With users becoming more and more comfortable with going online and purchasing products from ecommerce websites and the increase in competition online it becomes even more important to measure and monitor our website performance. It helps us identify the opportunities for improvement on the site, personalize the shopping experience of customers and understand them better.
In this article we will take a look at some of the top KPIs (Keyword Performance Indicators) which are essential to be measured on ecommerce sites to keep our strategies on track and help us define and measure progress towards our goals.
1- Shopping Cart Abandonment Rate
Shopping cart abandonment rate can be defined as the number of visits that did not complete the shopping cart process and can be measured as a percentage of the total visits.
I have added this KPI as the first thing to measure because this is the time when a customer has one of his/her hands in their pockets trying to pull out their wallet to pay you, or has already entered his/her details, but leaves the site without ordering. According to the Baymard Institute , 60% of all e-commerce visitors abandon their shopping cart.
Measuring and working on this figure can bring a big difference to your sales and decrease the abandonment rate.
2 – Average Order Value (AOV)
The Average order value metric helps us know the value of an average order customers are ordering on our sites within a period of time. The basic calculation for AOV is:
Average Order Value (AOV) = Revenue/No.of orders.
It is one of the high level metrics that needs to be measured in order to determine the revenue expected from certain number of visits.
3 – Products per order
A product per order metric shows us the no.of products ordered in a single transaction.
By measuring this metric it helps us understand how well an ecommerce shop is selling related products to what customers are buying.
4 – New to Returning Visitors
New to Returning Visitors metric shows us how often new visitors are visiting a website as compared to those who return periodically. It can be calculated by dividing the no.of new visitors by all unique visitors.
It could be helpful to find out how effective your communication is with your existing or potential customer which is keeping him/her loyal and bringing him/her back to your site and how well you are doing with your new campaigns which is attracting more new visits to your site.
5- Days and Visits to Purchase
Days and Visits to Purchase metric helps us understand our customers behaviour online , how long do they take to purchase something from our ecommerce shop and how many visits does it take for them to take the decision to buy a product.
6 – Product Performance
Product performance metric is used to measure which products are selling well and which needs to be reassessed.
For ecommerce websites its crucial to understand which of their products are selling less or not selling at all, as product performance measurement helps in taking the decision to promote those products which are not selling by adjusting the advertising accordingly, control stock more effectively or discontinue the products in the future.
7 – Conversion Rate
One of the most important metrics for any website. The conversion rate of a site can be found out by taking the number of people who buy a product from the site and dividing by the number of people who visits the site.
It helps in tracking the performance of the whole website and determines if the advertising is becoming less effective over time in encouraging visitors to the site to become customers.
8 – Average per visit value
Every visit to a site has some value, even if the visitor does not purchase any product from the site. Per visit value can be obtained based on the transaction data.
This KPI helps us understand how efficient we are with the up-selling or cross-selling techniques that we use on our website.
9 – Cost Per Transaction
The cost per transaction metric helps you understand how much you are spending on campaigns, such as display advertising, email marketing, video marketing, Adwords etc. in order to generate one transaction.
Taking all the promotions and its running costs into account it gives us a good idea of how cost effective your business is to run.
What KPIs do you measure every month for your ecommerce website? Please tell us in the comments section below.