Important metrics to evaluate the effectiveness of an online shop
Important metrics to evaluate the effectiveness of an online shop
Today on the Selpway Trading blog we're going to talk about seven metrics that everyone working in e-commerce should be tracking. These are essential for you to understand how your business is performing. It's often the case that entrepreneurs, especially start-ups, don't keep track of their shop stats. They build a marketing strategy based on subjective feelings. This is wrong. Numbers give you a clear understanding of how things are going in your business, what you are doing right and what you should stop doing.
The amount of traffic on the site
This indicator is followed by many people. To study the statistics, it is enough to know how to use Google Analytics. It is necessary to evaluate not only the total volume of traffic, but also to differentiate it by source: search, social networks, aggregators, etc. This is useful and important information. It allows you to understand where visitors are coming from. The data obtained should be used when allocating the advertising budget. Also pay attention to the entry points, i.e. the pages of your site that attract the most traffic.
Conversion rate to orders
This metric shows what proportion of visitors to your online shop make a purchase. This indicator varies depending on the product niche. It is advisable to evaluate the conversion rate by traffic source.
In addition, the number of orders should be segmented by the channels of order receipt:
To calculate the conversion rate (CR), divide the number of purchases by the number of visitors and then multiply by 100 to obtain the percentages.
This indicator is followed by many people. To study the statistics, it is enough to know how to use Google Analytics. It is necessary to evaluate not only the total volume of traffic, but also to differentiate it by source: search, social networks, aggregators, etc. This is useful and important information. It allows you to understand where visitors are coming from. The data obtained should be used when allocating the advertising budget. Also pay attention to the entry points, i.e. the pages of your site that attract the most traffic.
Conversion rate to orders
This metric shows what proportion of visitors to your online shop make a purchase. This indicator varies depending on the product niche. It is advisable to evaluate the conversion rate by traffic source.
In addition, the number of orders should be segmented by the channels of order receipt:
- By telephone,
- via the website
- via messenger, etc.
To calculate the conversion rate (CR), divide the number of purchases by the number of visitors and then multiply by 100 to obtain the percentages.
Number of abandoned shopping baskets
Many online shoppers add an item to their basket but do not proceed to checkout. For whatever reason, they stop at the last step. They may be using the shopping basket instead of the 'favourites' folder, which is not on your site. They may not have wanted to place an order because there are so many fields to fill in. They may also have been put off by the terms of delivery or the lack of information about the possibility of returning the product. It is necessary to study the reasons for abandoned baskets, draw conclusions and take measures to increase the volume of completed sales.
Many online shoppers add an item to their basket but do not proceed to checkout. For whatever reason, they stop at the last step. They may be using the shopping basket instead of the 'favourites' folder, which is not on your site. They may not have wanted to place an order because there are so many fields to fill in. They may also have been put off by the terms of delivery or the lack of information about the possibility of returning the product. It is necessary to study the reasons for abandoned baskets, draw conclusions and take measures to increase the volume of completed sales.
Cancellations, refusals, returns
These metrics are also very important to calculate because not all orders end up as sales. Some orders may be cancelled through no fault of your own: for example, because there is an insufficient quantity of goods or the supplier unexpectedly increases the price. The customer may not like the goods received and return them. Or they may simply cancel their order before it has been shipped. The reasons may be different:
- The customer found the goods cheaper;
- changed plans;
- ran out of money, etc.
The share of repeat customers
Regular customers make up a significant part of an online shop's revenue. It is therefore important to work with your customer base. Remember, it is much more expensive to acquire a new customer than it is to persuade someone who has already bought from you to buy again.
These metrics are also very important to calculate because not all orders end up as sales. Some orders may be cancelled through no fault of your own: for example, because there is an insufficient quantity of goods or the supplier unexpectedly increases the price. The customer may not like the goods received and return them. Or they may simply cancel their order before it has been shipped. The reasons may be different:
- The customer found the goods cheaper;
- changed plans;
- ran out of money, etc.
The share of repeat customers
Regular customers make up a significant part of an online shop's revenue. It is therefore important to work with your customer base. Remember, it is much more expensive to acquire a new customer than it is to persuade someone who has already bought from you to buy again.
Average cheque
This indicator can be tracked both for total sales and separately by category or product group. "The average cheque or average cost per order is calculated as the ratio of the sum of all orders in monetary units to the total number of orders. With this data, you can better manage prices when preparing quotations and develop strategies to increase profits.
Customer cost
This metric allows you to understand how much money you need to spend to get an order. The calculation takes into account the budget allocated to the advertising campaign, as well as the salaries of the people who run it, payment for the programmes and services involved, technical and other expenses. This indicator helps to allocate the budget competently and to develop a marketing strategy.
Of course, these are not all the metrics that can be used to assess the performance of online shops. We have listed the most important ones that should be constantly monitored. By doing so, you will be able to understand the performance of your business, develop an informed marketing strategy and work to increase the profitability of your e-commerce site.
This indicator can be tracked both for total sales and separately by category or product group. "The average cheque or average cost per order is calculated as the ratio of the sum of all orders in monetary units to the total number of orders. With this data, you can better manage prices when preparing quotations and develop strategies to increase profits.
Customer cost
This metric allows you to understand how much money you need to spend to get an order. The calculation takes into account the budget allocated to the advertising campaign, as well as the salaries of the people who run it, payment for the programmes and services involved, technical and other expenses. This indicator helps to allocate the budget competently and to develop a marketing strategy.
Of course, these are not all the metrics that can be used to assess the performance of online shops. We have listed the most important ones that should be constantly monitored. By doing so, you will be able to understand the performance of your business, develop an informed marketing strategy and work to increase the profitability of your e-commerce site.