This is the 1st blog in a series that focuses on 5 Costly Mistakes That Are Preventing Your Store From Scaling. You can catch the rest of the series here:
To win, you need to know what winning looks like.
If you don’t set the bar, how will you know when you hit it?
As an ecommerce business owner, there’s one tried and true way to know that your efforts are working and that what you’re doing is actually paying off.
Because marketing is simply a mathematical equation.
“If you spend X, it should produce Y,” right?
Key Performance Indicators are simply that – indicators of whether certain marketing efforts are winning or not.
If you track and monitor the right numbers, you and your marketing team will be able to wisely determine what marketing efforts you need to pour the gasoline on.
Let’s make sure you’re keeping track of the right ecommerce KPI metrics.
We’ll get to the list of specific KPIs you should be tracking for your ecommerce business in just a second.
But first, we’ll take a look at why these metrics are the ones to watch.
Here are four reasons:
They should always relate to your bottom line and be vital for reaching your profit goals.
You want to track ecommerce KPI metrics that are both well-defined and easily-quantifiable.
Old data doesn’t do you much good – unless it’s used in combination with real-time figures so you can more-easily track trends.
Probably the most important characteristic for your ecommerce KPI metrics to have is that the data they provide can be put into action to bring about change.
Now let’s get into the specifics.
Here are six important indicators that your efforts are working or falling flat.
A shopper putting something in their cart just to leave it there for all eternity sucks.
It’s the worst. (That’s probably why it’s called “abandonment.”)
Especially when you think of the massive amounts of effort that have gone into getting them to this point.
You created an appealing offer. (Way to go!)
You grabbed their attention. (Woohoo!)
You nurtured the heck out of them. (Yesss!)
You’re at the last stop. (Awesome!!)
And then...nothing. Crickets.
The sad fact is, it happens All. The. Time. (The data from 41 different studies shows that the cart abandonment rate for ecommerce businesses is a whopping 70%)
There are lots of reasons this happens, including:
When you track this number, you’ll have a better chance of honing in on the issue and increasing the number of shoppers who make it all the way to the finish line.
It’s not shocking information to find out that you need to be keeping track of how well your CTAs and landing pages are performing.
Looking great is part of the equation, but if they’re not converting, they’re like the pretty girl with no date to the prom.
Monitoring conversion rates tells the whole story.
The most exciting part about acting on this data is that little changes can have huge results.
Improve each step of your marketing funnel and reap big rewards.
Bottom line: You need to know how much it costs for you to get a customer.
Understanding and tracking this ecommerce KPI metric allows you to figure out how many customers you’d like to acquire in a certain period of time and how that translates into what you can do with your marketing budget.
Not knowing the customer acquisition cost can leave you with a failing business without understanding why it’s sinking.
The customer lifetime value refers to the net profit that each customer brings to your ecommerce business over the length of the relationship.
It may seem like a difficult and confusing concept to monitor, but it’s essential.
Not only will it give you insight into your ROI, but it will also help you comprehend your customer retention rate, as well.
Take a look at these two telling statistics:
This one’s not only obvious, but it’s also easy-peasy.
As you could probably figure out, average order value is an average of how much customers spend on your online store per order.
Increase this metric and you’ll also bring up your revenue, too.
When it comes to running your online store, what’s it all about?
Of course, your profit is what’s left when you subtract your costs from your revenue.
And this may be one of the – if not THE – best health indicators for your business.
When your gross profits are large, you can take that money and reinvest it into growing your business.
But if it’s low? Your ecommerce store is in danger of becoming stagnant.
So, is this an important ecommerce KPI metric to track?
The whole idea of ecommerce KPI metrics can be confusing and maybe a little overwhelming.
But if you want your online store to thrive, you don’t have a choice.
Tracking these six key performance indicators will ensure you're doing all that you can to keep your business moving in the right direction.
Need some help putting KPIs into action? Let’s talk!