E-commerce data analytics is the golden secret behind your business success. It offers amazing insight into the behaviors and actions of your potential and current customers. But with the sheer number of potential KPIs and metrics to track, how do you pick the right ones to help you improve your e-commerce conversion rate? Many e-commerce marketers have failed to achieve their goals not because they lack skills and knowledge but because they lose track of what they should keep tabs on.
In this article, we will help you gain a deeper understanding of e-commerce KPIs and metrics that you should track to increase your sales. But first, let’s begin by defining the difference between KPIs and metrics.
What is a KPI?
KPI stands for a key performance indicator. It is a quantifiable measurement used to demonstrate how a business is making strides towards its objectives. Organizations use KPIs at different levels to evaluate success. High-level KPIs focus on general business success, while low-level KPIs indicate success strictly at the departmental level, i.e., HR and marketing.
What is a metric?
A metric is a statistical measurement that can be interpreted to show how your business is performing. They are useful in making informed business decisions. Running a business without keeping track of your e-commerce metrics is like walking in the dark.
So, what is the difference between metrics and KPIs?
You can think of KPIs as GPS. They tell you whether your business is headed in the right direction or if it’s taken a wrong turn. Metrics simply track processes and results. They don’t have to be directly linked to strategic objectives. KPIs are made up of different metrics that help you get a full picture of your team’s progress towards success.
In other words, KPIs help you understand where you need to be in order to achieve your goals. Metrics show you where you are right now.
Now that we have defined KPIs and metrics let us look at some of the most important e-commerce KPIs and metrics that you should track to gain insight into how your business is doing.
KPIs and metrics in e-commerce
USE GOOGLE ANALYTICS E-COMMERCE TRACKING TO TRACK YOUR WEBSITE’S SHOPPING ACTIVITY
For starters, if you want to measure your performance thoroughly, use Google Analytics. This platform gives insight into your website’s audience and traffic. You can track metrics such as:
- Conversion rates
- And landing page views
But if you want to view your business through a wider lens, you will have to track those activities that matter. Enhanced e-commerce tracking helps you track your website’s shopping activities that give you insights into all the valuable knowledge. So, let’s get to the point – what KPIs and metrics should you follow?
It is an effective way of comparing the performance of different advertising channels that you use. You can use it to set ROI expectations when launching an online campaign. It’s a crucial KPI for your e-commerce business. The average conversion rate of a website depends on several factors, such as niche and target audience. Obviously, it also directly affects your sales level.
CART ABANDONMENT RATE
The shopping cart abandonment rate refers to the percentage of shoppers who add items into the shopping cart but abandons them before completing the purchase. It helps you determine the number of customers that leave your website without purchasing anything. A high cart abandonment rate means that there is a deeper problem that you need to address. It could be high shipping costs, poor user experience, or limited payment options.
AVERAGE ORDER VALUE
Average Order Value (AOV) is the average amount that your customers spend when purchasing at your store. It is a great metric to track if you want to gain insights into customer purchasing behavior. For instance, you can use it to create product bundles. An increase in average order value means an increase in profits.
To increase your AOV, you need to segment your customers into different groups based on their purchasing history, i.e., low, medium, and high spenders. You can also segment them based on the types of products they purchase and the frequency of orders. And once you’ve segmented your customers, the next step would be offering them products that match their needs and budget.
COST PER ACQUISITION (CPA)
CPA indicates the cost of acquiring a single customer who placed the order in your store, often with an indication of the sales channel from which they came. For instance, if your conversion rate is high but the AOV index is low, it can turn out that getting a customer is expensive, and you have to encourage them to buy more products or rethink your marketing efforts. CPA frequently measures the average cost of gaining one paying customer via a given campaign channel. This gives you information on which channel to invest in to get results and not burn your marketing budget.
E-commerce tracking is highly important if you want to run a successful, data-driven e-commerce business. You can measure many metrics, but you only have to come to grips with those that really matter. Learning about the relationship between different business components enables you to make informed decisions that will have a significant impact on your business’s success.
And remember that measuring your efforts is one thing. Keeping your pricing optimal is the other. That’s where we step in. Dealavo offers a dynamic pricing platform for online stores. With it, you can automate pricing in your store so that it’s always competitive. Find out more today!