How to Measure Success of an E-commerce Business?
E-commerce Businesses
There are an increasing number of e-commerce businesses today with numerous products and services online. With the rise in number there is also a rise in competition. In order to stay ahead of the competition, data is important. Initially you will focus on building your website in order to launch your business. After the launch, you need to start focusing on analyzing your e-commerce metrics.
Keeping a track of these key metrics will help your business thrive. With the help of these metrics you can analyze the performance of your business. Measuring the right metrics can help you make informed decisions. It can enable you to see which areas need work and optimization.
Here are some key e-commerce metrics that will help you measure the success of your business.
Essential Metrics to Measure the Success of Your Ecommerce
Traffic by Device
An e-commerce store can receive traffic from different devices, but customer behavior on each of them is different. The conversion rate, the number of purchases, and the bounce rate, among other elements, will not be the same.
It’s very important to know how e-commerce traffic is distributed in your digital business so that you can make a comparison and understand which ones are generating the greatest response and which ones you need to improve.
Bounce Rate
The bounce rate refers to the number of people who visit your digital website and leave it without any interaction. This metric measures two user actions: the number of pages visited within a website and the time spent on them.
It’s commonly believed that when a person spends more than 30 seconds on a website, they are no longer part of the bounce rate, but this is not the case. It doesn’t matter if the user spends 10 minutes reading about a product or service; if they don’t visit another page, they will then become part of the bounce rate.
Email List Subscriptions
For an ecommerce business, the database is one of the most important elements because it will allow you to build customer loyalty. Getting subscribers to your email list is one of the best ways to increase your database. If it grows, you can increase your turnover thanks to a correct loyalty and nurturing strategy. Knowing the evolution of database growth is a good way to know if you are going in the right direction.
Email Open Rate
Email open rate is a metric that lets you know how reactive your database is. Many e-commerce companies think that the more emails they send, the better results they will receive, but this is not the case. The key is to send emails at the right time and with valuable content that users find interesting. The secret is to write a good subject line that is aligned with the objective of the email. It’s a good idea to carry out recurring A/B tests to improve this metric.
Return on Advertising Spend (ROAS)
It’s interesting to know this metric for each of the sales channels that your e-commerce has, like Facebook Ads, Google, Bing, etc… Once you get the result you can compare users in the same level of the sales funnel to know which marketing platform is yielding the best results.
Conversion Rate to Sale
This rate indicates the number of visitors to your ecommerce that ended up making a purchase. It greatly influences your revenue, so the higher the better. This metric is the one you should pay the most attention to.
Average Order Value
This metric indicates the average amount of money a customer spends on a transaction in your store. It’s very significant because e-commerce stores (like any form of business) have traffic acquisition costs, which will be influenced by the average order value. Therefore, if your marketing business manages to generate a high average order value, it means that the revenue is also high and that your business has a greater margin to continue investing in growth.
Bundling products, setting a minimum order, and recommending additional products are strategies that can be used to increase this metric.