It’s easy to get caught up in the hustle and bustle of online shopping, but it’s important to remember that success is often measured by more than just revenue. To help you focus on these metrics, we’ve rounded up some of the most overlooked metrics in eCommerce.
Customer lifetime value (CLTV)
Customer lifetime value (CLTV) is a metric that measures the total revenue generated by an individual customer over their lifetime. It is one of the most overlooked metrics in eCommerce. You can calculate it by multiplying the number of purchases made by each customer with the average order value (AOV).
The CLTV is a key metric for measuring customer lifetime value. It can determine how much to spend on marketing and what channels to invest in.
In e-commerce, it’s important to understand how much it costs to acquire new customers through different marketing channels. This will help you determine if your current marketing strategy generates enough profit or if you need to upgrade your approach. For example, let’s say your target market comprises men aged 25–35 interested in technology products like smartphones or computers. If you have a $10K per month budget for paid ads using Facebook Ads, then this would mean that you should expect an ROI of 3x from each targeted user – meaning every time someone clicks on your ad, they should buy something from you within three months after viewing it (if not sooner).
New vs. returning customers
This metric is important for measuring the success of your marketing campaigns and customer acquisition efforts. You want to know if you have more customers returning or if you’re attracting new ones. This can be measured by looking at the number of returning visitors versus the number of new visitors on your site in a certain time period (monthly, quarterly, etc.).
With this data, you’ll see how each campaign performed compared to previous campaigns. If you notice that one particular campaign has a lower conversion rate than others, it might mean there is something wrong with how it’s being marketed or structured—or maybe even just not enough traffic!
PPC & other marketing campaigns
PPC (pay-per-click) ads are a great way to drive traffic to your site because they allow you to control what appears on search engine results pages. The most important metrics for PPC campaigns are the number of clicks, conversions, and cost per click (CPC). Other important metrics include impressions and CTR — but these depend on whether or not you have a strong brand presence in the marketplace.
Orders per customer
Orders per customer are an essential metric for many reasons. It tells you how many orders your customers make and how frequently they’re doing so.
The average number of orders per customer can vary from industry to industry, but it’s generally around 1-2. If you have a high number of customers but low order volume, one or two shoppers make up the bulk of your sales. They may be buying more expensive items than others in their demographic group (such as high-end electronics). On the other hand, if you have a low amount of orders per customer but a high average order value (AOV), this might indicate that multiple people within each household are shopping on your site at once and spending big money—or maybe even making large purchases via phone or email!
Single mean purchase (AMP)
The average order size is the average amount of money spent by customers. Knowing this number is important because it tells you how much you can afford to spend on marketing and advertising and your margins. But did you know there are two different types of average order sizes?
- Single mean purchase (AMP): This metric shows how much each customer spends on their first purchase.
- Overall mean purchase (OMP): This metric shows how much all customers spend in total across all purchases made with your company over a period of time.
Average medium order size (AMOS)
Average Medium Order Size (AMOS) measures the average order size. This metric can help you determine how much customers spend on each purchase and help you understand customer satisfaction with your business.
- How do I calculate AMOS?
To calculate AMOS, divide the total revenue from all orders by the number of transactions.
- Why is AMOS important?
AMOS tells you how much customers are spending on each order.
If your AMOS is low, that could mean that either:
1) your product prices are too high for your target market.
2) there’s something about your user experience that needs improvement.
For example, maybe shipping costs or delivery times aren’t optimized for what consumers want from an eCommerce site. Conversely, if AMOS is too high, it could negatively impact conversion rates. It should be appropriately addressed through marketing strategies like loyalty programs or Facebook ad targeting.
Time-on-site and bounce rate
Time-on-site and bounce rate are metrics you must pay attention to, especially if you’re a business owner or manager. Both metrics can help you determine your website’s performance, but each has its benefits.
Time-on-site is the average amount of time spent on a page by the people who visit it. The higher this number is, the more engaging your content is—and vice versa! If someone visits your landing page and immediately leaves without clicking anything else, there’s probably something wrong with your copy or design that needs fixing. On the other hand, if someone spends hours browsing through product pages before making any purchases (and then makes some), it means that they find what they’re looking for and want more information before making a purchase decision.
Bounce rate tells us how much of our traffic doesn’t engage with our site beyond their first visit. That is, how many people leave after visiting only one page on our site versus staying longer than five minutes (the standard measure used by Google Analytics). We generally want as few bounces as possible because they indicate that most visitors aren’t finding what they came here looking for. Conversely, having very few “bounces” could mean there aren’t enough sales, which would be bad news too! So while it’s important not to get too caught up in these numbers alone, remember that there are always exceptions. Some sites might have high bounce rates because their target audience simply doesn’t stay on websites long enough. Others might keep users engaged throughout their entire visit despite having relatively low values here overall — so don’t panic just yet 😉
Click through rate of the ad to purchase made
The Click-through rate is calculated by dividing the number of clicks made on an ad by the total number of impressions (or displays) for your campaign. A good click-through rate can be anywhere from 1% to 20%; anything above that is usually considered excellent, and anything below it is generally considered poor.
A high click-through rate is generally one of the overlooked metrics in eCommerce. That is a shame since it is a good indicator that users are interested in your product or service, which means you’re likely getting valuable exposure for your business. However, it’s important to note that not all clicks should be treated equally. For example, if someone sees an ad but doesn’t click on it but later comes back and purchases your product after researching them online using another search engine like Google or Bing, they would also count as a conversion even though they didn’t originally click through!
Product page conversion rate
Product page conversion rate is the percentage of visitors that added a product to their cart. This is one of the overlooked metrics in eCommerce. It shows how effectively your product pages sell items and get customers to complete the checkout process.
How do you calculate your product page conversion rate? Use an open-source plugin on Google Sheets. This method uses data from Google Analytics and automatically calculates your product page conversion rate for all products in one column. You can then compare performance across different pages by exporting the data and sorting it by product category or SKU. This approach provides actionable insights into what’s working well with each page’s content type. However, it doesn’t give much context about why certain aspects may drive up sales more than others.
It’s not always about revenue or the number of orders
Analyzing your data can be complicated, but looking at the data from different angles is worth it. Look at the data over different periods and see trends in how customers interact with your website or brand. If you’re trying a new marketing campaign, check how those efforts affected customer behavior.
Conclusion
All these overlooked metrics in eCommerce aim to understand your customers and what they like. Using this information, you can create a better product that will be more likely to sell and provide a better experience for customers who have already purchased from your store. If you want more sales or conversions on your site, it’s important to start with these basic metrics before moving on to anything else!
