In e-commerce, the most important business insights can come from analyzing the customer metrics that measure a business’ performance. If you take the time to collect, organize, and study this data, you can make smarter business decisions that lower costs and increase profits.
Any online business will rely on multiple platforms in their tech stack, starting with either a CMS or ERP system for their e-store, and adding on multiple other apps to extend productivity. Each of these most likely comes with their own back-end data analytics showing certain customer metrics. And of course, most of your foundational numbers will come from the comprehensive data stored in Google Analytics. For this article, we’ll focus only on customer metrics in particular.
You can develop your own rubric or spreadsheet to track the data you extract from various sources, tracking movements in each area over time. Once you’re focused on these customer metrics, you will begin to discern where there’s room for improvement, and make changes. Often, even small changes can make a big difference. In some cases, you can even identify potential influencers to help boost your brand’s visibility to new customers.
Below are the most important customer metrics to watch:
Repeat Purchase Rate
The repeat purchase rate (RPR) is one of the most important metrics you can track. A good customer retention rate typically accounts for 40% of a brand’s revenue. It also reduces customer acquisition costs, because it costs a lot more to attract new customers than to lure existing customers to purchase again.
Some good customer retention strategies might include rewards programs, educational content, and email campaigns talking about new uses for your products.
Bounce rates and time on page
The more time a shopper spends on your site, the more likely they are to convert. The bounce rate (meaning they stayed only 1-2 seconds, indicating non-interest in the page) and the average time non-bouncing users actually spend on the page, are two metrics that indicate customer engagement. If those numbers aren’t in your favor, look for ways to increase time spent on page with more attractive features and graphics, videos, or social tools. If product pages are having high bounce rates, you might tweak the copy on the product details, increase the number of images you include, or add customer reviews and social proof.
Traffic Referral Sources
With respect to traffic referral sources , you segment different channels, pages, and touchpoints based on their bottom-line value. Where is your site traffic coming from, if the user was on another website before clicking over to you? Which PPC placements seem to generate the most clicks? How much traffic is coming from organic search, social media sources, or from links you have placed on other pages? Link these to conversion goals, and you can discern which are your highest-value referral sources not just in terms of volume but also how motivated the users coming from those places are to make a purchase.
Average Order Value
You can monitor the average cart value from different acquisition channels and geo-locations. You can also determine which products usually drive up the order value, such as those needing regular maintenance and accessories, or ones that come in bigger/bundled packs.
Customer Lifetime Value
Your e-commerce platform should come with analytics data on total spend by customer. Filter your customer list by how much they’ve spent over time since their first purchase, and you can discover some interesting common attributes. Perhaps it’s their location, age or gender, or a common interest. Whatever attributes surface about the customers with the highest CLV, use those as markers to focus your advertising and marketing campaigns. If you find certain customers who buy a LOT of your product, you could give them the VIP treatment and offer them bonuses for referring you new business, with their own special tracking links. They might become evangelical influencers on your behalf.
Cart Abandonment Rate
The average e-commerce site sees 68% of people abandon their carts before purchasing.
The most frequently cited reason for cart abandonment is unexpected shipping costs. Many people start a checkout process to see the full cost for price comparison with another vendor who offers lower-cost or free shipping. The “Amazon Prime Effect” has raised a lot of online shoppers’ expectations now that shipping will be included, thus more and more e-tailers are adopting a Free Shipping policy as a strategy for heading off abandoned carts. They simply add an average shipping cost to every item’s price instead. It may not be the full cost, but rather an average of total shipping costs for both higher and lower cost products.
Mobile Adoption Rate (If your brand has its own app)
This is a measure of how many people use your mobile app or the mobile version of your site. If you’re not making a lot of sales from your app, even if a lot of users have downloaded it, there may be problems with the user interface. Test its performance and look for potential roadblocks, too-small CTA buttons, or other problems.
For all of the above customer metrics, if you aren’t exactly certain what a certain data point means you can test your hypothesis with A/B testing. Experiment on different customer subsets before committing to a change.
