Top eCommerce Metrics for Growth

June 15, 2017
June 15, 2017 Imran Selimkhanov

Time to read: 30 min

I wish I could stress the importance of what a Key Performance Indicator is and actually have you listen, but luck has it – most executives, bloggers, agencies, and myself – have used the term so much in meetings, posts & eBooks, it’s lost all fucking meaning to the new eCommerce and website owners hungry for relevant fast knowledge.

Let me put it straight to you, if you don’t monitor the below KPIs for your business, or start doing it asap, you will not take full advantage of growth intelligence. You’ll end up focusing on the wrong shit and tweaking analytics platforms for hours on end without avail.

As I’m helping you get quick wins, here’s a list of absolutely critical eCommerce KPIs you should know in your sleep. All of the below should be analyzed about once a week to understand and grasp opportunity of positive trends or take action if you see early warning signs such as spikes in bounce rates, abandoned carts, orders, etc. Remember, when viewing these metrics you should always be viewing them for periods of time in order to understand short & long term trends.

  1. eCommerce Conversion Rate: a measure of the rate at which shoppers (visitors) convert to being your customer (purchasers). The conversion rate is the number of conversions divided by the total number of visitors. For example: if an eCommerce site receives 800 visitors in a month and has 25 sales, your conversion rate would be 3% (25 sales divide by 800 visits).
    • Secret Tip: segment your conversion rate by visitor type, the simplest being; mobile, vs tablet vs desktop visitors. Other favourite and super effective segmenting should be done by region to understand where your shoppers are coming from.
  2. eCommerce Total Orders: the amount of orders you have received in a given time period. Total eCommerce orders is a quick indication of your order volume health check, are they rising, falling or stagnant? This will also help you understand your business’s “seasons” to help you craft PPC campaigns.
  3. Cart Abandonment Rate: the rate at which customers leave your cart without completing the order. Calculation: Total initiated transactions (users are at the checkout page) divided by total abandoned incomplete transactions (abandoned carts).
    1. Tip: Typical cart abandonment rate is 60% to 80% with the average sticking around 70%
  4. eCommerce Abandoned Carts: the amount of potentially lost sales (when shoppers fill up carts, and do not proceed to completing the purchase). This metric allows you to understand which product categories, products or product combinations are consistently being dropped. It might be a symptom of a high priced product, high shipping costs, complicated checkout experience or a website bug.
    • Secret Tips to to reduce abandoned carts:
      • make your shipping & return policy super easy and non-variable
      • make sure you have an abandoned cart saver app (send emails with all abandoned cart content to the user)
      • use one time welcome coupons to motivate the purchase
      • adjust the price of the product or remove the product from the shop
      • simplify the checkout experience…make it one page
      • have a SSL certificate on the cart & purchase pages
  5. Bounce Rate: a measure of how fast users leave your site upon visiting it (Google Analytics measures it as a single page session). Bounce rate is a quick indication of whether or not something is significantly wrong with your homepage, category or product pages. Usually it’s due to product irrelevancy (the wrong consumers looking at the product), boring design, slow page load times etc.
    • Secret Tips to reduce bounce rate
      • Enable a coupon pop app to save users that are about to leave your site
      • Ensure your eCommerce PPC campaigns are highly targeted to ensure that the traffic coming to your site is relevant
  6. Website Average Session Duration: The total duration of sessions (in seconds) divided by total sessions.
    1. Secret Tip: This metric helps you understand your websites engagement level to the customer. Track / look at this metric along side the bounce rate to understand up/down trends in engagement.
  7. Website Pages/Session: the amount of pages a user browsers through on your site, the unofficial industry goal is having 2+ pages / session.
    1. Tip: analyze this alongside bounce rate and average session duration to have a solid understanding of user engagement.
  8. eCommerce Average Order Value: The average dollar value of all of your orders. This helps you instantly understand and forecast income. Also helps with decision making on pricing of key products. Tip: this metric is key to understanding Average Customer Lifetime Value (explained below)
  9. eCommerce Repeat Customer Rate: the percentage of customers that made an order which come back to make a 2nd purchase within a given period of time. Calculated by taking the total amount of repeat customers by the total amount of customers within a given time period.
    1. This metric is super important simply because repeat purchases are the lifeline of most businesses, having a low repeat purchase rate might indicate issues with customer service, slow shipping or poor product or service quality. Conversely, having a high repeat purchase rate means you’re acing your customer and product quality eCommerce game.
      1. Note: if you’re in an industry of products that have low to none repeat purchases, you might not care about this metric ex: hot-tubs, mattresses, wall paper, motor boat engines, etc.
  10. Website Traffic: how much total traffic you are getting to your website. A super important metric especially when segmented based on region, device, browser, app. This metric’s daily, weekly and monthly performance will instantaneously tell you if something is wrong or right about your marketing, eCommerce platform performance, seasonal trends, etc.
  11. Website Sessions: All interactions that a user has with your website in a given time period. It can be page views, social interactions, purchases, etc. Sessions typically last for 30 minutes, however in most analytics platforms you can adjust this down to a few minutes or even seconds
  12. Website Total Users: Total amount of unique instances a user has entered to your website. Note: Google Analytics might double count one user as two uniques users if the user has visited your site via cellphone and desktop (Analytics platforms measure this by setting cookies on users devices). This metric is useful in roughly understanding how many users are visiting your site.
