Every day, eCommerce stores try to figure out the next actions to increase their online sales and ultimately, grow their business. The good news is opportunities are everywhere. The challenge, however, is where to find them. This is where leveraging on customer data and keeping track of your eCommerce metrics will come in.
Without eCommerce metrics, it’s difficult to know where you are heading. But with the right eCommerce metrics, you’ll be making informed decisions based on data and current trends instead of relying on your guts.
But, with the vastness of data at hand and different metrics to consider, what eCommerce metrics do you need to prioritize? How do you find the right metrics for you? How do you transform your data into actionable insights?
Understanding Buyer’s Journey
We know that eCommerce metrics is a huge undertaking with complexities, so today, we’ll focus on what’s really important for your online store: your customers.
Your customers are your lifeblood. They’re keeping your business alive. This is why understanding your customers by looking at how they progress into the sales funnel will help you uncover the right eCommerce metrics to focus on first.
The concept of buyer’s journey maps a customer’s progression from research to purchase. To simplify the process, follow these 3 familiar eCommerce stages: Traffic, Conversion, and Retention.
Each stage is combined with buyer’s journeys to ensure that you will cover all shopper’s steps into your eCommerce metrics.
7 eCommerce Metrics to boost sales and drive loyalty
Buyer’s Journeys: Awareness and Interest
Visitors have arrived at your online store, what’s next? The following eCommerce metrics will help you understand what you can do with your traffic or learn how to gain more.
1 – Marketing Channel Performance
Understanding how your online store is found by your customers is a key ingredient in making strategic decisions in your marketing efforts. A marketing channel metric allows you to identify where most of your traffic comes from. Depending on what tool you are using, they are commonly categorized as paid search, organic or referral.
Google Analytics has a Channel Report that gives you a general view of your marketing channel performance. This Channel Report has a straightforward dashboard that tracks which channels acquire more customers and how much revenue they are generating. Go to Acquisition > All Traffic > Channels. A dashboard similar to the one below will appear.
Alternatively, GinzaMetrics has an interactive Marketing Channel Performance dashboard. Its interactive charts let you hover over any graph and reveal additional information about it just like below:
Do not only focus on the volume of traffic you’re getting from a certain channel. You also need to look at the conversions you’re generating. After that, analyze why a specific channel returns a good conversion rate. Is it because of the demographics or the ad campaign you ran? Highlights the strengths and apply them in your underperforming channels.
2 – New vs. Returning Visitors
The New vs. Returning visitors metric is a great way to know if you are gaining new customers over time and to learn how many of your past customers actually come back to your site again.
It is also where you can understand how your returning visitors behave differently from the new ones. If there is a discrepancy in their behavior, you can gain insight as to why and what you can do to address any gaps.
Google Analytics has a predefined New vs Returning dashboard. Go to Audience > Behavior > New vs Returning. What it shows is a direct segmentation of new and returning visitors with their behavior (e.g. average session duration) and conversions (e.g. revenue) just like below.
Treat new and returning visitors differently. If you notice that bulk of your revenue comes from your returning visitors, put a strategy that entices them to come back and make a purchase again. For example, once you detect that you have a returning visitor, popup a discount coupon like the ‘welcome back’ coupon from Absolute Nutrition.
You can also create an entrance popup using Better Coupon Box to target first-time visitors asking their email addresses in exchange for a discount. By capturing their email addresses, you can send relevant contents in the future and nurture your relationship.
Buyer’s Journeys: Consideration, Purchase
The following conversion metrics will give you insights as to how many are actually buying and what you can do to drive your visitors into a purchase.
3 – Average Order Value (AOV)
Understanding your AOV will help you helps you examine how well you are performing at closing your deals. Say, for example, are your product listings generating enough interest to add more products? If you are selling earrings, have you not forgotten to cross-sell your necklaces and rings to go with them? Google Analytics has an ‘Avg. Order Value’ readily available at Conversions > Ecommerce > Overview link.
