KPIs matter for all brands but are particularly important for eCommerce brands. That being said, there’s no shortage of KPIs that are difficult and time-consuming to track.
Thankfully, we are here to give you the rundown on the eight KPIs that matter to your eCommerce brand.
1. Shopping Cart Abandonment Rate
What Is Shopping Cart Abandonment Rate?
Shopping cart abandonment rate refers to how many customers put items in their carts and leave your site without actually completing the purchase.
Why Shopping Cart Abandonment Rate Matters?
Shopping cart abandonment can cost you sales and can even mess up your inventory if you’re not careful. As a result, it’s important to keep this rate in check.
How to Improve Shopping Cart Abandonment Rate?
Many eCommerce brands struggle with high shopping cart abandonment rates that average around 88%. Customers abandon their carts for various reasons, including unexpected added costs, lengthy delivery timeframes, payment issues, and more.
As a result, you need to minimize costs and shipping times as much as possible without cutting into your bottom line too much. Try to show estimated taxes and shipping fees right away and offer two-day delivery to compete with eCommerce giants like Amazon.
2. Customer Acquisition Cost (CAC)
What Is Customer Acquisition Cost?
Customer acquisition cost or CAC refers to how much you’re spending to acquire a new customer.
Why Customer Acquisition Cost Matters?
It’s well-known that acquiring a new customer can be quite costly compared to retaining an existing one. As a result, you need to minimize this cost while also working on boosting existing customer loyalty.
How to Improve Customer Acquisition Cost?
On average, eCommerce brands spend around $45.27 to acquire a new customer. To improve this cost, you need to work on your targeting mechanisms to ensure that your content reaches people who are likely to buy your products.
You also need to focus on retargeting to take advantage of an established brand awareness.
3. Click-Through-Rate (CTR)
What Is Click-Through-Rate?
Click-through rate or CTR refers to how many viewers click on your link out of the total number of viewers. This KPI can be used within social media marketing, email marketing, SMS marketing, etc.
Why Click-Through-Rate Matters?
CTR is a good indication of how effective your marketing content is. A low CTR indicates that your content isn’t effective and is actually wasting money rather than earning you clicks.
How to Improve Click-Through-Rate?
The average CTR on social media hovers around 1.3%. While this may seem low, there are things you can do to improve it. You can improve your CTR by performing A/B or split testing on your content before launching it.
You can also improve your CTR by performing research on your keywords to make sure that they’re the right fit for your brand. Finally, you can improve your CTR by including a strong call to action (CTA).
4. Average Position
What Is Average Position?
Average position refers to where you’re ranking on search engines based on either paid advertising or organic advertising through search engine optimization (SEO).
Why Average Position Matters?
Your goal should be to have an average position of one on valuable search engines like Google. This is because brands that rank in this spot gain more clicks and earn more customers as a result of their position.
How to Improve Average Position?
Ranking number one on Google won’t happen overnight, but it is possible with the right strategy and effort.
First of all, you need to focus on SEO by creating content with relevant keywords and getting more backlinks to reputable websites. Next, you need to use the right formatting, including header tags and meta descriptions. Finally, you need to improve your site’s speed and fix any broken links.
5. Average Order Value (AOV)
What Is Average Order Value?
Average order value or AOV refers to how much the average customer spends when purchasing from your brand.
Why Average Order Value Matters?
AOV plays a big role in your overall profits and revenue. It also helps you to take advantage of each customer rather than spending money to acquire new ones — which you now know is quite costly.
How to Improve Average Order Value?
To improve your AOV, you can upsell your products or cross-sell complementary products. You could also provide bulk discounts. One particularly effective method is to offer free shipping for orders above a certain value — $25, for example.
6. Conversion Rate
What Is Conversion Rate?
Conversion rate refers to how many visitors to your site are actually converting or buying your products.
Why Conversion Rate Matters?
A low conversion rate indicates that you’re not meeting your customers’ needs with your site, products, or both. It should necessitate meaningful changes to benefit and grow your business.
How to Improve Conversion Rate?
You need to improve the overall flow and design of your site to improve your conversion rate. Do this by removing distractions and unnecessary form fields during checkout.
You should also consider adding a live chat feature to your site to boost customer service. Finally, you can add social proof through testimonials, reviews, and logos to drive conversions.
7. Customer Lifetime Value (CLV)
What Is Customer Lifetime Value?
Customer lifetime value or CLV refers to how much a customer spends at your business over time.
Why Customer Lifetime Value Matters?
CLV also ties into CAC in that you want to maximize the amount that existing customers are going to spend so that you don’t have to spend more money acquiring new customers.
How to Improve Customer Lifetime Value?
To improve your CLV, you first need to offer top-notch customer service. You then need to focus on building relationships through things like loyalty programs, newsletters, etc.
From there, prioritize collecting customer feedback and using it to improve your business. Finally, give your customers what they want in terms of products, services, content, etc.
8. Subscriber Rates
What Is Subscriber Rate?
Subscriber rates track how many people are subscribed to your email lists, SMS lists, and social media profiles.
Why Subscriber Rate Matters?
Subscribers are key to maintaining and hopefully boosting engagement with your brand with an overall goal to convert engagement into actual purchases.
How to Improve Subscriber Rate?
To earn more subscribers, you’re generally going to need to offer some sort of incentive. For instance, a freebie or a sweepstake is a great way to earn more subscribers. You also need to make the sign-up process as easy as possible.
From there, you need to keep your subscribers by providing them with engaging and valuable content. If you’re not sure what they’re looking for — this is a great opportunity to reach out for feedback to see what else you can offer.
Wrap Up on eCommerce KPIs
If you need help tracking and taking action on your eCommerce KPIs, then you need to work with an expert like Greg Gillman. Greg Gillman specializes in omnichannel growth strategies for direct-to-consumer brands, resulting in $4 billion in annual revenue for his clients. Reach out today to see how he can make the same success happen for your brand.
Sources:
Key Performance Indicators (KPIs): 67 KPIs for Ecommerce (+ Examples) | Shopify
How Marketers Can Reduce Customer Acquisition Cost | Forbes
6 Ways to Increase Average Order Value for Your Online Business | Entrepreneur
