9x Marketing Metrics You Need To Know To Be Successful In Ecommerce
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You need to keep track of our KPIs to be successful in ecommerce.
A key performance indicator (KPI) is a measurement of the success of a certain process. This term is typically used in business, especially with accounting and finance. Typically, these measurements are put in place to track the process's progress. A KPI will often involve data that is reflective of whether or not the process is being completed satisfactorily. An example of a KPI would be the number of customers that are returning to a business for additional purchases.
These are the metrics you need to know to monitor your KPIs and grow your business:
What is Cost Per Acquisition (CPA)?
The cost per acquisition (CPA) rate is the average amount of money spent to acquire a new customer. This number can be used to measure the effectiveness of marketing campaigns and typically falls within a range of $0.01 - $5.00 for cost per customer. It is calculated by dividing the total amount of money spent on marketing by the number of customers gained from that marketing campaign, then multiplying by 100.
What is Shopping Cart Abandonment Rate?
Shopping cart abandonment rate is the number of times a customer has put items into their shopping cart but did not complete the purchase. This phenomenon is most prevalent among online retailers as opposed to brick and mortar stores. With online retail, customers have a greater degree of convenience as they can browse from home without being pressured by sales associates or other shoppers to buy something. Some have theorized that this behavior occurs because there are no consequences for just taking the time to browse and leave without buying anything.
What is Checkout Abandonment?
The checkout abandonment rate is the percentage of visitors to a website who abandon the purchase process. There are many reasons for customers abandoning their purchase, such as forgetting items in the cart, not wanting to complete checkout at the moment, or doing research on other products before finishing checkout.
What is Average Order Value (AOV)?
AOV rate is a metric that measures how much a customer spends per order. It paints a good picture of how loyal the customer base is to your business.
The AOV rate could have been calculated by dividing the total revenue from all orders during the time frame by the total number of orders or it could have been calculated by dividing the total revenue from all orders during the time frame divided by the number of orders with at least one purchase.
What is Customer Retention Rate?
Customer Retention Rate is the percentage of customers who continue to use a company's service or product for a recurring subscription. It is calculated by dividing the total number of customers at the end of a period by the total number of customers at the beginning of that same period, and then multiplying by 100.
What is Customer Lifetime Value (CLV)?
CLV is a financial model that calculates how much money an individual customer will spend with the company over the course of his or her life.
It can be calculated by dividing annual revenue by total cost, which includes marketing costs and sales costs. A CLV rate of $1,000 per year would indicate that each customer was worth $1,000 to the company in one year.
What is Repeat Customer Rate?
The Repeat Customer Rate (RCR) is a key performance indicator for retailers to gauge the degree of customer satisfaction. It indicates the percentage of customers who shop at the same store again after making one or more purchases. It also measures customer loyalty and can be used as an indicator for retail marketing strategies.
What is a Net Promoter Score (NPS)?
NPS is a measure of overall customer loyalty or satisfaction. The score, which ranges from -100 to 100, is the percentage of customers who are promoters of a company divided by the percentage of customers who are detractors. The higher the number, the better it is for a business as it represents more satisfied customers and less detractors.
NPS is calculated as (Number of Promoters) – (Number of Detractors).
What is Subscription Rate?
A Subscription Rate is a rate that is paid for a single or recurring subscription. The number of issues covered by the subscription, the duration of the subscription, and other factors affect the total price. In other words, it refers to a recurring payment made in order to keep receiving a certain product or service from a vendor.
Conclusion: Marketing Metrics You Need To Know To Be Successful In Ecommerce
In conclusion, ecommerce has grown to become a major and competitive industry and as such, must be properly analyzed and measured for success. KPIs are vital for this process of data analysis and measurement.