Why E-commerce Metrics Are A Windfall For Merchants
By Jessica Foreman
Cash is king year round, of course, but a pile of crisp, new currency isn’t the only trove of riches available to e-commerce merchants in the busy, holiday shopping season. Along with the immediate payoff of heavy sales, the rush of holiday customers gives e-tailers an invaluable flood of data that can continue to pay off into the future, potentially turning one-time shoppers into loyal, lifetime customers.
If the data are captured, integrated, and analyzed strategically, that is.
That point may sound like a no-brainer in our data-driven world, but a surprising number of merchants let valuable information slip through their fingers. It’s easy to see how that happens at the busiest time of the year, but the net result is they are sacrificing the ability to glean actionable insights that can have a profound positive impact on their bottom lines.
In fact, tracking e-commerce metrics at the holiday season can be the second most lucrative activity a merchant can undertake according to a recent blog post from nanorep, which companies with virtual customer assistance solutions.
Tracking E-commerce Metrics Can Keep The Cash Register Ringing
The post points out every time a holiday shopper makes a purchase he or she is also gifting the merchant with a wealth of data that can help them assess and perfect the customer experience. That information, in turn, can ensure greater success when it comes to customer satisfaction and retention, the bread and butter of every business in today’s hyper-competitive marketplace.
The trick is knowing which of an endless range of possible customer service metrics to monitor. A partial answer is some of them are the most obvious KPIs, including high-impact ones such as conversion rate and churn rate. Some others may be less evident at first blush, but have nearly as much to do with long-term customer retention and profitability.
Key Ecommerce Metrics For Every Online Merchant
You can’t make sales if you can’t acquire customers in the first place, and in the world of e-commerce that means establishing and maintaining a successful conversion rate. How many of those holiday shoppers who rushed through your virtual doors are actually making a purchase? Knowing that for the busiest shopping days of the year can give you a solid baseline from which to make projections throughout the year.
Likewise, churn rate tells you both about future business prospects and the current level of success, making it an essential metric to stay on top of. Acquiring customers is an expensive proposition for any organization, after all. To make the investment pay off, it’s necessary to keep a respectable percentage of them. By knowing and analyzing the churn rate, a company can make sound projections and, where indicated, correct glitches in the overall customer experience.
It’s a statistic no one likes to grapple with, but industry-wide nearly 70 percent of customers who make it all the way to the checkout counter end up abandoning their purchases without completing the buy, according to a Baymard Institute study. That makes it important for merchants to keep a close eye on the shopping cart abandonment rate. If it varies significantly from industry norms, or suddenly spikes, shoppers may be revealing crucial information about factors such as price or quality concerns, ease of navigation, or other barriers to buying.
Ultimately, customer lifetime value, or LTV, is the surest measure of a company’s viability and long-range prospects for success because satisfied, returning customers are the lifeblood of a business. The cost of bringing a customer back and back again for repeated transactions is a fraction of that to acquire new ones, and those most loyal customers also contribute to profitability by acting as self-appointed brand ambassadors bringing more people into the fold. With so much riding on LTV, it is an e-commerce metric that can’t be overlooked.
Making The Most Of The Holiday Shopping Season
The full list of e-commerce metrics a business should be tracking is far more extensive, of course. For one thing, the list will vary somewhat from one company to the next, given differing business models and strategies. Yet some key metrics, like the ones above, do remain constant for any organization, and so do the overarching principles behind them.
Only by understanding and responding to the nuances of the customer journey can any merchant perfect the experience and build the solid base of loyal customers that spells success in the long run.
Jessica Foreman is a Durham University graduate specializing in business and lifestyle based writing. She has developed her skills on projects surrounding The British Broadcasting Company and running a print and online based magazine whilst at university. She is currently looking towards starting her Masters in Mobile and Personal Communications as well as broadening her horizons through traveling.