If you’re running an e-commerce business, you need to measure some key performance indicators (KPIs) to track and optimize your performance. KPIs are numerical values that measure the success of a business, and they can help you make strategic decisions, identify areas of improvement, and measure the overall success of your business.
There are a variety of different KPIs that you can measure for your e-commerce business. Here are the top five that you should consider:
1. Conversion Rate: The conversion rate is the percentage of visitors who take a desired action after visiting your site. This could be anything from making a purchase to signing up for a newsletter or downloading an ebook. You can measure this KPI by dividing the number of conversions by the total number of visitors.
2. Average Order Value (AOV): This is the average amount of money customers spend when they purchase from your e-commerce store. It’s important to track this KPI because it can help you understand the average transaction size of your customers.
3. Shopping Cart Abandonment Rate: Shopping cart abandonment is when customers add items to their cart but don’t complete the purchase. Measuring this KPI will help you identify potential problems in your checkout process and take the necessary steps to reduce your abandonment rate.
4. Return Rate: The return rate is the percentage of orders that are returned by customers. This is an important KPI to track because it can give you insights into customer satisfaction.
5. Customer Lifetime Value (CLV): This is the average amount of money that each customer spends over their lifetime. Tracking this KPI will help you understand the value of your current customers and how much money you can make from them in the future.
6. Customer Retention Rate: Your customer retention rate is the measure of how many customers continue to purchase from you over time. It’s a great metric to track as it’s an indicator of customer loyalty and helps you understand how to attract and retain more customers.
7. Return on Ad Spend: Your return on ad spend (ROAS) measures how much revenue you’re generating for every dollar you spend on advertising. It’s an important metric to track as it helps you understand which campaigns are working and which ones are not.
By tracking these five KPIs, you can get a better understanding of how your e-commerce business is performing and make more informed decisions about how to improve it. However, you should also consider tracking other metrics such as website traffic, bounce rate, time on site, and more. It all depends on what type of data you need to make strategic decisions.
If you’re serious about improving your e-commerce business, then it’s important to track and measure these KPIs regularly. Doing so will allow you to identify areas that need improvement and make changes to increase your sales and profitability.