November 9, 2020 | Article | by REQ Marketing | Analytics
4 Key eCommerce Data Points You Should Be Focusing On
When running an eCommerce business, you are inundated with endless data. From average order value to website activity, you’re able to know it all.
But, while an influx of data sounds like a good thing—especially when compared to a lack of information—it can be overwhelming. Soon you’ll find yourself nitpicking every little metric, to the point of confusion or anxiety.
Instead, eCommerce website owners should pinpoint a few key data points on which to focus and analyze. These data points will help you understand how successful your website is and what you can do to actively improve it.
To help you grow your eCommerce business, we’ve identified four critical data points where you should place your focus. Adding these metrics to your reports will give you a comprehensive look into your website’s effectiveness and ability to drive sales, as well as consumer satisfaction.
Start tracking these four eCommerce metrics:
1. Customer Lifetime Value
As defined by Shopify, customer lifetime value (or CLV) refers to the total sum of money a customer is expected to spend on your business throughout their lifetime.
We don’t want customers to make a one-time purchase and never return. Instead, we strive to have them become loyal, repeat customers who make several purchases, and even refer others to our store.
There are a few ways to calculate CLV, but the most common method is as follows:
Customer Lifetime Value = value of a typical customer purchase X average number of customer purchases each year X average length of the customer relationship (in years)
For eCommerce businesses, we recommend calculating this data point in two distinct ways:
- Overall Customer Lifetime Value
- Customer Lifetime Value by Source
For the latter, determine how each customer landed on your website. Was it from a search engine like Google? A social media site? One of your email marketing campaigns? From there, determine what the average CLV per source is. This is an excellent way to determine which marketing avenues are driving the best results for your store.
2. Conversion Rate
All eCommerce pros know that driving potential customers to your website is only half the battle. Once they’re there, you still need to convince them to make a purchase.
Tracking your eCommerce company’s overall conversion rate is critical to understanding how well your website is performing.
For instance, a high conversion rate indicates that the existing user experience (UX)—including website design and content—is effective in driving viewers to make a purchase. On the other hand, a low conversion rate reveals that there’s a real problem with your website’s UX.
It’s critical to remember that conversion rates will vary per industry. Consumer electronics experience an average conversion rate of 1.4%, while health enjoys a 4.6% conversion rate.
When you first start measuring conversion rate, don’t be surprised by the low results. The average eCommerce conversion rate is only 1-2%.
Additionally, while tracking the site’s overall conversion rate is important, it’s also wise to monitor other types of conversions such as:
- Additions to cart
- Email signups
- Coupon/discount code usage
3. Cart Abandonment Rate
When a user adds products to their online cart and then leaves without completing the purchase process, this is known as cart abandonment. All eCommerce companies deal with cart abandonment, but many fail to understand how many users are failing to press “Buy.”
By measuring your website’s cart abandonment rate, you’ll begin to uncover what leads to these fleeing customers. Common problems include:
- User experience errors
- A confusing or dysfunctional checkout process
- Shipping & handling costs
When looking to lower an eCommerce site’s abandonment rate and, in turn, increase the conversion rate, try these tactics:
- User Experience Review - Thoroughly review the website’s UX design. Can users intuitively understand the checkout process? Does it function properly on every device?
- Remarketing Strategies - Remarketing ads on social media, search engines, and display networks work to remind consumers about their idle shopping carts. The goal of these strategies is to bring users back to the website to complete the purchase.
- Email Marketing Messages - Program your email marketing software to send messages to users and remind them to return to their cart before inventory runs out. Check out these excellent examples of cart abandonment emails to spark your inspiration!
- Exit Intent Pop-ups – As a consumer goes to leave your website—likely with items in their cart—program your website to display a pop-up urging them to return. This pop-up can include a strategic discount, free product, or message designed to entice shoppers to complete their purchase.
4. Email Marketing & Remarketing Data
As you work to drive more new and repeat users to your site, you’ll need to pay attention to two important marketing data points:
- Email marketing signups
- Remarketing lists
Email marketing is one of the strongest promotional tactics an eCommerce business can leverage, beating out social media and paid ads by far. Email marketing campaigns generate, on average, $42 in revenue for every $1 spent on promotion.
With this in mind, eCommerce pros must pinpoint the website’s best areas to aggregate email addresses. Common tactics include pop-up boxes, discount incentives, and during the checkout process.
As a result, continue to monitor the size of your email marketing subscription lists and the results of each email campaign.
Additionally, remarketing strategies are built to bring past customers back to the eCommerce site. Often, many users don’t purchase due to a lack of personalization in the first store encounter.
Remarketing ads and lists allow marketers and eCommerce professionals to target previous website visitors, deliver personalized ad experiences, and work to bring them back to the website to complete a sale.
In fact, 44% of consumers say they are more likely to become repeat buyers after a personalized shopping experience.
Focus on remarketing data points such as conversion rates and user activity to monitor the performance of this marketing tactic.
Accurately Monitor eCommerce Data for the Best Results
Without monitoring specific data points, your eCommerce company simply won’t grow. Track these four data points for the best success!
And, if you need help understanding these analytics or knowing where to begin, REQ is always here to help.