4 Key Ecommerce Metrics to grow faster

In today’s data driven economy, most Ecommerce businesses rely on ecommerce metrics and KPIs to grow faster. They take the guesswork out of the game and help you make better decisions, insights.

Here are the most important ecommerce metrics to track and grow your business faster:

  1. Lifetime value of a customer
  2. Customer satisfaction
  3. Sales funnel
  4. Marketing ROI

If you’re an online retailer just starting or are trying to grow your business, implementing these four ecommerce metrics and KPIs will help your business grow faster.

1. Understand the Lifetime Value of a Customer

It is one of the key ecommerce metrics to track for every business. 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 ecommerce metric, use the following formula.

 Average Acquisition Cost ($) = Acquisition Spending (S) / No. of customers acquired

Determining ROI helps you improve marketing efforts. By comparing this with the customer lifetime value, you can check whether your CLV is lower, the same as, or higher than your average acquisition cost. Once you know your marketing ROI, continue tweaking it for the results you desire.
You can track the above-mentioned ecommerce metrics in your business dashboards to monitor business growth. They are the best KPIs for measuring the performance of an ecommerce business.
If you are looking for an easy to use, powerful and affordable business intelligence and reporting tool for MySQL, PostgreSQL & SQL Server, you can try Ubiq.

About Sreeram Sreenivasan

Sreeram Sreenivasan is the Founder of Ubiq, a business dashboard & reporting platform for small & medium businesses. Ubiq makes it easy to build business dashboards & reports for your business. Try it for free today!