New to eCommerce? Essential analytics for beginners – Part 2

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.

Here’s the second part of the list of analytics metrics that every eCommerce merchant should understand to help grow your online store:

Click-Through Rate (CTR)

Click-through rate (CTR) is an important metric to understand in terms of both paid and organic search. CTR refers to the total number of users who clicked on a specific link divided by the total number of users who viewed your advertisement, email or page listing.

Those who run pay-per-click campaigns are focused on their CTRs because those can tell you how relevant your ad is to your audience, and a low CTR can lead to a higher cost-per-click.

In organic search, low CTRs can also be bad news for your eCommerce site because evidence suggests that it can impact your search ranking on Google. Both organic and paid CTRs need to be watched so that you can avoid overspending and provide relevant results to your visitors.

Customer Retention Rate

Did you know that it can cost five times as much to attract a new customer than to retain an old one? That’s why your customer retention rate is a key metric for you to watch. This metric is the percentage of customers that you retain relative to the number of customers you had at the beginning of your start period.

As many business owners know, loyal customers are profitable customers, which is why we want our customer retention rates high. This metric gives us an idea of how loyal our customers are to our business.

Average Order Value (AOV)

The average order value (AOV) measures the average total of every order placed with your eCommerce store over a set period of time. AOV is a good indicator of your business’s performance and profits. While it might not tell you exactly what the profit is, it does give you a better idea of how profitable your site’s traffic may be.

To calculate this metric, all you need to do is divide your total revenue by the number of orders placed. If you want to increase your AOV, cross-selling and upselling is a common strategy that works. For example, if a customer added sunglasses to their cart, you could recommend a case to go with their purchase.

Traffic Sources

Knowing where your site’s visitors are coming from is useful to eCommerce merchants, which is why many pay attention to traffic sources. For example, we can get a sense for how well a marketing campaign is working based off of which sites visitors are coming from.

In Google Analytics, your traffic sources are classified into four categories: Search Engines, Direct Traffic, Referring Sites, and Other. Understanding this data can help shape your future ad campaigns, social media campaigns and other engagement strategies.

This is not an exhaustive list, but it is a good start for beginner eCommerce merchants who want to dip their feet into eCommerce analytics. The important thing to keep in mind is that analyzing data isn’t something that you do once. Analytics should be used regularly so that you can continue to improve your business and become successful in eCommerce.

Erika Brookes, Chief Marketing Officer,

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