(This is a guest post from Emma MIiller, Senior Editor at Bizzmark blog, who’s interested in digital marketing, social media, and the latest trends.)
What is the secret ingredient for building a successful online store? Is it a solid digital marketing strategy? Perfect customer support? High-quality products? Maybe it’s a functional website?
These factors do matter, but there is one thing that can make or break your online presence. Yep, I’m talking about metrics. To succeed in the competitive online market, you need to set measurable goals, choose the right metrics to track, and analyze your online performance continuously.
While there is a bunch of metrics to track, I picked those that are directly related to your store’s growth.
Before we start discussing sales-related metrics, we first need to pay attention to marketing KPIs.
Your marketing tactics are directly related to your sales, as they increase your online store’s exposure, drive more people to your site, build trust with them, and guide them towards the bottom of the sales funnel.
Here are some of the most significant marketing KPIs to track:
- Website traffic
- Website traffic by source
- The exit rate
- Time on site
- The bounce rate
- Total conversions
- Pages per visit
- The average session duration
- Traffic sources
- The subscriber growth rate
- The email open rate
- The email CTR
- Social media engagement
- Cost per conversion
- The average position
- PPC traffic volume
However, keeping pace with loads of different goals, metrics, and tools can be extremely confusing. This is where reporting tools can help, as they integrate with all key digital marketing tools. For example, with Reportz you can combine key SEO tools like Google Analytics, SEMrush, Serpstat, or Rank Ranger to observe your KPIs on one dashboard and create comprehensive SEO reports.
Percentage of Returning Customers
Your goal as an online marketer is not only to attract people to your store and get them to buy from you, but also to inspire them to come back. Return customers are important for numerous reasons:
- They’re willing to buy from you again and generally spend more money than first-time customers.
- They’re highly profitable, given that you don’t have to pay the acquisition costs again.
- Returning customers are satisfied customers and potential brand ambassadors.
This is why you need to track the percentage of returning visitors – a metric that measures customer loyalty and tells you how these repetitive visits convert to revenue. To calculate it, divide the number of repeat visitors by the total number of unique visitors in a reporting time period.
Average Order Value
The average order value (AOV) represents the total revenue divided by the total number of orders Tracking it is crucial to understand the customer lifetime value and improve your bottom line.
If you’re not satisfied with your AOV, here are a few simple tactics to use:
- Cross-selling – offer products relevant to the one a customer searched for
- Upselling – offer a premium version of the same product at a competitive price
- Offer volume discounts for customers that buy multiples of the same item.
- Offer coupons or free shipping to customers that hit the certain order value
Customer Lifetime Value
Customer lifetime value estimates the overall revenue a customer would bring to your business during their lifetime. Calculating it is simple. For example, if your AOV is $40 and your average buyer purchases 10 times at that average order value, your customer lifetime value would be $400.
You can also monitor customer LTV in Google Analytics. Just go to Audience > Lifetime Value.
By calculating a customer lifetime value, you will have better insights into your marketing costs and the effectiveness of your customer acquisition and retention strategies. Most importantly, you will know how much to allocate to your acquisition and retention campaigns and channel your resources towards the tactics that work.
Shopping Cart Abandonment
The Baymard Institute report claims that the average shopping cart abandonment is 70%. This gets even worse if you paid a lot to acquire a customer and drive them towards the shopping cart. That’s why you need to focus on winning these customers back and measuring your shopping cart abandonment rate regularly.
The shopping cart abandonment rate shows you how many visitors added products to their shopping cart and then leave it without checking out. This metric is calculated by dividing the number of completed transactions by the number of shopping carts created and multiplying this number with 100.
If you’ve enabled the enhanced eCommerce plugin for Google Analytics, you can track your cart abandonment directly from this platform. All you need to do is go to Conversions> Ecommerce > Shopping Behavior and see the visualization of your sales funnel, as well as the percentage of buyers that completed or abandoned purchases at each stage.
Segmented Conversion Rates
The conversion rate represents the percentage of eCommerce visitors that decided to buy from you. As such, it is a good indicator of your marketing and sales tactics’ success
You calculate it by dividing the total number of website visitors who made a purchase by the total number of visitors.
To track your conversions in Google Analytics, you need to set conversion goals first. There are different types of goals to choose, such as destination, duration, pages per session, etc.
Apart from monitoring the conversion rate as a wholesome metric, you should break it down to get a more granular insight into your campaigns. Now, for example, you can segment conversions in Google Analytics by your traffic sources, users’ devices, new/returning customers, and so forth.
Revenue by the Traffic Source
By calculating your revenue, you will see how profitable your sales, marketing, and customer support metrics are. However, instead of observing your revenue as one concept, why not segment it? This provides you with granular and more precise insights into your channels and tells you which ones bring you the highest or the lowest profits. This is an amazing opportunity to eliminate those online channels that generate traffic, but aren’t contributing to your revenue.
For example, you can segment your revenue by organic search, referral traffic, or email campaigns directly from Google Analytics’ Traffic tab. That’s how you will have a nice preview of how your customers’ purchasing habits change depending on the traffic source. For example, you may get massive referrals from Facebook, but have a poor AOV. On the other hand, email campaigns drive fewer conversions and yet, they have a larger average order value.
To succeed in the fierce online retail ecosystem, you need to swim in data. Be sure you set reasonable goals and choose metrics that make sense for your store. Above all, update them regularly as your eCommerce site grows.
How do you measure the effectiveness of your online store?
What to read next:
- How to Perform Sales Trend Analysis for your Retail Business
- Does Your Business Need eCommerce Automation?
- How an eCommerce Content Marketing Strategy Can Increase Sales
Senior Editor, Bizzmark Blog
Emma Miller is a digital marketer from Sydney. Works as a blogger, Senior Editor for Bizzmark blog and a guest lecturer at Melbourne University. Interested in digital marketing, social media, start-ups and latest trends.