Knowing what these performance indicators are is important, because it will then allow you to make changes to your shop and marketing to improve each metric. So now let’s jump straight in, as to what the top six KPIs are (in our opinion). They are the following:
We'll now go through each of these in detail.
This is the most basic and fundamental KPI that you should be tracking from day one to determine your shop’s growth progress. The Store Conversion Rate for a given period is calculated as follows:
What are the main factors that impact Store Conversion Rate?
An online shop's conversion rate begins before somebody even visits your shop! Two initial factors that must be mentioned are:
Next are the onsite factors that include:
This is one of the most important ecommerce metrics. This is because it instantly tells the shop owner the average amount of money each shop visitor who places an order spends. AOV is calculated as follows:
The fundamental factors that affect AOV are the number and quantity of products in each order and the average cost of each product.
Primary factors that affect AOV
As previously mentioned in the section on Store Conversion Rate, factors that are inextricably linked to AOV are:
Assuming that your online shop is performing well in the factors just mentioned, how can AOV be further increased?
Suggested Strategies For Increasing AOV
And a final strategy to increase AOV is to test out different website copy and website images.
A shop's cart abandonment rate is a measure of how many visitors add an item or items to their cart or basket and then do not proceed any further in the checkout process.
What are the main causes of shopping cart abandonment?
A poor user experience is a primary reason in why people abandon their orders at this early stage, especially if they are using a mobile or tablet device. Also if an estimated shopping cost is not displayed at this stage, it may cause people to abandon their orders.
Ways to reduce cart abandonment include sending customers cart reminder emails asking if they require any assistance with their order provided you already know their email address.
It is also worth mentioning that shopping carts may not have been abandoned for any of the reasons previously mentioned. It's common for employees to browse shopping sites on their lunch breaks and to add desired items to their cart. Then not to commit to their orders when they go back to work. So it may be for a reason as harmless as that. Assuming that it is for a reason as simple as that, how can you get potential customers to come back and complete their orders?
This is when a shop user has gone beyond the cart or basket page, most likely have completed their billing/shipping details then haven't paid. The user may have abandoned their order for one of the following reasons:
Happy and satisfied customers are the main key component to running an online shop so it cannot be understated how important it is to get this metric as high as possible. Repeat customer rate is simply how many customers have come back to your site and have placed more than one order.
Customer retention can be calculated as follows:
How can customer retention be increased?
Listed below are some methods and strategies to incentivise customers to stay loyal to your brand:
Visitors are the lifeblood of your online shop. However not just any visitors will do. Whatever niche category or categories of products your shop sells, it is important that the people who are actively seeking what you sell can find you.
In the early days of online commerce and even up to today, the average sale comes from 1 in every 100 unique visitors. So with a visits to sales ratio that low, it is important that your online gets most things and not to turn off any potential buyers with poor usability etc.
What are the best marketing strategies to drive more traffic to my site?
Next we will briefly discuss the best sources of traffic to drive traffic to your site. Google is number one as potential customers are actively searching for what you sell. Even though Google is currently number one in the search market, rival search engine Bing and web directory Yahoo should not be overlooked as potential sources of traffic. Finally Facebook should not be overlooked as a supplier of targeted traffic to your site.
