficult without KPIs. There are many assumptions that are not supported by empirical evidence, including gut instinct, personal preference, and many others. You can use KPIs to find out more about your eCommerce store and customers, so you can plan it accordingly and make informed and strategic decisions.
It is, however, incorrect to rely on KPIs alone as the data you glean from them is more important. But it doesn’t mean you should switch to analyzing data because how you check and monitor everything in your store is what’s going to drive more sales.
By analyzing KPIs, you can share your valuable insights with your larger team and show them where they can improve. When it comes to eCommerce success, it’s true that knowing is better than finding. When you are aware of your weaknesses and where you can improve, there is no need to look back.
Top 5 most important eCommerce KPIs to track
In order to determine which metrics are important to track, we asked eCommerce experts for their opinions on the most important eCommerce KPIs. In this article, we will share what eCommerce experts have suggested based on their knowledge and preferences.
- Conversion rates
- Customer Lifetime Value (CLTV)
- Customer retention rate
- Average order value (AOV)
- Customer satisfaction
1. Conversion rate
No matter what kind of business you run, the conversion rates will always be at the top of the list. Basically, the conversion rate is the number of visitors to your website divided by the number of actions they take, such as signing up, contacting us, checking out, or buying and registering.
Your conversion rate will let you know how many people have visited and completed the checkout process on your website. The result is that you will be able to identify customers who are interested in your products or services, as well as people who are not.
Meanwhile, the conversion rate is an indicator of how successful your business strategies are when engaging your targeted audience through your eCommerce website. E-Commerce stores need a conversion rate in order to encourage customers to make purchases. It’s your strategies that influence your customers to purchase your products.
2. Customer Lifetime Value (CLTV)
In eCommerce, the customer lifetime value is the most important metric to track because no other metric can explain the entire performance of the business. The name indicates that if you appreciate your customers, they will definitely return the favor.
What does that mean? A customer can make or break a business, so for any business, they matter. As if the customer is the cornerstone of an eCommerce business’s success and its identity. Focusing on CLTV means caring for your customers and enhancing their relationship with your brand.
3. Customer retention rate
Most customers who make a purchase in an eCommerce store leave after one purchase and never return. In consequence, eCommerce store owners used to neglect them, which was unwise, since you must also care for them.
In order to ensure that customers who leave your store after one purchase will return again and make multiple purchases, it is important to consider customer retention. It is for this reason that you must think about customer retention and determine why your customers don’t make repeat purchases.
Even a small amount of customer retention can increase your profits with unexpected amounts and skyrocket the sales of your eCommerce store.
4. Average order value
Average order value tells you how much a customer typically spends on a single order. When it comes to KPIs that enhance your revenue, Average order value is one of the key way you can choose among any other factors.
The higher your AOV, the more you will be able to spend on acquiring new customers. In terms of acquisition costs, they can be performance-based, brand-based, or any other kind of marketing. Increase your average order value, and you will be able to acquire more customers.
Using eCommerce experts, you can easily track average order value, as well as revenue by channel, conversion rate, and top products. To make this happen, all you need to do is contact the eCommerce team.
5. Customer satisfaction
Customer satisfaction is a dream for any eCommerce store owner, and it must be delivered. By providing everything your customers requested, you enhance their overall experience, and that’s how you make them happy.
Customer satisfaction is nothing more than the positive experience that customers have with your eCommerce store, and it directly impacts your sales, revenue, and lifetime value. Make sure your customers are happy with your products and services in order to create a better customer experience.
Final words:
From enhancing brand awareness to building stores, managing an eCommerce store requires your efforts and planning. Having an understanding of the metrics above will assist you in measuring how well you perform those activities and point out areas where you can make improvements.
Do you need help measuring KPIs for your eCommerce store? M-connect Media can assist you. We have a team of eCommerce experts and marketers who can measure KPIs through different strategies and tools. Get in touch with us for more information!
