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Monitoring metrics is important…

eCommerce business owners need to make decisions on a daily basis, and it’s of the utmost importance that those decisions are based on actual facts and data. This is why datadriven marketing decisions based on certain metrics are vital for eCommerce success.

Total sales and net profit are crucial indeed, but they are far from being the only important metrics. In this article, you have a chance to learn how to approach data-driven decision making and what are some key metrics to consider if you want to prosper in the long run.

… And data is crucial

To grow an eCommerce business, you need to make a number of decisions, and this can become overwhelming at times. You need to think about which channels to use for campaigns, the best products to market to customers, when to run promotions, how big the advertising budget needs to be, and so on.

This is just the tip of the iceberg, and there are many more decisions you have to make. And if you didn’t have any data to guide you in your decision-making process and help you see what is the most profitable choice for you, you would be shooting in the dark.

Data is an invaluable asset in the eCommerce world, and if you know how to use it, you will be able to extract some crucial metrics and make an informed decision based on them.

How will this article help?

There is a lot of data eCommerce stores deal with, and that data needs to be utilized properly. A smart business owner will gather all the necessary data and combine it with important metrics, which will lead to data-driven decisions and business growth.

This article lists some strategies you can implement for better decision making as well as the most important metrics to consider.

Some prerequisite resources

If you are new to the world of eCommerce or you have run a brick-and-mortar store for years, you may not fully understand the power of analytics in online retail. Before you underestimate the role these numbers can play and how they affect your success, take a look at these resources:

Data-driven decision making


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Every eCommerce store owner knows that there is no such thing as a small decision when it comes to running a business. To maximize your business’ growth and put it in the right trajectory, you need to make the right decisions, not just guesses or speculations.

If you want all of your decisions to have some merit and have a positive influence on the business, you need to implement data-driven decision making. This is still a relatively new concept, as businesses didn’t have access to this much data up until very recently.

In the past, there was a significant lack of data businesses could work with, but nowadays the situation is reversed. There is simply too much data and if you don’t know how to use it properly, it’s all going to go to waste.

To approach data-driven decision-making correctly, you need to gather the right data and analyze it for the right insights. From there, you will be able to make strategic decisions that match your business goals.

To implement data-driven decision making, you need to take the following steps.

Know what data you need

The main purpose of data-driven decision making is to help you reach the right conclusions and make strategic decisions regarding your business. The first step is to think about what you need from your data analysis depending on the goals you’re trying to achieve.

For instance, those who are looking to increase customer acquisition would need completely different data compared to those who want to increase customer retention.

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Connect your sources and start gathering data

When you know what data you need, identify the sources where it’s located, and check if you are able to pull all the necessary metrics. To gather data, you need to go into each individual platform, but you can make the process simpler if you have an customer analytics platform.

These platforms connect multiple data sources and make it much easier to visualize and analyze your data since it will all be in one place.

Analyze your data

When you connect all of the sources you need and gather the necessary data, you can start to analyze it so you can calculate the metrics you need. Once again, the metrics you’re calculating depend on what your goals are and what you’re trying to improve.

One important aspect of data analysis is where and how you will store your data. And while there are a number of new tools that can help with this, there are also some older tools that still work like a charm.

One of those tools is Microsoft Excel. But if you run a business in an overly-competitive and hectic environment such as New Your City, you may not have the time necessary to learn all the ins and outs of Excel by yourself. In that case, you should ask for help from an Excel consultant in NYC to master this software easily and quickly.

Look for insights that will help you make strategic decisions

Once you gather enough data and perform your analysis, you can draw some insights that will be invaluable in your decision-making process. For example, if you focus on marketing and discover that one of your channels is driving more revenue, you can act accordingly and invest more in that channel.

The necessary metrics for data-driven decision-making


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Depending on your business’ goals and priorities, you can track hundreds of different metrics. However, if you want to get a better grasp of your eCommerce growth, the following ten metrics are the ones you need to focus on.

Total sales

To get an accurate picture of how much your online store is earning, you need to calculate the revenue that was brought in by sales. If you know how much total sales you have in a day, week, month, or year, you can see your business’ overall growth and the direction where it’s going.

