As you run your ecommerce store, there are a number of metrics to keep track of. This partly depends on the goals you set for your ecommerce business. Some of these metrics are straightforward while others require extra attention.
Ultimately, you want to make a profit. But it is important to know which numbers play a big role in achieving that, which ones are minor. You also have to compare them with changes you make to your ecommerce store.
Let’s go through some success factors to consider when measuring ecommerce.
Even with the coming of new channels for selling, like social media business accounts and voice devices, the store website is still a major piece. Simply put, you can’t make sales without visitors. Think of traffic as a starting point when measuring success.
When you get a lot of visitors, you have a wider pool from which to try and get buyers. Traffic also has other benefits. Even if you’re mainly getting the wrong visitors or visitors who aren’t buying there’s still a positive. Traffic helps you learn a lot about your online efforts.
This includes what search engines you’re appearing in, the age and location of people finding you, the devices they are using etc. A very important lesson you can learn from just about any kind of traffic is your customer experiences.
You can see what page elements people hover over most, what they click on, which pages they view and the order etc. So whether you’re targeting a large audience or a niche crowd, it’s rarely negative to get high traffic.
It will help you make decisions that are more likely to win over new customers. You’ll also be able to know when to pivot into other product offerings.
Average Order Value
Here, you get the total revenue over a given time and divide it by the number of orders. This gives you an estimate of how much a single customer spends in one order. A higher average order value indicates that you’re managing to get more out of one customer.
However, AOV doesn’t always tell the full story. It could be that a small portion of your customers are buying a whole lot in one go while the majority are making small orders. A high AOV may also arise from the success of one particular product.
The process of opening an account involves a bit of work. Customers usually have to submit a number of details aside from payment information. When a potential customer opens an account, it may indicate that they have plans of buying from you in the near future.
This may also be a sign that the features you offer to account holders are relevant.
If a customer buys from you, it is important to try and get them to buy again. There’s a good chance that someone else is offering that same product. They may even be offering it cheaper.
When those who buy from you keep coming back, it shows that you may not be benefitting from the mere strength of a winning product. It could be that your store website is very easy to use. Or maybe that you have excellent customer care.
A large number of repeat customers may indicate that you have a more wholesome shopping experience. A repeat customer is good, but how often they return and how much they spend is important too.
A deeper understanding of this would be the customer lifetime value, which is basically how much they spend in total throughout their time as a customer.
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Email Signups (Opt-in Rate)
For most ecommerce stores, email is not just a form of marketing. It is a key piece of the puzzle that is customer retention. At the earlier stage of the customer journey, getting customers to sign up for updates shows that you’ve ignited a certain level of interest within them.
With more people staying on your subscriber list, you can get another chance at convincing them to make a first purchase. Furthermore, you can get those who have already bought to buy more. Email campaigns are a bit trickier than they sound though.
Make sure you constantly revise your list. Group the subscribers into different categories like their interests or period of inactivity. Craft special messages for each category. Pay attention to the open rate and the click-through-rate. These will help you gauge your success better.
Reviews and Testimonials
Profit aside, every ecommerce store soon gains a reputation outside of what they try to push through branding. Some of the best indicators of how well your business is doing are ratings, reviews and testimonials.
First off, note the number of people who take time off to rate you or answer questions.
Survey results and other social proof statistics tend to be more credible if it is clear that lots of people participated. Second is the kind of reviews you’re getting. While it is natural to want glowing reviews all through, it might be better to have mixed ones.
For starters, they are more believable. It also shows that some people care enough to want to see you improve in areas where you are lacking. If disgruntled customers always leave quietly and never come back, you might struggle to pinpoint your weaknesses.
A bag of mixed reviews leaning more towards the positive side can be a good indicator of ecommerce success. You should also try to get reviewed on other credible sites like TrustPilot or in online communities like Honest Society.
You can use direct questions in this case to determine a net promoter score, which is how likely customers are to recommend your products/services to others.
Offsite Visibility And Engagement
To get huge sales, you have to market your store consistently. The level of awareness amongst potential customers is very important since it’s hard to feed off the first 5 or 10 people forever. There are a number of ways to achieve this.
These include posting on social media, sending out emails etc.
First is the visibility. This includes how often and how high up you’re appearing in search engine results. Another area is your appearance in news feeds of social media sites such as Facebook, Twitter, Instagram and Pinterest. Basically how many people see your posts (impressions) and follow your pages.
Second is engagement. There could be a lot of people seeing your materials online but simply scrolling past. You need to keep track likes, retweets, shares, comments/replies etc.
In the case of multimedia like photos and videos, check for number of views (view count), watch rates and detail expands/clicks.
The higher the level of engagement, the more likely it is that you’re talking to people who are interested. This is a good Launchpad for calls-to-action like visiting the store’s website.
If you keep proper records of what you’re spending on SEO, social media, ads and other promotional efforts in each period, you can determine your customer acquisition cost. This is how much you’re spending to get a single customer.
When you’re just starting out, you may only have a few products listed. In the case where you’re not intending to specialize, it is crucial to get more products into your catalogue. Initially, you may be challenged by a lack of capital or an inability to win over some suppliers.
Once you start getting visitors of different types and squeeze some sales out of them, you can look at adding new products. The larger your catalogue, the more you’re able to appeal to a wider audience.
In the beginning, a lot of suppliers may not be willing to even work with you. They may give you tough conditions like down-payments/committing to a buying a certain amount of stock. As the rate at which you sell products rises, they will slowly take note.
They may eventually accept to set aside large inventory for you without money down. You could also get other existing fees on things like storage, packaging and shipping fulfilment lowered or waived.
In some cases, you might even be persuaded to list other products that they want to move faster. Always take note of the terms you’re extended by suppliers and your ability to attract new ones. This says a lot about the success of your business.
As a growing ecommerce store, you’ll often hit ceilings when it comes to the value of a customer. You may realize that you can only make a certain amount out of one customer.
There might also come a time when the additional amount you invest in acquiring new customers gets you fewer.
This is where selling to corporate customers becomes advantageous. Small changes like having dedicated bulk order phone lines, credit options and discounts on large orders can help.
The more you find yourself dealing with sizable business, the more you might be moving towards success.
Try to find neat ways to indicate special offers for extra bulk orders. Look for other B2B platforms and get your products listed there.
Models vary slightly from one ecommerce business to another. Some actually buy and hold stock, others make and sell their own products. In recent times, many sell without holding any inventory. As an ecommerce business aiming for success you need to be able to sell fast.
You may sell 100 pairs of headphones in 6 months. Your competitor on the other hand may sell 150 in 3 months. This kind of businessman is more likely to get better terms/rates from suppliers. Always aim for a shorter inventory time. Discounts and promotions can help with this.
As we wrap up, don’t forget to look at other areas like cart abandonment rates, revenue for each channel and sales conversion rate (percentage of visitors who purchase).
Like we mentioned earlier success can be broken down to even smaller areas since there’s a lot that goes into getting profits. Always analyze other data points like page load speeds for insight into web performance and user experience.
Participation in discount, referral and loyalty programs is also vital.
Ricky Hayes is the Co-Founder and Head of Marketing at Debutify – free Shopify theme, helping dropshippers build high-converting stores in minutes. He is a passionate entrepreneur running multiple businesses, marketing agencies and mentoring programs.