4 E-Commerce Performance

Indicators

Introduction

• Do you know how your online store measures up?

• One way to keep track of your store’s performance is to measure its key performance indicators. – Conversion Rate - Shopping Cart Abandonment

– Average Order Value - Customer Acquisition Cost

Conversion Rate

• This is the ratio of visitors that make a purchase among the total number of visitors.

• For instance, if your store receives 100 visitors per month and five of them made a purchase, your conversion rate for the month would be five percent.

• By tracking your conversion rate over a period of time you can see the results of your marketing and advertising efforts as well as any seasonal changes that may affect performance.

• Once you are aware of your conversion rate, you can fine tune your activities to increase more sales without having to increase the number of visitors.

Shopping Cart Abandonment Rate

• One of the least understood, but perhaps most important e-commerce indicator, is the shopping cart abandonment rate.

• This is the percentage of visitors that leave the store without completing their purchase. Sometimes the shopper is distracted and other times they may have found a lower price on another website.

• Since the abandonment rate can be as high as 70%, some online retailers use re-targeted advertising and email reminders in an effort to lure shoppers back to their online store.

Average Order Value

• The average order value is an important indicator for projecting revenue.

• When you’re running a business and spending money on marketing, you need to know what your store expects to realistically earn.

• Otherwise, you could be spending more to acquire a customer than they actually spend.

• To calculate the average order value you simply divide your store’s total revenue by the number of transactions.

• By suggesting complementary products and services while the customer is shopping gives e-commerce stores the ability to increase their average order value.

Customer Acquisition Cost

• The cost to acquire a customer goes hand-in-hand with the average order value.

• Once you understand the true cost to acquire a customer you will have a better idea of the amount you can spend on marketing activities to drive more customers to your store and reach your projected revenue goals.

• To obtain this figure you add up all of your expenses associated with bringing in customers for a specific time period and divide it by the number of unique customers obtained during the same period.

Final Notes

• Improving e-commerce website performance takes time, dedication and persistence.

• Periodically analysing leading performance indicators and taking steps to improve them will help ensure its success.

Thank You

enCloud.com.au