While running an e-commerce business, one of the best ideas is to make decisions based on metrics.The most successful online stores track their performance and use data to increase future revenue.There are plenty of metrics, but as a retailer, you can focus on a few that are crucial for your business. By taking a closer look at numbers, you can optimize your store performance and benefit.In the following article, you can find out what are the most significant metrics that you should take into consideration as a retailer.
Total revenue
A number that expresses total sales is the most important metric for measuring overall performance.Total revenue combines the effectiveness of all efforts, including marketing, product development,search engine optimization and more. That is why it can be the main metric to focus on. While tracking total revenue pay attention to details. Do your sales increase regularly? Are there any particular shopping seasons for your online store when you notice significantly higher revenue compared to the other months? Take a long-term approach to draw the right conclusions.
Conversion rate
It represents a number of visitors on your website who actually bought your products. Conversion rate is calculated by dividing the number of sales by the number of total sessions on the website. It does not matter how long a session was, even it was only a few seconds – it counts. On average, the online stores’ conversion rate conversion rate is 2% (read more stats here: https://www.growcode.com/blog/ecommerce-metrics/). Even though many retailers focus only on the conversion rate, it can be a huge mistake. Nevertheless, there are many things you can do to optimize your website so that it can convert better. Work on the site speed, pay attention to mobile-friendly design, build urgency, create a visible call to action buttons, use high-quality visuals, add reviews to products pages and more.
Average order value
It is a metric that expresses the average value of a single purchase. To calculate it divide total revenue by the number of purchases during a given period of time. Why is it essential to pay attention to the average order value? By boosting it, you can increase total sales. To optimize average order values, you can offer special discounts, product bundles, cross-selling, up-selling, free delivery for purchases above a certain value of shopping cart.
Purchase frequency
It is used to measure how often customers come back to your online store and shop. Purchase frequency is the number of purchases an average customer makes over a given period of time. To optimize this metric, you need to boost your off-site activities because they have an impact on the returning of customers. Thanks to social media marketing, email marketing, web push notifications, or remarketing campaigns, you can maintain a relationship with your customers. The clue, in this case, is an understanding of customers’ needs, problems, desires and preferences. The more you know about consumers, the better you can communicate with them, and therefore, attract to your offer.
Retention rate
It is a marker of how loyal your customers are. Retention rate shows the percentage of customers who shopped in the last period (6-12 months) but also purchased in your store recently. That way you can count how many customers come back to your store and stay active by shopping, for example, in the last six months.
Customer Lifetime Value
It is calculated by multiplying three metrics: average order value, purchase frequency, and retention period. Optimizing this metric in practice is taking care of existing customers so that they will keep coming to your store in the future. Focusing on the customer lifetime value can bring you long-term benefits.
We hope that now you know how to make data-driven decisions when it comes to your ecommerce strategy. Make the most of the metrics mentioned above and optimize your actions. To increase sales, you should focus on long-term goals and build a strong relationship with your customers.
Read more news: