Standing Out from the rest is the recipe for winning the marketplace these days. Have you given it a thought lately? If not, then it’s because being normal in this ever-changing world will never get you anywhere. The change and trends take you places and are a big reason why trends bring billions in sales for enterprises. Ecommerce is not the hot today and will be forgotten industry tomorrow. And recently, the global pandemic hit has added fuel to the flames and taken it to new heights.
But with each day that passes, we are witnessing a rising number of eCommerce stores worldwide. We do not have to shed much light on the fact that every step for eCommerce stores is crucial because of the increased competition in recent years. That’s why data has become critical to stay ahead in the market from your competitors. You need to constantly check your website for different kinds of data to learn about the customer’s trends and update your online store accordingly. Moreover, this is only a single way to look at it.
In today’s date, every marketing and promotional decision is being driven by the data. It helps you understand what’s working, what’s failing, changes needed to be done and most importantly, figuring out what success looks like for an eCommerce store. The driving growth in your eCommerce store can be determined by monitoring a few key components. Setting KPIs, identifying the metrics required to track those KPIs and most importantly, monitoring performance and making adaptations as necessary. In this post, we are going to talk about one such key factor/metric to consider for measuring eCommerce success. But before, let us find out the importance of tracking your eCommerce store success.
Importance of Tracking your Ecommerce Store Success
When it comes to the eCommerce industry, your success is calculated by quantifiable results. For instance, the investors in the Shark Tank often talk about figures and facts that you might think are not valuable to the conversation. Still, the response from the founders to those queries tells a lot about their business and the idea behind it in the long run. Similarly, in eCommerce, you can learn a lot about the way of operations by monitoring certain aspects of the website. A comprehensive observation from the experts gives you insights and a plethora of opportunities for improvement. Here are the few advantages of tracking your online success.
Influential Outcomes
As you know, a business is nothing without a marketing team, and because of the competition in the industry, you need to tell people about your online store, and a marketing team can help you with it. Moreover, just a little glance at the analytics console can tell you a ton of useful information, like when a landing page is unavailable and at what time you get the maximum surge of new visitors on your site. By gathering all the data and monitoring the outcomes in real-time, you can quickly change your marketing campaign and see positive results within a few days. The power of observed activity means understanding customer behaviour. With this, you get a chance to learn how to serve them better. You also get the early opportunity to identify the issues before they become a complex problem at a later stage.
Strengthen Your Position in the Market
It doesn’t matter what business you are running. No one will be interested in your operations if you have not planned anything for future success. It would be best to have a comprehensive strategy to attract both investors and customers. Get precise with your statistics and data. You get more information about your business and how people react to your eCommerce store. You may find a new line of business in the data or a way of diversifying your current business strategies for better opportunities and increasing your Return on Investment.
A Comprehensive Point of View
When you observe critical metrics of your eCommerce business, you get an idea of what users think of your business. Using this data, you can further update your advertising and marketing performance to look at general performance. For instance, if you are getting a lot of organic search traffic, you have a robust Search Engine Optimization approach.
Key Factors and Metrics to Consider For Measuring E-commerce success
1. Conversion Rate
The conversion rate for an eCommerce store is the most important metric to monitor from time to time, and it is the percentage of the visitors on your website who decide to make a purchase. Now, if 20 out of 150 customers made a purchase, the conversion rate would be (20 divided by 150) 13.3%. Keeping track is and will be inevitable when it comes to tracking the important metrics in the eCommerce business, and it’s because it is a good indicator of success.
As a leading eCommerce store in the market, we suggest you break down your conversion rate in the subparts to get more precise with the data and make changes in the campaigns to grow your business. You may already know how you will break down your conversion rate data, and here are a few ways to segment your conversion rate.
- Conversion of Device Type: 80% of smartphone users have purchased online using their mobile devices. Moreover, in 2021, 73% of all retail eCommerce sales were generated via m-commerce. As the number suggests, the traffic coming from mobile is much higher as compared to desktops. So, having a responsive website that works flawlessly for both desktop and mobile devices will help you outperform the rest of the market. Start collecting the data and monitoring the user experience to determine where improvements can be made.
- Conversion by Traffic Source: Your visitors come from different sources. Having the exact numbers that tell which resource generates the most traffic will help you shift focus and improve your targeting.
- Conversion of New vs Returning Visitors: Another effective way to keep an eye on your conversion rate is to get insights on returning customers vs the new customers’ sales. Getting the idea of returning visitors will allow you to calculate the marketing budget and where to target the most.
Sectioning these conversions can help you calculate what you should be spending on your acquisition campaigns and how well they perform.
