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The 10 most important metrics in eCommerce (¡Stop Vanity Metrics!)

Designing and creating a profitable business model is one of the keys to the success of any eCommerce, but to know its profitability it is essential to always measure the results and know where to put efforts; know, in short, the main KPIs or metrics in eCommerce.

Running an online store can be very hard work. Many times a lot of money and time is invested in increasing the number of visits, but… How are these results measured? We are going to review the 10 main eCommerce metrics that serve to better understand the users of an online store and optimize sales, and that join others that are also relevant, such as ROAS.

1. The cost of acquiring a customer (CAC)

This e-commerce metric will be used to obtain the average cost of each eCommerce customer and also to know the profitability of marketing actions. The cost of acquiring a customer is calculated by dividing everything invested in sales (any action that aims to attract more sales) and marketing during a given period by the number of customers that have been achieved during that time.

2. Customer Life Cycle Value (CLTV)

It is one of the most important eCommerce metrics. The Customer LifeTime Value represents the total revenue that the user has generated in an e-commerce since their registration. It is determined by multiplying the average profit that the client has generated in a year by the number of years in which it is a client, subtracting the cost of acquisition (CAC).

3. Metrics in eCommerce: customer satisfaction

There are multiple tools that serve to interpret customer tastes through psychological graphs, search history or demographic studies, among others. But, beyond these statistics, Customer Service is a valuable source of suggestions and the best indicator of eCommerce customer satisfaction.

The Customer Service Advisor must have full knowledge of the products offered in the online store to meet the needs of buyers. Once the products that arouse the most interest have been identified, a personalization system for eCommerce can also be implemented that will help offer products and services related to their purchases.

4. The conversion rate (CR)

In general, when someone refers to obtaining buyers from an online store, they usually talk about the conversion rate. These eCommerce metrics serve to express as a percentage the number of visitors who were converted to buyers. The conversion rate is one of the main indicators of the success of an eCommerce.

5. Return on Investment (ROI)

Did you know that it is more profitable to keep a customer than to get a new one? That is what having a good metrics dashboard in eCommerce is for. Many online stores make the mistake of calculating the return on investment of their eCommerce taking as a sample the data of a single sale. To know exactly the economic value that a customer represents for the company, the ROI must be calculated based on all the purchases that the user has made, that is, the value of the customer's life cycle must be taken into account (CLTV ).

More important metrics for eCommerce

On the Internet, everything can be measured and it is precisely one of the most exciting points in the digital world. A good marketer checks the performance of campaigns on a daily basis, accesses eCommerce platforms to monitor the metrics daily, see if the "back to school" campaign is working ... The data is liked, but sometimes this can cause us to be looking at some not very relevant metrics and losing sight of the most relevant KPIs for our business. Next, we are going to focus on the most actionable metrics in eCommerce.

Death to Vanity Metrics in eCommerce

"Vanity Metrics" or vanity metrics is an Anglo-Saxon term that startups often use to refer to metrics of little value for an eCommerce. For example, an eCommerce manager can boast of the number of visits or page views, a classic in Analytics. However, if we want actionable metrics in eCommerce we have to go further.

The number of visits if you do not cross it with the conversion rate is meaningless. You may be having poor quality affiliate traffic and believe that you are doing important branding work. Another clear vanity metric could be Twitter followers or Facebook likes.

Another slightly more complex example is considering the overall conversion rate to qualify an eCommerce. It is not enough, you have to assess the conversion rates for each of the traffic sources to fully understand what is happening.

Each industry is different and you must find the actionable metrics in eCommerce that best suit your sector. Let's take a case of the "Pharmacy" sector: if my eCommerce is well positioned for drugs, I'm sure I will get a large number of SEO visits, but many will be posology inquiries, side effects of the drug in question ... What is the result? Low conversion rates. An error of interpretation would lead to think that we have poor usability when it is really a matter of the type of traffic, which comes to us through medicines and query searches. How do you convert that KPI into actionable metrics in eCommerce? Try to position myself for more transactional keywords.

#Vanitymetrics: page views, fans on facebook, conversion rate without detail by source #eCommerce

ECommerce metrics

Depending on the case, there can be several actionable metrics in eCommerce. Here are some of them:

6. Conversion rate according to traffic source

We must analyze the conversion rate (Conversion Rate) for each of the sources and see its evolution. Variations according to the eCommerce handle incentives, depending on temporalities or even days of the week. For example, it is not a myth that conversion rates tend to increase on Mondays.

7.% of new VS recurring visitors

A healthy eCommerce must grow in recurring users. Recurrence is one of the keys to the profitability of an eCommerce, in addition to managing affordable CACs for my business. If users don't come back or I don't have a working CRM system, I'm going to have trouble surviving.

8. Evolution of direct traffic

An increase in direct traffic means greater brand recognition. Users who already know me should buy more from me. If I have a low% conversion in this section, I may have usability problems.

9. Average basket value

It is very important to see the evolution of the average basket or AOV (Average Order Value). For example, discounts can drop the average ticket; however, by working well with cross-selling and recommendations, we can get buyers to add more than one product in the same transaction.

10. New records

The myopia and lack of vision leads us to think about generating sales in the shortest way: from the click to the product page. A well-developed lead strategy can be one of the most important assets of eCommerce. We definitely recommend optimizing the conversion to registry funnel.

#ecommerce #metrics: CR, direct traffic, average basket, captured leads, recurring traffic

These are some actionable metrics that I consider most relevant; Which are for you? The important thing is to know how to manage and identify those that are relevant for each eCommerce and define KPI’s that lead to actions and therefore good results for my business.

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