Are you tired of online shoppers who fail to complete transactions on your site? Are you frustrated by the amount of marketing you’re doing, only to have less than stellar sales? It might be time to upgrade your ecommerce analytics. Online entrepreneurs who fail to monitor key performance indicators setback their companies from the start. Make sure you are measuring the following five critical KPIs if you want your online ecommerce business to succeed and flourish.
AOV – Average Order Value
If you’re not measuring your average order value, you’ll have no idea as to whether your marketing efforts are resulting in increased sales per customers. The cost of customer acquisition is high; you are better off selling more to each customer than trying to attain new customers. When you make measuring AOV as part of your business growth strategy, you are more likely to spot opportunities that other online entrepreneurs might miss.
MoM – Month over Month
Just as you should be measuring your average order value, you should also be tracking your month-over-month growth rate. If your sales stay the same (or decline), it is time to kick your customer outreach efforts into high gear. Ecommerce business owners cannot afford to be satisfied with a flat sales rate; there are too many competitors hunting for the same customers to accept mediocre sales cycles.
You should monitor your conversion rates to uncover sales opportunities. Something as simple as the wrong color on your ‘buy’ button can affect your conversion rates. Make it your mission to improve your conversion rates each month using every method at your disposal. Improve your product descriptions, compress your image sizes, and update your call-to-action buttons to give your conversion rates a boost.
Customer Acquisition Cost
Tracking customer acquisition costs is crucial for improved profitability. Far too many entrepreneurs fail to monitor this KPI and then wonder why their expenses are outpacing their revenues. If it costs you more to acquire a customer than they’re worth in sales, your LTV (lifetime value) rates are going to be awful.
Shopping Cart Abandonment Rate
Monitoring your shopping cart abandonment rate is another essential factor in becoming a successful ecommerce entrepreneur. If customers are adding items to their shopping basket but not completing the checkout process, you have an opportunity to increase your sales. Once you discover the reasons shoppers are abandoning their purchases, you can make the necessary site adjustments to ensure you have happy customers who aren’t afraid to complete the checkout process. Make sure to display a seal or verification during the checkout process that shows your store uses secure ecommerce payment processing. Keep in mind, anything from costly shipping charges to the lack of a guest checkout function can cause buyers to shop with your competitors.
Measuring crucial KPIs can improve your business’ profitability and increase your buyer satisfaction ratings. If you are not measuring these basic KPIs, you can’t possibly know if your company is succeeding or failing. Start tracking these important aspects of your ecommerce business and you’ll be amazed at how many growth opportunities you discover.