Last updated on 07/13/2022
This article is intended for users who are already familiar with Google Analytics and other data analysis tools. You must understand what a traffic source, a conversion rate, and a cost per thousand impressions (CPM) are; we will not define them in this post.
Please read our post dedicated to these metrics if you are unfamiliar with them.
What are the underestimated key metrics for eCommerce brands?
Why are metrics important?
Metrics enable us to assess performance and make decisions as a group. In comparison to traditional marketing, digital marketing allows us to glean a wealth of data from internet consumers’ behavior and actions.
Metrics are used by the most successful eCommerce firms to make judgments.
The underestimated eCommerce metrics
Speed Time
To keep clients on your eCommerce website, website speed and load times at checkout are critical. Your eCommerce platform’s performance, efficiency, and speed are vital to your customers’ experience. Your website should load in less than three seconds.
You can use the Google Speed Test tool and gtmetrix to calculate yours and see what you should improve.
Cart abandonment rate is the percentage of shoppers who add items to their cart but then leave your online store without making a purchase.
Divide the number of purchases during a given period by the total number of add-to carts during that same period. Then subtract this value from one and multiply by 100 to find the cart abandonment rate.
Example: Last month, you had 10 purchases and 100 add-to carts.
1-(10/100)*100 = 90% of cart abandonment.
The average cart abandonment rate was at 88.05% in March 2020, according to Statista.
You can reduce it (and significantly improve your profitability) by using emails.
Klavyio is an email marketing application for eCommerce stores.
Revenue by traffic source. To assist you to optimize your marketing and advertising efforts, identify the major acquisition channel via which buyers locate and purchase from you. Paid acquisition channels, organic search SEO, direct, referral links, and others are all examples of this. To correctly evaluate, be sure to choose the suitable attribution view. Your Google Analytics report has this information.
Customer acquisition cost is the cost per acquisition for a new customer. To make money, the cost of gaining a client must be lower than the customer’s lifetime value (LTV) (lifetime value).
The total budget spent to acquire a new customer divided by the total number of new customers acquired over a certain period of time is the cost per acquisition of a new client (usually one year). You want to distinguish them from your year-round clients.
We’ve prepared an article about how to save money on this.
Customer lifetime value is the total amount you earn from a customer over his lifetime.
Knowing how much you can spend to get a customer and how much you need to spend to keep them allows you to know how much you can spend to acquire them.
Just click here to read our article on how to calculate and boost your client lifetime value.
The average order value is the average value of each purchase. To find out your, divide the total value of all sales by the number of orders. You will also find tactics to improve it in this article.
Customer Retention rate. It determines which clients return to your eCommerce website to make purchases. It measures your capacity to keep clients after you’ve gained them. Subtract the total number of new customers gained over a period from the total number of customers at the end of that period. Divide the result by the number of customers you had at the beginning of the period, then multiply by 100.
(Number of returning customers) / (Total number of customers) x 100 = Percentage of returning customers
This measure is directly related to customer satisfaction and loyalty, so its value should not be underestimated.
Net Promoter Score is a survey that measures your customers’ satisfaction with your brand and products. Customers who give a score of 9 or 10 are considered promoters; those who give a score of 7 or 8 are regarded impartial; and anyone who gives a score of less than 7 is deemed a detractor. Simply subtract the percentage of critics from the percentage of promoters to get the NPS score.
Many other metrics are important. Gross margin, bounce rate, and conversion rate, for example. These are well-known metrics, and you can see them at a glance on your Google Analytics dashboard.
Next, we will look at the metrics that come from digital marketing more specifically.
The important digital marketing metrics
“To overcome the limitations of standalone models and win over the skeptics in the C-suite, marketers often combine multiple tools, such as MMM for budget sizing, MTA for digital marketing, A/B testing for in-channel optimization, and surveys for brand performance.”
– Mc Kinsey
All traffic sources
MMM Marketing mix modeling is statistical analysis such as multivariate regressions on sales and marketing time series data to estimate the impact of various marketing tactics on sales and then predict the impact of future sets of tactics.
The fundamental goal of a marketing mix model is to figure out how different marketing activities affect a product’s business metrics. It is used by brands as a decision-making tool to assess the efficiency of various marketing activities in increasing return on investment (ROI).
MTA Multi-touch attribution is a marketing effectiveness measurement technique that takes into consideration all touchpoints in the consumer journey and assigns fractional credit to each, so you can see the influence of each channel on a sale.
MER Media Efficiency Ratio or Blend ROAS is the return on investment of your marketing expenses. Divide your total revenue by the total cost in the marketing budget to get it.
Ad-centric
You will find how to improve some of these metrics in this article.
ROAS per paid acquisition channel is the return on investment of the advertising spend. It calculates the revenue generated / budget spent on an advertising platform.
CPA, the cost per acquisition is the cost to obtain a conversion. Total cost / total number of acquisitions.
CPC (cost per click) total cost / total number of clicks
CPM Cost per thousand (impressions) is the cost of your ads to be displayed 1000 times (total cost / number of impressions) *1000
Unique Outbound CTR is the percentage of (unique) people who click on your external link call-to-action button to go to your website. It does not take into account people who click on your ads multiple times. (Total number of unique external clicks / total number of impressions) *100
Branding Lift is a post-brand ad survey that Facebook sends to people who have seen your ad. It allows you to measure your awareness campaign and find out if your ad is memorable compared to your competitors.
Conversion Lift
“conversion lift is comparing conversions between a test group that saw your ads and a control group that didn’t.[…] Conversion lift compares the actions of real people in randomized test and control groups to measure the additional online, offline or mobile app business driven by Facebook, Instagram and Audience Network ads.” Facebook.
Social Media
Engagement Rate on social media, including reactions, shares, and subscriptions, indicates the level of engagement your customers have with your brand.
It’s a good way to measure the engagement of your community and allow customers to give instant feedback on your products.
Emails
Open Rate (Email) is the number of people who opened your email divided by the total number of people who received your email.
The subscription rate is the number of people who have subscribed to your email divided by the number of visitors or people in a special email sequence who are asked to subscribe.
The subscription rate can also be adapted to other traffic sources if you run a lead generation campaign, for example.
Conclusion
You must define the appropriate KPIs to attain based on your objectives, which will then form the basis of your eCommerce client acquisition and retention plan.
Sources:
https://www.bigcommerce.com/blog/ecommerce-metrics/#conclusion
https://www.godaddy.com/garage/ecommerce-metrics/
https://thegood.com/insights/ecommerce-metrics/
https://www.facebook.com/business/m/one-sheeters/conversion-lift
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