From small online stores to big eCommerce giants, there is no business on the web today that could not be improved with the help of analytics. Without this data, we marketers are lost when it comes to what our eCommerce stores are doing right and what needs fine-tuning.
Unfortunately, just mentioning the word “analytics” to new eCommerce merchants can fill them with a feeling of dread. It shouldn’t, considering that this data can ease many of your eCommerce woes rather than cause you a massive headache.
Even if you decide to hire someone to analyze your eCommerce data or use a marketing automation platform to generate reports, there are some essential metrics that all beginning online merchants should have a good grasp of. With this knowledge, you can make better business decisions that will improve your marketing efforts and increase your revenue.
So, without further ado, here are the analytics metrics that every eCommerce merchant should know and how this data can help you grow your online store:
Bounce rate is the percentage of users who leave after viewing just a single page on your site. High bounce rates are generally thought of in a negative light because they usually indicate that users are not finding your landing pages relevant, although it could simply be caused by users who found what they wanted immediately and then left your page.
So, why is bounce rate important for eCommerce? While high bounce rates may not be a big deal for informational sites, they are a cause for concern for eCommerce sites. You want users to stay on your site, browse products, and, ultimately, make a purchase.
The conversion rate is the percentage of visitors to your website that take a desired action (i.e., make a purchase or sign up for your email newsletter). This metric matters to online merchants because the entire goal is to turn your visitors into customers that make your business money.
If your conversion rates are low, it probably means that your visitors aren’t finding value in what you’re offering. Furthermore, it means that you are throwing away your marketing budget on failed conversions and losing out on potential sales. That is why many eCommerce sites track their conversions in Google Analytics to boost their conversion rates.
Customer lifetime value (CLV)
If there was a way to estimate how profitable a single customer would be to your business, wouldn’t you like to know? Of course, you would! Customer Lifetime Value (CLV) is easy to calculate and can predict how much value you will get from a customer over the course of their relationship with your business.
If you’re interested in improving your ROI, you will be interested in this metric. It can tell you valuable information, such as how much they will spend, what inspires their loyalty, and which customers have the highest lifetime value. This knowledge can help you pinpoint your most profitable customers and figure out ways to keep them loyal to your brand.
Stay tuned next week for the second part of this list, which will cover click rates, customer retention rates and average order values, and how they can add more insights to your analytics.