Resources for Small Business

7 Important Metrics That You Should Consider For Your Online Store

Once your online store is up and running and doing good business, it is imperative that you start looking at the metrics to judge your performance. It helps you identify your strengths and your weak areas that needs focus, quantitatively. In this post we have shortlisted 7 actionable metrics for your online store that can help you accomplish that.

1. Customer acquisition cost

How?

= total marketing spend/number of sales

What?

A customer’s decision to visit your site and make a purchase is influenced by several factors. It might be your marketing effort, SEO, campaigns etc that brought the customer to your site and all these activities cost you money. In a nutshell, there is some amount of money spent in bringing every customer to your site and getting them make a purchase and that is called customer acquisition cost.

Why?

It would help you identify your best acquisition mediums and channelize your marketing budget to the potential marketing channels.

2. Shopping cart abandonment rate

=Number of abandoned carts/ total number of shopping carts

What?

When a customer visits your store and adds a product to his cart, then he becomes a potential customer. However later when he leaves your store without making the purchase it means bad news for you because a) some revenue is spent in getting every customer to your store b)he was a potential customer.

Why?

Shopping cart abandonment has turned out to be major issue for store owners as whooping 60 to 80 percent of online shoppers leave their cart without making the purchase. There could be several reasons attributed to this like complicated checkout process, limited payment option, hidden charges etc. Check out this blog on how to reduce shopping cart abandonment.

3. Visitor to conversion percentage

How?

=number of orders/total number of visitors

What?

Once a customer visits your site it means that your effort to bring traffic to your site has worked out and your job is half done. But the other half of job is getting your visitor purchase from you, which essentially is the bottom line of everything that you are doing. Visitor to conversion percentage gives you the understanding of the benefits that you are able to reap from your current traffic.

Why?

This figure is essentially the measure of benefit that you are able to churn out from the current traffic to your store. The elements on your site like search function, product thumbnail, navigation etc play a significant role in determining whether the visitor would convert or not. For instance: 6 out of 10 customers who visit your online store knows exactly what to buy, so they directly go to the search box and type their requirement. And if the search feature on your store is not credible then you risk losing your customer. The best way to enhance conversion is to take one element at a time and optimize it using A/B testing.

4. Average order value

How?

=Net revenue/total number of orders

What?

Average order value also known as Average Cart Value helps your determine how much revenue you are able to make per order with the current traffic on your site. When combined with conversion rate, AOV can help you estimate your revenue in the future.

Why?

AOV gives you the estimate of how much you are able to make out from a single customer.It helps you project the revenue that you can achieve if you are able your increase conversions. Thus, it is imperative that apart from increasing your site traffic and conversion rate you also focus on your AOV to boost revenue. Upselling, cross-selling, limited offers are some of the tested ways, but you can experiment with more to find out what works out best for you.

5. Bounce rate

How?

= number of single page visits/total number of visits

What?

You can view bounce rate of individual pages in your Google Analytics. This can help you identify individual pages which needs optimization and where you need to build user engagement.

Why?

Just the increase in the number of visitors to your store is not going to help you. You site should engage which will ultimately lead to conversion. Bounce rate is the percentage of visitors who leave your site without visiting any other page than the one they already have.

6. % of repeat customers

How?

=number of customers making more than one purchase/total number of customers

What?

By far, from the above metrics it is clear that some effort and revenue is spared in converting every customer. Thus, it is imperative that you extract the entire juice of your effort by making your customer come again to your store and make a purchase.

Why?

If your % of repeat customers is low that it implies there is a lag in your cutomer service, your product or your marketing. It also means that your marketing cost is going to go high as you are acquiring new set of customers each time. Further, it is easier to make an old customer purchase from your store than to acquire a new customer altogether again.

7. % of returns in COD

How?

=number of returns/total number of COD orders

What?

In the current e-commerce landscape COD has become the necessary evil. If not dealing in niche categories, COD facility is must for your online store. But it is an expensive affair, however when the COD products are returned by consumers, online stores have to bear the double expense of getting the product returned to its origin.

Why?

Fake COD orders is inevitable, as there is no way to find the intention of your customer who is purchasing from you. However, using this figure you can segment the customers according their demography and initiate actions.

These were some of the basic metrics that you should certainly consider for your online store. And if you have been ignoring them or still intend to ignore them, to take decisions driven by your instincts, then you are inadvertently betraying yourself. There would be more and more additions once your store starts scaling. Do share your thoughts and questions in the comments box.


Are you wondering how to maintain an online store and stay on top of all these metrics with limiter resources?
Leave all technical and logistics work to Zepo and just focus on increasing your sales!

 

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Ajit Singh

Ajit Singh

Startup enthusiast, essayer and part time writer who currently lives at Zepo. I am the kid who told the emperor that he is naked. Reach me out at ajit@zepo.in