Expanding the online presence of a business is the key to its success in today’s digitally dynamic world. However, a lot of factors are involved in the smooth running of an eCommerce business, and keeping track to ensure seamless customer experience is a mammoth task. Couple that with different requirements for multiple departments, and the challenge is even bigger. Fortunately, we have assembled certain eCommerce metrics to help streamline the tasks and track the performance of a company.
Importance of Measuring the Success of Your eCommerce Website
Using time-tested strategies for your eCommerce business may seem like the way to go, but a marketing plan that may have worked for one business may not have the same effect on yours. Therefore, just enforcing a strategy will do you no good, unless it is customized to fit your business needs. Once you have implemented the program, you need to keep a close check on its success rate.
Many different metrics make up the e-commerce umbrella. Oftentimes, this can overwhelm a digital marketer. They may focus too much on a single metric making the success visible on paper when, in reality, the overall performance doesn’t improve much. Instead, as an e-commerce professional, you must focus on the inter-dependencies between each metric. This will help to get an effective revenue-generating plan.
5 Digital eCommerce Metrics to Track your Website Performance
There are various tools available to measure, analyze, benchmark, and improve the experience on your digital commerce website across multiple channels by helping you track the following metrics:
1. Conversion Rate
When users visit your site, you want to qualify them into leads and eventually convert to buyers. Routing them in the right direction is vital and needs to be strategically done. The global average conversion rate is between 1-3%. For some of the best marketers, it might be even higher, but achieving even the average number can have a considerable effect on the profit. Conversion rates optimization can be achieved by creating intuitive call to actions, A/B testing for improvements, and simplifying the checkout process. Even though increasing the conversion rate should be your primary motive, you also want your customers to become loyal to your brand. You need to know what your goals are and define ways to achieve them. Don’t stick to one method only. Keep experimenting with new ideas untill you find the best method suited for your business.
2. Churn Rate
Customers may not always be satisfied with the service they receive from the company. Creating a strong relationship with your customers should be a top priority. Unhappy customers can stem from either underperforming products or unsatisfactory customer service. A poor experience can leave them with a bad taste, which may irritate them to the point where they write negative reviews about you online. Providing exceptional service can leave a lasting impression on your customers. They will keep coming back to do business with you. The churn rate is the number of customers that discontinue their subscription to your business after a certain time. A low churn rate means you have a happy customer base. The average churn rate for SaaS companies lands around 4.8%, with upper and lower quartiles of 8.5% and 2.9%, respectively.
3. Return Customer Rate
If your company offers different types of products or services, you ideally want your customers to come back to purchase all of them. But this may not always be true, especially if your products are sub-par. Customers that do return should be valued and incentivized to keep purchasing from you. The return customer rate or the repeat purchase rate is the rate at which former customers come back to purchase other products from you. A return rate between 20%-40% is an admirable rate, while those with a rate above 35% can see a significant increase in their revenue. You can increase the return rate by several initiatives to engage customers, including notifying and updating about your products. Creating schemes and programs to reward your return customers is a proven way of bringing back your clientele. This is a very important metric in digital marketing and only deepens your bond with existing customers.
4. Net Promoter Score
“A happy customer tells a friend; an unhappy customer tells the world.” Your customers are free advertising modes that, if treated well, can propel your business forward. If your customers are satisfied with your service, they will recommend you to a friend, and the cycle continues. But an unhappy customer may get so infuriated with the wasted time and effort on your service that they may start writing your reviews online for the world to see. So it is important to get your happy customers advertising for your products. The willingness of your customers to recommend your service to their friend is the net promoter score. It is graded from 0 to 10. This score can account for 20% to 60% of a company’s organic growth rate. Having quality products will definitely get your customers talking, but no product is perfect. Many times your consumers will find faults in them. Effectively handling these complaints is the key to a high net promoter score.
5. Cart Abandonment Rate
eCommerce sites offer a virtual cart feature for their customers who want to select multiple items at once. Consumers select the products they are interested in and add them to their virtual carts. They can then order them at their leisure. You may often notice that your customers add items to their cart, but do not place the order. The rate of potential customers who leave without buying any product is the cart abandonment rate. The average abandonment rate is 68% for the top 23 eCommerce sites. Some of the ways to reduce shopping cart abandonment include email retargeting, allowing guest checkout, and eliminating surprise costs.
The above-mentioned eCommerce metrics are some of the ways to assess the ROI generated by your marketing strategies. These strategies remove any ambiguity in measuring your profits. Even though focusing on these individually will not cause significant changes to your revenue, using them in coherence with each other can be greatly beneficial for your business.
Once you have found the best metric to track business performance, analyze how well it is working for you over time. Customers’ needs evolve with time, and because of that, the way they consume products and interact with e-commerce platforms also changes. So, it is only natural that the metrics you choose today may not work in the same way tomorrow. A system that helps you not only monitor your performance but also effectively brings about a transition in your business should be the right choice.