To an inexperienced entrepreneur in the eCommerce industry, success might be defined by the number of sales the store generates on a daily basis, but in reality, true long-term success encompasses much more than that. If you want to create a seven-figure Ecommerce store like Anthony Agyeman did, for example, you have to stay on top of the latest developments in the industry, invest in inbound marketing and paid advertising, and most importantly, you have to track all of the right metrics in order to create actionable reports that will allow you to make all the right decisions on the road to greatness.
Tracking your KPIs is essential if you want to base your decisions on actionable and verifiable data, which you should because the only right decision is the one that is based on relevant and timely information. Otherwise, all you’re doing is shooting in the dark. With that in mind, let’s go over the most important Ecommerce KPIs that you need to monitor in order to grow your business.
Organic and paid traffic
One of the first metrics that might come to mind is, of course, site traffic. Now, you need to differentiate between traffic sources in order to put all of this data into perspective, so be sure to split it into organic and paid traffic. These two KPIs will give you valuable insight into your overall brand visibility in the online world, and how many people are visiting your website on a daily, weekly, or monthly basis. In turn, this will help you analyze peak visits and dips, and figure out why some days of the week or months generate more traffic than others.
What’s more, these two KPIs will help you assess the effectiveness of your SEO and PPC efforts, and help you craft better strategies going forward. They will also help you make better sense of your bounce rate and the average time spent on your site, and draw a direct correlation between these two types of metrics.
Bounce rate and average time on site
The two following metrics are essential for understanding how the individual pages on your website are performing, or in other words, how much time people are spending on every page, where they’re dropping off and losing their interest, and how that correlates to the average time people spend on your site. This gives you insight into the level of engagement that your website provides to its visitors, which will directly influence your conversion rates and numerous other key metrics pertaining to the growth of your Ecommerce store.
For example, making your website more engaging through quality images, articles, copywriting, and other content types will decrease your bounce rate, which will elevate the overall customer experience and in turn inspire potential customers to get in touch or make a purchase. This will also help reduce your cart abandonment rate and it will improve your SEO score, brand trust and authority, and other key metrics.
Sales conversion rate
You are in the business of selling goods over the internet, so naturally, the conversion rate is one of your most important KPIs that you need to monitor constantly in order to adapt, optimize key sales processes, and stay ahead of the competition. However, monitoring conversions is a complex task, one that requires you to use dedicated reporting software that will give you a comprehensive overview of all important conversion KPIs such as conversion periods and where your conversions are occurring the most on your site, and help you compare previous periods with your current conversion rate.
What’s more, the software you use should ideally provide you with a single comprehensive dashboard that will allow you to monitor all of your key metrics and create all-encompassing reports. These will help you put things into perspective and make better decisions every step of the way.
Cost per acquisition
Another KPI that’s closely linked to your conversion rate is the average cost per acquisition. This is the average financial investment you have to make in order to acquire a new customer, and needless to say, it has to be less than the revenue that customer is generating for your business. Your goal should be to minimize your CPA while elevating the customer lifetime value metric, and most importantly, by converting one-off customers into repeat customers. After all, long-term Ecommerce success is built on the customers that keep coming back to your store. With that in mind, be sure to stay on top of the latest trends in the industry to generate repeat business and build customer loyalty.
Cart abandonment rate
The harsh reality of modern Ecommerce is that only a handful of your visitors will actually buy something on your site. You can expect a single-digit percentile of your total website traffic to actually convert, even if you’re operating in one of the most popular sectors in the online world. That said, you can boost your conversions by analyzing your cart abandonment rate, and then employing retargeting to reach out to your potential customers and incentivize them to finish their purchase.
You can reach out via email, SMS, social media and direct messaging, you name it, the important thing is to not let a good lead go to waste. If you offer a sweet deal, a small discount, or free shipping, you are much likelier to inspire them to come back and finish the purchase, but before you can do all of that you have to analyze this key metric and extract valuable insights about your potential customers.
The Ecommerce industry is becoming more competitive year after year, which is why it’s more important than ever before to stay on top of your key performance indicators. Monitor these metrics, and you will have the info you need to make all the right decisions on your way to success.