  13. Website New Users: Visitors that did not have cookies before visiting your site.
    1. Tip: If you divide New Users by Total Users and compare that for a period of time you’ll roughly understand your new user growth rate.
  14. eCommerce Average Customer Lifetime Value: Customer Lifetime Value is the most important metric in retention analytics. It is the average amount spent by each customer over their lifetime at your shop. This lets you know how much you can forecast to spend in order to get attract a new customer.
    1. Note: The three key KPIs required to measure average customer lifetime value are: Average order value (AOV), Purchase frequency, Time period.
  15. Email bounce rate: This is the percentage of emails that where not delivered to your intended mail list.
    1. Tip: isolate the non-delivery emails into their own mail list/group, try delivering the message to them again, then remove the ones that are 100% inactive/fake/not working.
  16. Email Open rate: The percentage of emails that are opened (once you get a solid amount of opens, you should start optimizing for click through)
  17. Email Clickthrough Rate: The percentage of email recipients that clicked on links in emails. Calculation: Unique Clicks divided by total Delivered Emails
  18. Email Conversion Rate: the Percentage of people that purchased on your website after clicking a link from an email. Calculation: total sales from emails divided by total emails delivered.
  19. Top selling products: The most highest selling products you have, allows you to understand where to invest Ad money, newsletter efforts and coupon pops.
  20. eCommerce Purchase Funnel: how users journey through your site to making a purchase, reality check; the funnel always gets smaller and it’s up to you to figure out how to optimize it.
    1. Top Viewed Categories: the most frequently visited category pages
    2. Top Viewed Products: the most frequently visited product pages
    3. Added a Product to Cart: how many product where added to the cart
    4. Initiated Checkout: how many users have initiated the checkout process by visiting the checkout details page
    5. Completed Checkout: how many users have actually made a purchase. Remember, you use this metric to divide by the total website visits to get your conversion rate.
  21. Website Referrals: sites from which traffic comes from. This lets you understand what web sources you should be investing it, and, where your targeted shoppers are most likely to hang out at. Very useful if you are trying to understand where to invest in for paid advertising AND to check if your existing paid advertising is driving traffic from the sources you wanted. Alternatively, if traffic is coming from malicious sources, block the sites on your eCommerce server and filter the source out of Google Analytics.
  22. Ad Click Through Rate: the rate at which users click on your Ad. Calculation: Ad Clicks divided by Ad Impressions
    1. Tip: to increase click through rate, hyper-target your Ads to minute customer details such as the geographical region the Ad will show in, Sex, Age, Interests, Occupation and key word search terms the user is most likely to use. Oh and, have minimal words on your display Ad along with a stellar high quality picture of a person using your product.
  23. Ad Impressions: how many times your Ad has been shown to a user. Important metric to know the general performance of your Ads, are they even showing at the amount you expected them to be?
  24. Ad Clicks: how many times a user has clicked on  your Ad. Ad click are best filtered by region from where the clicks came from, this will help you understand where to focus your Ad budget.
  25. Ad Cost Per Click (CPC): how much the average cost is to get a click from a user. This will help you understand if it is even worth the money to continue a campaign.
  26. Coupon Pop Saves Rate: out of how many coupon popups which have been triggered, did the user actually end up providing and email or browsing around the site longer.
  27. Total Sales: the total sales you have made for a selected period of time. Monitoring this metric along side the Conversion Rate will help you understand your sales growth. Segment this by category to  get a deeper understanding of top performing product categories.
    1. Secret Tip: For a selected period of time, compare your total cost / Ad Spend of the PPC campaign to the Total Sales, this will help you determine if the marketing campaign is worth the Ad Dollars or not.
  28. Top search queries: Google Search Console and Analytics paired will show you what users have searched for in order to get to your website, use this intelligence to optimize key word driven campaigns and brush up on the copy of your Ads and even your product pages.
  29. Gross Profit Margin: best calculated over a period of time, the gross profit margin allows you to get an idea of profitability and the feasibility of your pricing model.
    1. Calculation: for a set date range, Revenue minus Cost of Goods Sold, divided by Revenue.
  30. Traffic by Region: not a metric, rather a segmentation. Know where your traffic is coming from and the top selling geographical regions. This will help you focus your budget to the right place and people and eliminated wasted dollars. Also, knowing where your traffic is coming from will help you discover new regions of interest.
  31. Purchases by Region: just as above, purchases by region will allow you to understand who actually spends money on your Ads. This should be view in alongside the Traffic by region to get an understanding of regional interest in your product.
  32. Abandoned Carts Saved: allows you to understand how many dropped carts where saved by an email follow up via your Abandoned Cart Saver App. Compare this with the total dropped carts to get an understanding of the effectiveness of your cart saving effort to then optimize/fine tune your follow up messaging.
  33. Peak Days & Times of sales: Know when your shoppers some to visit you, when are users most engaged and from what region? This will help you optimize your money for Ad spend so that you can allocate budget dollars wisely to peak periods of use.

Thanks for reading – for the sake of your business, please do take the time to correctly setup analytics tracking for your business and thoroughly understand the metrics that will help you drive forth business decision posed for growth.

If you need a hand setting these metrics up in Analytics tools, building a custom Excel report or a custom web dashboard, give us a shout, I’ll review, tune or setup analytics accounts to help you understand the key metrics you need to keep the shop performing.

%d bloggers like this: