Sales are the main source of your business’s revenue, and knowing what e-commerce sales metrics to track and how to use those numbers to improve your website’s performance is critical. These metrics will help you understand your customer’s actions and provide real-time data on what works and needs improvement. Moreover, sales metrics can help you detect patterns and trends in your business and enable you to track your customer’s activity. This will allow you to get insights into optimizing their shopping experience on your site.
Additionally, sales metrics can help you track your marketing campaigns’ performance, providing insights on what’s working and where to invest more marketing spend in the future. In terms of your financial landscape, these metrics can showcase how prices impact purchasing and help you determine the right price points for your business. Furthermore, sales metrics play a role in forecasting and inventory planning, another critical aspect of your business.
You can track many metrics, but sometimes it can confuse which ones are right for your business. To get an overview of what metrics you should track that reflect your sales performance, check out the following list:
Cost per acquisition (CPA) measures the total cost of getting one single customer down your sales funnel. In other words, CPA measures how much time and money you spend to gain a new customer. This financial metric helps you directly measure the revenue impact of your marketing campaigns and project your return on investment (ROI).
The conversion rate represents the percentage of visitors that complete a desired action on your website, such as creating an account, signing up for a newsletter, making an inquiry, or purchasing something. On average, a good conversion rate is somewhere between 2% and 5%. Regularly tracking your website’s conversion rate can help you discover the source of your revenue and the performance of your efforts.
The cart abandonment rate measures the number of users who add items to their cart but do not complete the transaction. Based on data collected from 41 different studies, the average cart abandonment rate is 69.57%. That means around 7 out of 10 customers won’t complete their transaction, representing a high number and is perceived as quite troubling by e-Commerce businesses.
There are several reasons why shoppers abandon their cart, but if you work on improving your site and optimizing these issues, you can avoid such a high cart abandonment percentage. Here are the top reasons why customers don’t finish their transactions:
Finding out the pain points of your website and addressing all the identified concerns will reduce cart abandonment and improve your conversion rate.
The checkout abandonment rate represents the number of users who begin the checkout process and then leave their purchase, without completing the transaction. It’s very similar to the cart abandonment rate but you’ll want to measure both to check where the issues occur, whether they’re during the checkout or before. This way, you’ll be able to proactively address the real issues at hand.
The average order value (AOV) represents the average dollar amount spent each time a customer places an order on your website. AOV is a crucial sales indicator to monitor because it assesses how well you leverage each opportunity to cross-sell and up-sell to your current consumers. If your AOV is higher, you can generate more money from the same number of consumers without spending more on sales and marketing.
The return on advertising spend (ROAS) measures the amount of revenue earned for every dollar spent on advertising. For example, if you spend $500 on a digital ad campaign in a month and generate revenue of $5,000 in that same month, then the ROAS, in this case, will be $10. This means that for every dollar you invest in your ad campaign, you generate $10 worth of revenue.
Tracking this sales metric can help you evaluate your campaign’s performance and provide you with data on what needs future improvement.
The customer lifetime value (CLV) represents the total amount of money a consumer is expected to spend with your business during the lifetime of an average business relationship. Tracking the CVL can help you make well-informed business decisions as it lets you determine, among other things:
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