If you notice that your average order value is declining over time, make it compelling for customers to add more items to their carts by offering bundled items or upsell and cross-sell items at a discounted price. Boost Sales has upselling and cross-selling capability to help you sell more and increase your AOV.
4 – Cart Abandonment Rate
The cart abandonment rate will help you track the number of visitors who have added items to their carts but left your site without going through the checkout process. If your visitors are abandoning your site after adding items to their carts, this might entail that you are showing the various reasons why shoppers leave their carts, such as unexpected costs, excessive payment checks or expensive pricing.
You can check your cart abandonment rate using Google Analytics. Go to Conversions > Ecommerce > Shopping Behavior and look for this:
If you are already in the average 68% shopping cart abandonment or nearing it, you have to examine why you are experiencing such cart abandonment rate. More importantly, create strategies to address this by using an exit-intent popup. What it does is when a visitor is about to leave the site, a popup message will appear convincing the visitor to proceed to checkout. You can do this by using the exit-intent technology of the Checkout Boost tool.
5 – Checkout Abandonment Rate
Similar to cart abandonment rate, you can also keep track of the number of users who have added something to their carts and have proceeded to the checkout process but later on did not complete the purchase.
It is also an important eCommerce metric because it understands why customers don’t buy even if they are already in the checkout process. Say, for example, you may have last-minute additional prices or your checkout process is too long. There are various reasons why customers don’t complete a purchase. That’s why Google Analytics has an in-depth report using the Checkout Behavior Analysis.
Go to Conversions > Ecommerce > Checkout Behavior. It will display the below dashboard. You can see which part of the checkout process your customers are abandoning: Billing and Shipping, Payment or Review. If for instance, you have high ‘Payment Drop-off’, check your payment portion and understand any possible challenges that your customers are facing.
Buyer’s Journeys: Use, Advocacy
Learn the eCommerce metrics that will help you understand how you can encourage customers to make repeat purchase and become brand advocates.
6 – Customer Retention Rate
Customer retention rate will help you analyze how long your customers remain active before churning. By your customer retention rate, it will give you insights to improve your customer acquisition and retention activities.
Customer retention rate analysis is always based on tracking a cohort of your customers over a period of time. Cohorts are unvarying and regular groups who are monitored over time.
You can use Google Analytics’ Cohort Analysis. This analysis segments your visitors from their acquisition date and their retention rate. The retention rate is the number of people in that cohort who returned in the nth period of time divided by the total number of people in that cohort. Using your Google Analytics, go to Audience > Cohort Analysis. This will display the report below.
If you look at the data above, you can look at the trend of your customer retention. The densest days are ‘Day 1’ and ‘Day 2’. This means that visitors are more likely to return on the first and second day after they visited your site. To take advantage of this, you can create discount coupons that can be redeemed on Day 1 or Day 2.
You can also amp your days with low retention rates. Say, most visitors will churn at Day 6 and above. You can trigger an email campaign targeting customers who visited your site after six or seven days from their last visit.
7 – Customer Lifetime Value Analysis
The customer lifetime value (CLV) is a prediction model used to assess the financial value a business will generate from its entire relationship with a customer. Because it is normally tied up with the channel where the customer is acquired, it has similarity with the Marketing Channel Performance that we’ve discussed earlier.
The difference, however, is the performance that they are measuring. CLV is predictive in nature as it provides you with the spending value of a customer in its lifetime. With that information, you can allocate your marketing resources profitably. It encourages online store owners to focus on the long-term value of customers instead of investing resources in acquiring customers with low total revenue value in the long run.
Google Analytics’ Lifetime Value analysis will be come in handy for you. Here’s a sample dashboard:
The Revenue per User (LTV) and Revenue (LTV) columns will help you understand which acquisition channel generates the highest lifetime value. This way you will know where you can find the best customers with good spending value.
Metrics for Success
Without eCommerce metrics, you are just blindly selling. You cannot grow what you cannot measure. Find the right eCommerce metrics that suit your online store’s needs and objectives. Use the above eCommerce metrics to help you transform data insights into business actions.