In today’s data driven economy, most Ecommerce businesses rely on ecommerce metrics to grow faster. They take the guesswork out of the game and help you make better decisions, insights.
Here are four such key ecommerce metrics to grow your business faster:
- Lifetime value of a customer
- Customer satisfaction
- Sales funnel
- Marketing ROI
If you’re an online retailer just starting or are trying to grow your business, implementing these four metrics will help your business grow faster.
1. Understand the Lifetime Value of a Customer
This tells you how valuable a customer is over the lifetime of your business.
To determine a customer’s lifetime value — CLV, or CLTV — use the following formula.
CLTV= Present Value (Average profit generated per year X Number of years) – Acquisition Costs
A customer’s lifetime value is calculated using all interactions a customer has with your business.
Customer lifetime value is significant because it’s more cost effective to keep an existing customer than to acquire a new one.
2. Monitor Customer Satisfaction
Customer happiness is the most important reason why business grow or fail. Good Customer service is the best way to ensure customer happiness. It’s best to perform customer service in house. You know more about your business and products than anyone else. Also, it shows that you truly care about the customer experience, which is what drives repeat business.
When listening to customers, you can learn:
- Do customers find & understand what you are offering
- Does it match customer preferences
- Number of complaints
Now that you’ve got user information, it’s time to implement satisfaction metrics. Feedback requests and surveys are good ecommerce metrics to grow customer satisfaction. Use the information to improve performance.
3. Measure the Sales Funnel
Online tools can track customer information. But they can also measure the sales funnel. Use Advanced Segments on Google Analytics to measure:
- Page traversal
- Conversion rates
- Types of visitors
Also, you need to use other tools to measure sales metrics.
The call-to-action and purpose should be apparent to the visitor without the need to navigate anywhere. By keeping navigation simple, your visitors are focused and will navigate through the conversion path that you’ve created.
Use A/B testing to determine helpful improvements. Try different page layouts to see which one converts more. Clarity, headlines, large “red” buttons, and calls-to-action are all elements that will greatly enhance the effectiveness of your landing page.
You need to see which source provide maximum traffic. This will tell which marketing method to use. Are you successful with search engine optimization? What keywords are people searching to find you?
4. Determine the Marketing ROI
Ecommerce sites typically rely on search engine marketing, affiliate marketing, and more to gain visibility and traffic. Calculate the margin per order and the customer’s lifetime value. For repeat business, base the calculations using CLV for a more accurate prediction. Determining marketing ROI will let you know which marketing works and which doesn’t.
To calculate this, use the following formula.
Average Acquisition Cost ($) = Acquisition Spending (S) / No. of customers acquired