Today, the key to a business's success lies in data-driven decisions. By making decisions based on data, you can understand the strengths of your business, and the sources of your revenue, and identify pain points that need improvement.
While there are thousands of metrics available to monitor, only a select few can effectively and reliably capture your e-shop's performance, providing valuable insights that can drive its growth.
Below, we will highlight these metrics and we will explain why they play a vital role in your business's success and in shaping your marketing strategy.
What are E-commerce Metrics?
E-commerce metrics are statistical data that track an e-shop's performance. These metrics provide valuable information about various aspects of the online store's operations, such as sales, user engagement, and the effectiveness of marketing strategies. By properly monitoring these data, businesses can better understand customer behavior, optimize their processes, and make reasonable decisions that will enhance their growth.
Ecommerce metrics vs KPIs
E-commerce metrics and Key Performance Indicators (KPIs) are terms that are often used interchangeably, but they have distinct meanings. E-commerce metrics capture the performance of various business processes. On the other hand, KPIs are specific indicators used to measure the performance of goals set by the business.
Example:
The Average Order Value (AOV) is a metric that shows how much money customers spend on average per order.
A KPI could be the goal of increasing the average order value by 10% over a specific period.
How to determine the most important E-commerce Metrics
Quickly determine which metrics are most valuable for your business by considering three key questions:
What consequences would a negative shift in this metric bring to the business? If a metric does not significantly impact the overall success of your business, it shouldn't consume your time and effort. Instead, you should focus on more essential metrics.
Would enhancing this metric contribute to strategic objectives? Performance metrics are merely indicators to help you understand whether you are approaching your business goals. Therefore, even a significant improvement in a metric that does not serve your long-term strategic plan is of limited value.
Does this metric have the potential to enhance other metrics too? In the e-commerce world, many metrics do not function independently but are interconnected. Improving one metric can create a domino effect of positive impacts on other metrics and overall business performance. These are the most important metrics you should monitor!
5 crucial Ecommerce Metrics
Let's take a closer look at five of the most crucial ecommerce metrics:
- Amount of Orders
The total number of orders subscribers make within a specific time (e.g., "last month").
Ways to boost this metric:
- Improve the user experience on your website by simplifying the order completion process and encouraging instant and quick purchases.
- Use personalized email marketing campaigns to recommend products that meet customers' needs and interests.
- Offer limited-time offers (flash sales) to motivate customers to make purchases.
- Total Order Value
The total revenue generated from orders made within a specific time (e.g., "last month").
Ways to boost this metric:
- Implement product bundling to boost revenue and average order value in your business.
- Successfully use cross-selling and upselling strategies to encourage customers to buy more products.
- Create loyalty programs to entice consumers to make more purchases to get their rewards.
- Average Order Value
The average order value indicates the typical amount that your customers spend on orders from your e-shop. This metric is calculated by dividing the total order value in a specified period by the total number of orders during that period.
Ways to boost this metric:
- Offer a gift card whenever the order value exceeds a specified amount, encouraging your customers to spend more.
- Enable free shipping if the amount of the order exceeds a specified amount of money.
- Average Customer Lifespan
The average customer lifespan, also known as customer lifetime value, is a critical e-commerce metric that represents the total value a customer is expected to bring to your business. The average customer lifespan is calculated by adding the lifespan of all customers and dividing it by their total number.
Ways to boost this metric:
- Maintain regular communication with customers through various channels, such as email, SMS, and Viber. Keep them informed about new product launches, special offers, and important company updates.
- Implement loyalty programs with exclusive discounts and VIP privileges that will motivate customers to continue choosing your business.
- Order Frequency Rate
The Order Frequency Rate is a significant e-commerce metric that indicates how often your customers place orders within a specific period. This metric can help you understand customer loyalty and the trend of repeat purchases. A high order frequency rate means that your customers are satisfied with your products and services and choose to return for more purchases.
Ways to boost this metric:
- Create reward programs for repeat customers.
- Send personalized emails with offers and discounts to customers who have made purchases in the past. Remind them of new products or similar items that may interest them.
- Provide useful content to keep your customers engaged with your brand.
By monitoring and enhancing these e-commerce metrics, you can gain a comprehensive understanding of your e-shop's performance and make informed decisions to foster its growth.
Start now with Apifon and gain access to valuable metrics that will contribute to making data-driven decisions, maximizing the effectiveness of your e-shop.
