If you’re growing your e-commerce business, you’ve probably noticed that there’s a lot of data you’re expected to track.
Managing numbers can take a lot of time and effort. Read on for a list of e-commerce metrics that are crucial to how you run your business. If you keep your eye on them, you’ll never have to worry about not being data-driven.
12 E-Commerce Metrics You Should Keep an Eye On
By closely monitoring these e-commerce metrics, you’ll always be in tune with the pulse of your business. That’s a great way to keep your business around for the long term.
1. Customer Retention Rate
Customer retention rate (CRR) measures how many customers are retained monthly. It costs more to gain new customers than to keep old ones, so having customers purchasing month after month is worth it.
One retention rate you can track is customer retention by cohort. Different customer cohorts may have different retention rates. A company making grilling tools will probably see more retention among cohorts that buy grills compared to cohorts that buy gift cards. Dads are more likely to buy regularly compared to kids who get them Father’s Day presents.
Identifying which cohorts have a better CRR gives insight into product stickiness and marketing strategy effectiveness.
2. Month Over Month Retention
By tracking month over month retention, you can determine how effectively you’re targeting current clients.
If your business is a subscription service, the month over month retention is the percentage of unique active users from the previous month who subscribed again the next month. If your business is transactional, it’s the percentage of unique active users of the previous 30 days who purchased again in the following 30 days.
Either way, high levels of this metric is a sign that your business is doing well.
3. Customer Acquisition Cost
Your customer acquisition cost (CAC) is how much you spend in marketing to gain one new customer. The more it costs, the less profit you make. By tracking your CAC, you can more accurately value current customers.
If your CAC is low, you can enter a period of high growth and expand your business. This could be exciting!
4. Marketing Spend
To find your CAC, you need to know your total marketing spend — or how much you’ve invested in marketing across the board.
It can be difficult to keep track of your exact marketing spend without the right tools. Most marketing plans involve multiple methods of reaching your customers. Once you know your total marketing spend, you can focus on what wins you customers instead of less effective methods.
5. Average Lifetime Revenue
Average lifetime revenue shows you how much an average customer will spend at your business in total. As your CRR goes up, so will your average lifetime revenue.
Knowing your average lifetime revenue can help you properly value the process of finding and retaining customers. If bringing in ten new customers wins you two superfans with a high lifetime revenue, it might be worth spending more to target new customers.
6. Growth Rate
Your growth rate is how many new customers you gain in a certain period. Tracking this metric can help you plan ahead and assess how your business is doing as a whole.
High growth rates are a sign that your business is expanding! If that’s the case, it may be worth investing in your infrastructure. Low growth rates may be a sign that your business is mature, especially if you have a large pool of loyal customers.
7. Repurchase Rate by Cohort
If a customer likes your product, then they’ll probably buy it again. Simple, right?
Repurchase rate by cohort helps you figure out which customers really like your product. You can spend more on marketing to their demographic. Finding out which cohorts buy a product frequently can also help identify weak spots. If a product doesn’t have a high repurchase rate, investigate see what’s not working.
8. Average Order Value
Tracking your average order value (AOV) can help you identify ways to increase your profit margin.
AOV is the average amount people spend on one order from your company. When people order more products at once, you save on shipping, packaging, and other transactional costs. The higher your AOV, the better your business’s balance sheet looks.
9. New Transactional Sales
Tracking new transactional sales can help you identify which methods of marketing and sales are most effective.
Every new sale you close is important. Spotting which sales approach works best by counting new sales from each method you’re using can lead to increased revenue over time. It lets you focus on the sources that are winning you new fans instead of the ones that just waste time and money.
10. Time Between Purchases
The time between purchases helps determine how long it takes people to use up your product. In general, you want a short period between purchases made by each customer. Longer periods may imply that customers are getting a similar product somewhere else. They also make it easier for customers to forget you.
On the other hand, when your customers buy from you regularly, they are probably loyal fans of your company.
11. Purchase Frequency
Purchase frequency tells you how often your customers want something from your business.
A customer may buy grilling equipment frequently during the summer, but have a long time between purchases in the winter. Spotting patterns like this can shape your company’s production processes to meet customers’ needs. It also gives you the chance to be creative and find ways to boost purchase frequency even out of season.
12. Pacing Sales
Monitoring the pacing of campaigns means you track metrics at intervals instead of waiting until the end to assess their performance. It’s a great way to stay involved with your campaign instead of holding your breath until the end.
Pacing is about more than scheduling — it’s not successful just because things happen on time. Without pace monitoring, it would be difficult to diagnose where a campaign went wrong. If you’re tracking pacing, you can fix problems while a campaign is still running.
Keep It Simple With Automation
There are many e-commerce metrics you can track to keep your business growing. By using the right software, you can monitor all these metrics and more!
What if you could use easy-to-use software to make your marketing analysis on Shopify effortless and more insightful? You don’t need to keep an eye on and analyze important numbers on your own. Use the right tools for the job with Peel.