To figure out your total sales, you need to multiply your total number of sales in a given period by the price per unit of the items sold. If you have multiple items, you need to calculate total sales for all of them and then sum all of them up.

Average daily sales

Average daily sales tell you how your business is doing on a day-to-day basis and measure how much money you make per day by selling your products and services.

To calculate this metric, you need to divide your total sales in your chosen period of time by the number of days in that period.

Year-over-year growth

This metric helps you evaluate the financial progress you made over a longer period. With it, you can compare how much you’ve grown over the previous year and evaluate the impact your strategies had long-term.

Year-over-year growth is calculated by subtracting last year’s earnings from this year’s earnings. Then, take that number and divide it by last year’s earnings. Your final step will be to multiply the resulting figure by 100, which will show your year-over-growth percentage.

Sales growth percentage

Your eCommerce company’s net sales from one fiscal period to another are often referred to as the sales growth rate. In the context of this metric, net sales refer to the revenue from your total sales when you subtract any discounts or returns you had.

To calculate this percentage from one financial period to the next, you need to subtract the net sales of the previous period from that of the current period. The next step is to take your result and divide it by the net sales made in the previous period. All that’s left is to multiply your result by 100 and you will have your percentage.

Repeat purchase rate

The number of buyers you’re able to turn into repeat, loyal customers, is represented by the repeat purchase rate. In other words, this metric represents how successful you are at customer retention.

To calculate your repeat purchase rate, you need to divide the number of customers who have made multiple purchases over a period of time by the total number of customers you had in the period. Finally, multiply it by 100 and you will get your percentage.

Net profit

The difference between the revenue and the cost of a business is represented by its net profit. This number represents the money after your business has paid off all of its expenses and bills, and it’s one of the best indicators of your success.

Net profit is very easy to calculate and all you need to do is subtract your total expenses from your total revenue.

Gross profit

The revenue your business brings after all the expenses required to make a sale is represented in the gross profit. In other words, it’s your business’ total sales after subtracting the cost of goods sold from it. When you increase your gross profit, you impact your eCommerce store’s bottom line directly.

The difference between net and gross profit is that net profit also accounts for costs such as operating expenses and employee salaries, while the gross profit does not.

To calculate gross profit, you need to know the exact cost of all the products you’ve sold. All you need to do is add up your total sales for the product in question during a specific period. Find how much the cost of goods sold was in that period, and subtract the costs you’ve had from the total sales.

Conversion rate

Conversion rate is a critical metric for all eCommerce retail stores, and it measures the percentage of website visitors that convert by acting on your CTA. The most common measure of conversion is when a website visitor makes a purchase, but it can also be when they sign up for your newsletter or download an asset.

You can calculate your conversion rate by taking the number of conversions in a specific period of time and dividing it by the number of people who visited your website during that period. Finally, to get your rate you need to multiply that number by 100%.

Average order value

The name of this metric is pretty self-explanatory. AOV represents the average value of the purchase of one or multiple items one customer made from your store. This number represents how much money your customers usually spend on individual orders.

To calculate your average order value, you need to divide the total revenue you had during a specific period of time by the number of orders you received during that period.

Customer lifetime value

Most eCommerce merchants agree that customer lifetime value is one of the most important metrics that need to be tracked. It represents how much revenue one person could potentially bring in to your business during the time they’re your customer.

To calculate a customer’s lifetime value, you only need two metrics: average order value and purchase frequency. The first metric we already explained, and the second one represents how many times your customers purchase from you during the entirety of your relationship with them.

All you have to do is multiply those two metrics and you’ll have your customer lifetime value.

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Final thoughts on data-driven decision making

In the eCommerce world, you need to make decisions every day. While some aren’t as important as others, most of them will affect your business’ future. One wrong decision can lead to a loss of profit or even worse, and that’s why data driven ecommerce decisions are so important.

Data is an incredibly invaluable asset to any business, and as long as you know which data you can use to get your wanted information, you won’t have any issues. And of course, don’t forget about the ten metrics we discussed here, all of which play a crucial role in data-based decision making.