If you own an ecommerce store, you understand the value of metrics in assisting you to grow your business. However, you’re just as likely to be confused about which numbers to track (and why). Kasey Luck, the founder and CEO of Luck & Co Agency, has agreed to share her expertise. Kasey and her team have helped 8-figure brands increase their revenue up to threefold by focusing on the metrics listed below, so you’re in good hands! After reading this, you’ll be ready to start tracking and optimizing your metrics right away.
The 8 Most Important Ecommerce Metrics
First and foremost, consider store revenue. This is the number you want to know, grow, and then grow some more. All of the metrics that come after it support that one goal. Revenue is the sum of visitors to your website [site traffic], visitors who become buyers [conversion rate], and the average amount spent by each customer [average order value, or AOV].
We’ll begin with those three items because they comprise your most important metric.
1. Conversion Rate of a Website
Conversion rate has an exponential impact on overall revenue – a 1% increase in conversion rate may result in a 50% increase in revenue – and simple actions that improve site functionality will help boost this number.
The site conversion rate simply indicates how successful your website is at converting visitors into paying customers. Look for this number in your shopping platform’s analytics section, or calculate it using the following formula:
SITE CONVERSION RATE = Total Visitors / Number of Conversions
- Aim for a site conversion rate of more than 2.8 percent, which is the national average for ecommerce stores in the United States. Here are a few quick and easy ways to increase your site’s conversion rate:
- Improve your site speed by using an app or checking to see if your shopping platform has a built-in tool to do so. Additionally, use smaller image files and above-the-fold simplicity for a quick loading landing page that allows your customer to navigate your site without pause upon arrival.
- Organize your site pages so that the most important information is at the top. This will ensure that you capture your customers’ limited attention with the most important information that is most likely to drive conversion.
- Make it easy for your customers to navigate your site, browse products, add items to their cart, and check out. Reducing the number of steps (and friction) to checkout shortens the decision-making process and decreases the likelihood of second-guessing or cart abandonment.
- Determine your product-market fit: Simply put, ensure that the product you are selling is required by your target customer. It will be easier to attract the RIGHT people to your site if you are clear on who you are serving and what problem you are solving.
This leads us to the next point…
Even if your conversion rate is at an all-time high, it will only get you so far if your site traffic (the number of visitors to your site) is stagnant. As a result, site traffic is an important metric to track on a weekly, if not daily, basis. Getting targeted customers to your website is a critical building block for your company. A smart paid ad strategy can help you get in front of your ideal customer, but it isn’t your only option!
Here are some ideas for increasing site traffic:
- Consider collaborating with influencers who have a large following in your target market.
- Seek out PR placements, particularly for events or seasons that are relevant to your product.
- Optimize your website for search engines (SEO) in order to drive organic traffic to your website and content.
- Make yourself a resource for your customers by creating content that establishes you as an expert and thought leader in your industry.
- Create opt-in forms and lead magnets to expand your email and SMS list, allowing your retargeting campaigns to drive more traffic to your website.
The key to all of these strategies is to target and attract the RIGHT audience, i.e. those who require or desire your product. When you direct a potential customer to your website, they will convert. So, take the time to increase your site traffic with targeted strategies that reach your target audience.