As an E-Commerce store owner, you should be aware that having large amount of data can be confusing ,and most times it can be misleading. In this resource today, the following are a few metrics we believe to be unique and you must track consistently in order to use your data more efficiently.
Customer Service Engagement
How much your customers interact with you can be either a good/ bad or even both sign depending on the type of communications. If you notice clients tabling many questions about your products, then you must work on improving your product descriptions and giving more transparency through customer reviews. To achieve that, FAQ page is your best plug for answering user questions as well. However, if customers are e-mailing concerning product quality, you must crosscheck whether your supplier’s are being honest with respect to the products they are selling in terms of material, sizing, longevity etc). When customers are interacting with you in a positive manner, then you should know that you’re on the right track.
Furthermore, you could take advantage of this by asking for reviews and referrals which can increase your sales.
Shopping Cart Abandonment Rate
Shopping Cart Abandonment Rate is another special metric to keep track of because it gives great insight into why your products aren’t selling. Most times, shoppers are faced with hidden costs before the end of the process. If you notice a high abandonment rate towards the end of the checkout process and you add shipping and tax only at the final stage, you might be scaring your customers away! Identifying this issue, you can fix this by adding such fees as soon as your user views their cart. Other problems may be that customers are getting better prices elsewhere, your checkout process is too tedious or your delivery options don’t favour them.
Whichever issue it may be, don’t lose hope yet after discovery as there are various strategies you can implore to recover users that have abandoned their carts. One of such strategies is to send out an e-mail after a day or two informing them that they haven’t completed checkout. As case may be, you can further issue a discount code if they complete the order. Just ensure you don’t spam them with the e-mail as you may annoy returning customers who planned to return to the order eventually. In addition, you should minimize the number of pages required to checkout, like Amazon’s One Click Buy.
Again, to ensure that your prices are consistent, you should always learn to keep track of the price of your items.
Average Order Value
Reviewing your average order value is a wonderful way to examine your customers and their spending habits to better source for your store. To calculate your AOV, take the sum of all revenue and divide it through total number of orders over a certain period of time.
Once done and you find a low number compared to what your average price point is on your store, then it shows that your customer is not purchasing multiple items and the lower priced items are more popular. Time to source more products at lower price points.
On the other hand, when you discover a higher value than your average price point, dive deeper to understand if customers are attracted to higher price points or if they are buying multiple items. This is a key difference. The result will enable you align the products with your customer base. The higher the AOV, the more profit you make per customer. Therefore, we recommend monitoring it weekly if doing so daily isn’t attainable.
Customer Lifetime Value
This is the last metric but not the least, and is extremely vital because knowing which kind of customers have the highest lifetime value on your store can enlighten you on the right direction to grow your store. The basic formula for calculating this is (Average Order Value) x (Number of Repeat Sales) x (Average Retention Time).
If you discover that Guys from Nigeria between the age of 18-30 spend $150 per order, make 3 orders per year and stay around for 5 years and they are your highest spending customers, their Lifetime value is $2250! So, you must focus your efforts on catering to that demographic as each customer with those features bring in the largest value to your store over time.
Those are the four (4) special e-commerce metrics every serious online store owner or brand must watchout for, if result must be driven. Go ahead and start monitoring yours from today just as we at Dropazz do!