What are the most important metrics for e-commerce companies? -

WHAT ARE THE MOST IMPORTANT METRICS FOR E-COMMERCE COMPANIES?

In Lewis Carroll’s children’s classic Alice in Wonderland, at one point in the narrative, one of the characters says: ‘If you don’t know where you’re going, any path will do.’ Transposed from the pages of fiction, this quote provides an important lesson about business: if you want to reach a specific goal, you must choose how you will achieve that end. And for that, you will need an eCommerce metric.

These are ways to measure whether your enterprise is on track and close to reaching the goals set for a given period. In e-commerce, this type of indicator is essential for maintaining and optimizing the strategy, always seeking to enhance its results. So, it is for sure that you will need the eCommerce metric.

HOW IMPORTANT IS IT TO MONITOR THESE INDICATORS IN YOUR E-COMMERCE?

Performance metrics act as a kind of compass that will indicate whether you are on the right track to achieve your goals. They are closely linked to your strategy and show your e-commerce performance clearly and measurably. Ecommerce development is done accordingly.

FACILITATE TREND IDENTIFICATION

In 2006, online marketplaces were still not widespread. Even Amazon saw the potential of this possibility and opened its own virtual shopping mall, becoming today one of the major players in this sector. Being attentive to the market and the metrics of e-commerce is a way to be inspired by Jeff Bezos’ company and ensure its growth. At present, in the eCommerce business, this is important.

ASSIST IN PLANNING THE NEXT STEPS

Having a historical database is essential to plan future store strategies more accurately. This is because, from this information, it is possible to predict behaviors, sales spikes, and periods of stagnation of goods.

Thus, it is possible to make much better decisions and learn from past mistakes, using these indicators to predict the business’s next steps.

To help you with this, we have separated 12 critical metrics for you to measure in your e-commerce. Check out the eCommerce conversion rate also.

ROI AND ROAS

ROI (Return on Investment) shows precisely what the return on the amount you invested in a given action to publicize your e-commerce. In addition to presenting whether or not you should increase your investment.

Imagine that the total investment to make a smartphone available in e-commerce was R $ 800, including costs with the supplier, stock maintenance, advertisements, etc. The final price for which the device will be sold will be R $ 999.

The problem with ROI is that it is only possible to have the correct calculation after a financial close with various information that is not so easily treatable. For this reason, it is advisable to use a very similar metric which is ROAS (Return on Advertising Spend), which measures revenue from a medium, or a set of them, by comparing cost and revenue directly. Use the eCommerce business. You can find the best solutions now.

ROAS = REVENUE FROM MEDIA / INVESTMENT COST

Let’s assume that R $ 5,000 was invested in paid media campaigns, and, from these ads, a profit of R $ 75,000 in sales was obtained. Thus, the calculation would be:
ROAS = R $ 75,000 / R $ 5,000
ROAS = 15

AVERAGE TICKET

This is another primary metric that every business owner should use to calculate approximately how much each customer spends on an online store. It averages spending on purchases based on total revenue and the number of consumers for that period.

If your average ticket is low, give benefits, such as free shipping on purchases over a certain amount or providing free gifts. Another possibility is to use the progressive discount strategy, in which the price reduction increases as the amount spent by the consumer increases. This way, you will raise your average ticket per order, and ultimately, your profit. Using social media marketing helps a lot in this.

AVERAGE MONTHLY TICKET = REVENUE OF THE MONTH / NO. OF CUSTOMERS OF THE MONTH

Thus, if e-commerce has invoiced R $ 300,000 in one month and, in that period, had 800 customers, the average ticket would be:

Average Monthly Ticket = R $ 300,000 / 800

TMM = R $ 375

Thus, the average consumer spending in that month was R $ 375. It is important to remember that these values vary in reality, and this is just a way for you to make a systemic analysis of how shopping is going in the business.

ORDER APPROVAL RATE

There is a big difference between the orders taken and orders paid. The customer simply abandons some of these, that is, unpaid. Often the reason behind this is the use. Since it is not necessary to pay on time, the customer has the chance to think twice if he will actually make the purchase.

If you want to know the order approval rate, divide the number of payments made by the total orders, and multiply by 100 to get the order approval rate.

Approval Rate = (Paid Orders / Total Orders) x 100

THUS, IF IN ONE WEEK 500 ORDERS WERE REGISTERED, BUT ONLY 300 WERE PAID, WE WOULD HAVE:

Approval Rate = (300/500) x 100

Rate = 0.6 x 100

TxA = 60%

That is, in this example, only 60% of the orders placed have been completed. Other factors can also influence this metric, such as the credit card operator’s refusal or lack of limits. One way to reverse this is to offer several payment forms, giving the consumer options to complete the transaction.

CONVERSION RATE

This metric is versatile and can be used for various purposes, such as sales, downloads, registration, or subscriptions. The amount obtained will depend on your objective. If the conversion rate was low, it must be analyzed what happened and how to improve it based on actions that optimize the result according to your expectations. This is important for the eCommerce conversion rate.

TO CALCULATE IT:

Conversion Rate = (Converted Customers / No. of Visitors) x 100

Imagine that a conversion page received 10,000 visits in the last month and, after that, 30 consumers were converted – that is, they fulfilled the desired action, which in this case, is the purchase of a product. Here it looks like:

Conversion Rate = (30 / 10,000) x 100

TxC = 0.003 x 100

TxC = 0.3%

So, the conversion rate for that page is 0.3%

AC (ABANDONED CART FEE)

It is a handy metric to measure how many users are abandoning the cart in their e-commerce. But if you realize that the rate is relatively high? Calm. Evaluate if the form of payment, condition, or value of the freight is under the market values. Consider having more variety of payment, or if applicable, apply a survey to determine your consuming public opinion. With the social media marketing eCommerce SEO, you can measure and improve this..

One way to reverse this situation is to opt for an e-commerce platform to recover abandoned carts. The shopkeeper can develop a targeted strategy by sending marketing emails to the logged-in customer who abandoned the shopping cart, seeking to resume the sale.

One way to calculate this metric is from the ratio between the number of visitors who have not completed the checkout by the total number of visitors who started the checkout, multiplying the result by 100:

Cart abandonment rate = (number of visitors who did not complete the checkout/number of people who started the checkout) x 100

IF 1,200 STARTED A CHECKOUT IN A VIRTUAL STORE AND ONLY 700 COMPLETED THE PURCHASE, WITH 500 GIVING UP ON THE TRANSACTION, THE CART ABANDONMENT RATE WOULD BE:

TxAC = (500/1200) x 100

TxAC: 0.4166 x 10

TxAC = 41.66%

TxC = 0.003 x 100

Thus, the e-commerce cart abandonment rate is R $ 41.66%.

BOUNCE RATE

Wish to know the number of people is coming to the site? But, what if you notice that the bounce rate is high? Yeah. This metric shows that users left without interacting with anything on the page at all.

This can happen because it is a product page with a high price, lousy description, or the user did not click, for example, on the buy button. You need to measure all he matrices and optimize your product page for better conversion.