15 Key Metrics for
Ecommerce Companies

Sales Conversion
Rate

If a thousand people visit a website per month, but only 1 among
them makes a purchase, then the sales conversion rate is 1/1000
or 0.001 (very low!).
Even if you are having enough sales and there’s an increase in
customer visits, a low sales conversion rate indicates that there
are glitches in your e-commerce platform which are driving away
a huge percentage of visitors.

Customer
Acquisition Cost

Customer acquisition cost (CAC) is a metric that holds
importance to the stakeholders and the internal marketing team.
It can be calculated by dividing the total spending on marketing
and advertisement over a period of time by the number of
customers acquired during that period.

Marketing campaigns take time to show results about CAC.
Advertisements running in a particular month might draw more
customers in the upcoming months due to late customer reaction,
or a more suitable time for the advertisement from customer’s
point of view.

Revenue by
Traffic Source

Marketing efforts can got to waste, if you don’t know how to plan
your marketing budget.
Revenue based on traffic sources can reveal which sources are
bringing in more hits, and which are gaining higher conversion
rates.

Such numbers can help in understanding which clicks are more
valuable and which ones require more input payment.
However, certain sources like referrals and organic hits can be
difficult to track.

New vs Returning
Customers

Retaining old customers is as important as getting new
customers.
If old customers are happy with your website’s user experience,
they can spread the word and bring in more prospects for your e-
commerce business.

Customer retention increases the lifetime value of customers.
Customer acquisition costs can increase if you are focusing on a
large quantity of customers, rather than the quality.
Conversion figures of new vs returning customers need to be
tracked to make sure that the existing customers are happy.

Conversion based
on device type

People access the Internet with a variety of devices today.
Among these devices, mobile devices are the fastest growing
means to surf the web.
Conversion rates based on device types can help in
understanding whether your site needs optimization based on
device types, screen size, or for areas with slower internet
connectivity.

Tracking card abandonment

Cart abandonment is the biggest nightmare for all e-commerce
companies.
It can be brought down by improving the customer experience at
stages where customers are leaving interaction with the
platform.

For example, a location tracking service can be used in place of
making a customer type their entire address and help in
lowering down cart abandonment at the stage of address fill-up.

Percentage of
Returning Customers

Returning customers are a boon for the e-commerce sector.
This is because you do not have to spend extra money to re-
acquire them, and also because they have got accustomed to
using your e-commerce platform to purchase products.

Tracking the number of returning customers can indicate how
many customers can think of using your website for a longer run.

Average
Order Value

The average order value(AOV) is another metric that can help in
several decision-making procedures.
It is calculated by dividing the total revenue by the number of
orders.

Decisions like bearing the shipping cost or including it in the
customer’s business invoice can depend on the average order
value.
AOV also helps in deciding on your future marketing strategies
and how to focus on increasing per order value.

Lifetime Value
of the Customer

Customer Lifetime Value(CLV) is a complex metric that helps in
computing the revenue brought in by a customer, after deducing
the acquisition costs.
It also takes into account factors like number of visits and average
spends per visit by a customer.
This metric is used mainly for targeted marketing to increase CLV
for existing customers.

Customer
Retention Rate

Customer retention rate helps companies in understanding the
fraction of users of a website as regular or one-time users.
The higher the percentage of regular users, the better it is for the
e-commerce platform.

Average order
size

Average order size deals with the number of items purchased by
customers in a single order.
A higher figure would mean that cross-selling efforts and
recommendation engine results are paying off, and people are
adding more items to a single order.
Higher average order size reduces shipping costs and increases
profitability.

Email Engagement
Metrics

Email engagement still remains one of the cheapest and best ways
to engage more customers.
This involves sending personal mails to customers and prospects a
product or product catalogue.

To make the best out of email engagement and collect higher
metrics, it is important to understand what kind of emails are
driving customers to the e-commerce platform.
This also includes if the tone and voice in the email needs to be
changed or if there’s a requirement to include visual content like
images, short videos to the email draft.

Google Search
Performance

Performance of an e-commerce platform on Google Search
reflects how well its website is SEO optimized, and is able to drive
organic hits.
There are certain terms which are important in this aspect.

Number of impressions: It is the number of times a website URL
was shown on the search engine results page (SERP).
Clicks: It refers to the number of people who clicked on the links
to a website that appeared on the search engine results page.
Both of these metrics are valuable parameters for a marketing
team to compute a website’s Google Search Performance.

Social Media
Conversion Rate

Social Media Conversion Rate measures the number of customers
who reached out an e-commerce platform from advertisements
on social media platforms, to make a sale.

Number of
Transactions

Number of daily, hourly, weekly, monthly or yearly transactions
can show patterns in sales and/or purchase behavior of an e-
commerce platform.
This includes trends like the time of the day that registers highest
traffic or months that witness slumped sales and much more.

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