2. Percentage of Returning Customers
It’s a little different from the subpart of the above point, and it is a great metric to track for measuring customer loyalty. But understanding the returning revenue tells you whether your business will be successful in the future or not. If your returning customers’ sales are low, you need to figure out ways to spend money on your eCommerce store.
For instance, if you have a detailed report for the first time vs returning customers, you use it to export the total orders to scrub the data further to get more repeat orders by the market to those customers. You will understand several key things like your customer service, price, trust and customer sentiment. Returning customers are the reason for success for almost every billion-dollar business. So, it would be best if you kept trying to find out what keeps customers from coming back.
3. Customized Purchasing Experience
Personalization in sales is the current trend in the market and offers a high rate of success in the industry. This metric shows how much you care about your business and are ready to upgrade your side for customer-friendliness. Since people are not stepping out in the stores, you need to flawlessly explain the items based on their requirements and preferences. A customer will love to shop on your online store with a tailored purchasing route.
Understanding the customer behaviour and utilizing it to create appropriate strategies to customize items for your consumers will make them feel as if you are familiar with them. That’s why it is suggested to have the expertise of e-commerce developers for faster development and accurate personalization.
4. Cost of Customer Acquisition
Cost of Customer Acquisition, also known as CAC, is a term that stands for the company’s sales and marketing costs to acquire a customer until they complete the purchase on your store. If you are new in the business, then the fact that acquiring new consumers is more expensive than maintaining existing ones would be really helpful for you before you create a marketing strategy. It means you need to spend a good amount on several marketing and ads to attract new clients to your online store. So, do not hesitate to put your money on the line.
CAC is calculated by the marketing division and sales by the amount spent on new clients.
Moreover, comparing both customer lifetime value and customer acquisition cost must be compared to each other. If CAC exceeds the CLTV, you may lose money in the long term. Spending less on CAC means your store runs effectively and will increase its earnings with time.
5. Social Media Engagement
We are living in a world where almost everything is online. So, why not leverage social media as a tool and increase the revenue with time. Social Media platforms have become an important marketing channel for businesses, especially the eCommerce industry. These platforms are registering a huge amount of website traffic, and that’s why you need to keep a close eye on this metric.
Yeah, sure, it can be tricky to figure out which sub metric to follow, but that’s what this guide is for. Let us have a look at the metrics that will help you give robust insights into your marketing efforts.
- Social Conversions: If your customer visits your social channel to your website and completes the purchase in the same session, this counts as a social conversion. If this number is high, then your social media channels bring in good leads and convert.
- Referrals: Referral traffic, another important factor, means traffic from another location, which can be social media. With the help of tools like Google Analytics, you can find out which social media channels are contributing and which are not. This allows you to update your marketing strategies for better referrals.
- Click-Through Rate: One of the most important metrics in the whole list is CTC. It is calculated by looking at the data, which tells you whether your followers are taking action in response to your CTAs or not. Your strategy works fine if your CTR is high and your content is effective.
6. Conversion By Product
There are different kinds of eCommerce stores, and some sell almost everything, and others focus only on a handful of products on the online store. If you are the first one, then this is an important metric to pay attention to. You need to track the performance of individual products when you compare respective product conversions against the traffic it is getting. You get to know who has wished-listed the effect and added it in the cart but abandoned it before completing the purchase. Using this metric, you can figure out the barriers impacting the conversions and make strategic adjustments for better sales.
A few years back, ecommerce stores only used to offer a handful of payment options as people used to prefer cash on delivery for their orders. But now, things have changed drastically as we are witnessing the monopoly of digital wallets and UPI payment in the industry. The invention of UPI and digital wallets has opened the gates for eCommerce stores to sell as many products through multiple payment options and make it easier for the customers. Let’s figure out how having multiple data can contribute to your eCommerce success.
- Backup: If one method fails for the customer while making the payment, then using a similar option or other options completes the sales. It has contributed to massive sales overflows for many established eCommerce stores and can work wonders for your business as well.
7. Multiple Payment Options
- Get More Analytical Data: With more payment channels, you get a chance to occupy customer data like which payment is preferred by them. Collecting such information, you gain insight into how to enhance payment processing.
- Helps with Sales Internationally: One of the advantages of having multiple stores is that it enables you to sell your products internationally. Something which is not at all possible in a brick and mortar store. It helps in increasing sales and sets standard new heights for your business.
Endnotes
We have discussed the key factors and metrics to consider for measuring your eCommerce success and their importance in today’s competitive market. As mentioned, ecommerce stores are not going anywhere, and competition is surely going to increase in this trillion-dollar industry. Instead of running away from constant improvement after looking at the data can help you with massive success.