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8 Important Metrics Every E-Commerce Business Should Track
Ecommerce metrics let you know your business strategy’s direction and whether they align with your goals.
Tracking metrics for your business is vital because it helps you understand how your customers interact with your website.
It also allows you to identify areas of improvement to improve conversion rates.
This way, you can ensure that the money, time, and effort spent on marketing are not wasted.
In this day and age, businesses must track metrics. It helps them measure marketing success and identify where they are making a profit and losing money.
Before we cover the essential metrics your e-commerce business needs to track, let’s first cover what e-commerce metrics are.
💡 Pro Tip
Ruler Analytics can help make your marketing reporting easier. We provide marketers with the data they need to connect their marketing activities to closed revenue and help them track important metrics like ROI, ROAS and CPA.
Learn more on how to measure your marketing with Ruler
E-commerce metrics are the different ways we can measure the success of an online business.
For example, a metric people often use to measure the success of e-commerce businesses is conversion rate.
You use these metrics to measure the performance of an online store. It is essential to know
these metrics to evaluate your website and make changes if needed.
Every e-commerce business needs to understand what its metrics are to ensure they are on the right track.
If you want to boost your e-commerce conversions, you have to first know your current
conversion rate.
Otherwise, you will have a more challenging time figuring out how to improve conversion rates in the first place or what needs changing.
The conversion rate is the number of website visitors who complete a desired action. For example, a visitor could make a sale or fill out a form.
Conversion rates are significant because they show how your e-commerce business performs in customer acquisition, sales, and marketing.
You can calculate your website’s conversion rates by dividing the number of conversions by the total number of website visitors. This metric will provide insights into what actions you need to take to increase your conversion rates and make more sales.
💡 Pro Tip
We analysed the data in Ruler to give you the average conversion rate across fourteen different industries. You can find relevant find statistics and data in our blog post on average conversion rates by industry and marketing source.
The customer acquisition cost is a metric that helps track the profitability of your e-commerce business.
Related: Easy ways to reduce customer acquisition costs
It is the total cost of acquiring a customer. This metric enables you to measure how much you spend on marketing and advertising campaigns to reach new customers.
Customer acquisition cost is crucial because it allows us to:
One of the most critical metrics for any business is customer lifetime value.
It is a metric that will help you understand how much revenue your customers will likely generate throughout their relationship with your company.
Customer lifetime value has been one of the most accurate predictors of company success.
Related: 6 tips on how to increase customer lifetime value
Tracking customer lifetime value can help you identify which customers are worth keeping and which are not, so you can focus on retaining only those with high revenue potential.
With this information, you can determine what marketing campaigns work best for each segment and tailor your marketing strategy accordingly.
The abandonment rate is the percentage of visitors who leave your website without converting.
It is an essential metric because it helps you understand how well your marketing efforts are working.
Understanding customer behaviour and abandonment rates can help your business decide what to do next.
To track the abandonment rate, you need to install a tracking code on your website that will count the number of visitors who leave your site without making a purchase or completing any other desired action.
The subscriber growth rate is a metric that every e-commerce business should track. It is the percentage of the total number of subscribers who have purchased in a given time. The higher the number, the better for your business.
This metric allows you to measure customer engagement and helps identify potential problems with your customer service or product quality.
It also provides insights into how well your marketing strategy is working and shows how much potential you have for future growth.
You calculate the subscriber growth rate by dividing the number of new subscribers by the total number of subscribers to find out the percentage change. This metric applies to any e-commerce business, whether an online retailer or a subscription service.
Tracking the average order value is a metric that helps you understand how much your customers spend on each purchase. It is a standard metric used in the retail industry to measure customer loyalty and sales performance.
Understanding what your customers want and how they spend their money is essential.
With average order value, you can visualise how much customers are spending on your website and determine where they spend the most.
You can use this information to optimise your marketing campaigns and products to ensure that your customers spend more time and money on your website.
Retaining customers is a challenge for any e-commerce business. The retention rate of customers is a metric that can measure how well the company has maintained its customer base.
The higher the retention rate, the better chances of making more sales.
The key to increasing customer retention rates is understanding what drives them and focusing on those factors.
For example, if the company finds out that their customers are not happy with shipping times, they need to make sure they do everything they can to reduce and make it faster.
Tracking your average profit margin is vital for your e-commerce business, and understanding how it changes over time will help you make better decisions.
Your average profit margin is a great tool to help you understand the health of your business.
You can use it to compare different products or services, analyse pricing, and answer questions like: “What’s the best way to increase my margins?”
These metrics can help diagnose issues of your e-commerce business in different ways.
It is also helpful in letting you know where successes are coming from so that you can replicate them and generate more revenue.
Therefore, ensure that you track these metrics to make informed decisions and changes regarding your business.
