You’ll find that the most successful eCommerce stores all have one thing in common: They are proactive about monitoring metrics that matter.
After all, online business owners can make better, data-driven decisions when they know what’s working when it comes to driving traffic, increasing conversions, and securing sales.
However, for a beginner that’s just starting with a home-based business, the sheer number of metrics that can be tracked can become overwhelming.
Worse yet, you might find yourself monitoring data that has no impact on your eCommerce sales.
Whether you run an online shop, a dropshipping business, have a YouTube channel, or just want to get into affiliate marketing, you have to know which metrics to track so you can build on your success.
That’s why today we’re going to take a look at the 4 most important metrics all eCommerce shop owners should be tracking, whether well-established or just starting out.
So, let’s get started.
How to Monitor Metrics That Matter
Before we jump into which eCommerce metrics you should be tracking, let’s first take a look at how to track metrics.
If you don’t already, you should sign up for an analytics tool such as Google Analytics.
It’s free to use and offers a wealth of data that any website owner, even online shop owners, can use to make improvements.
There are five main reports in Google Analytics that you can reference:
Each report will give you insight into where site visitors come from and how they behave once on your website.
And, if you know which data to look at the most often, you can use that information to make improvements.
Now, let’s take a look at the essential eCommerce metrics you should be tracking.
1. eCommerce Conversion Rate
Your online shop’s conversion rate is the percentage of site visitors that took action (e.g., made a purchase) while on your website.
The higher the conversion rate, the more action your online store will see.
You can measure several conversion rates on your website:
- Email signups
- File downloads
- Ad Clicks
- Purchases made
- Registered accounts
The key here is to measure only the metrics that will matter to your bottom line — of course; there is also value in keeping an eye on the other metrics since they can also contribute to your store’s sales — albeit, indirectly.
Just remember, we are talking about the most important metrics to track so you can make a difference and boost your success without drowning in numbers.
To track your eCommerce conversion rates in Google Analytics, you’ll need to create a goal that tells Google Analytics to record the action you want people taking on your website.
Then navigate to Conversions > Ecommerce > Overview:
You can track page destinations, time spent on web pages, the number of pages per session, or events such as downloading a file, subscribing to your email list, or making a purchase.
Here, you’ll also see important data such as the total revenue your online store has generated, the number of transactions, and the average order value.
Are you running a WooCommerce shop and need some ways to boost your conversion rates?
Check out this helpful article rounding up surefire ways to increase WooCommerce store conversions.
2. Top Products
Are you wondering which products are making you the most money in your online store?
If so, all you have to do is navigate to Conversions > Ecommerce > Product Performance:
Here you’ll see how many of each product in your online store has sold.
By finding out which products are “hot” among customers, you can make better decisions, maximize sales, and increase your overall revenue.
Take a look at these best practices for increasing sales of all your online shop’s products:
- Use large, high-quality images to show people exactly what they’re buying
- Add trust badges to ensure customers that their financial and personal data is safe
- Include positive reviews from actual customers, since 84% of people trust online reviews as much as friends
- Add a live chat function, or at least a well-monitored contact form, to your site to answer pressing questions and concerns
- Improve your value proposition to show customers how you plan to make their lives better
By focusing on your target audience’s pain points and the products that are trending, you can capitalize on your eCommerce shop’s strengths and give people what they want.
If, after you’ve tracked your best-selling products, you realize that you are not generating as much revenue as you’d like, consider transitioning to the dropshipping business model.
A dropshipping business relies on trusted eCommerce platforms like Shopify and dropshipping management tools like Oberlo to boost sales.
With Oberlo, you can easily add trending products people are buying to your shop with a few clicks.
You can even conduct your own research and check out their in-depth product statistics so you know you’re adding hot items to your shop that will generate revenue.
Adding to that, Oberlo can help connect you with well-established suppliers and handle things like inventory management, product storage, and order shipments, so you don’t have to.
Doing this eliminates a lot of overhead costs and gives you more time to market your brand, drive traffic to your site, and convert more customers
3. Shopping Cart Abandonment
According to the Baymard Institute, the average online shopping cart abandonment rate is 69.89%.
That means, nearly 70% of the time, the average eCommerce shop will lose a sale even after a product or service has been added to the cart.
To see your shopping cart abandonment rate in Google Analytics, navigate to Conversions > Ecommerce > Shopping Behavior:
Here, you’ll also see data such as no shopping activity, no cart additions, and the rate of checkout page abandonment.
Here are the most common reasons why people abandon their shopping carts mid-purchase:
- No security badges or trust seals at checkout
- Required account creation
- Unexpected shipping costs
- Complicated checkout process
- Website errors or crashing
- No clear returns policy (or unsatisfactory returns policy)
- Not enough payment options
Knowing that people are abandoning their shopping carts on your eCommerce site is only half the battle.
You then have to investigate why they’re leaving without finishing a transaction.
The good news is, Google Analytics provides insight into a part of the problem so you can begin to make improvements and secure more sales.
4. Customer Lifetime Value
The Customer Lifetime Value (CLV) refers to the amount of money you can expect to receive from each customer throughout their lifetime.
By knowing the CLV of your customers, you can better determine how much to spend on acquiring new customers and retaining current ones.
This is great for managing marketing and advertising costs and for improving your acquisition strategies.
In Google Analytics, navigate to Audience > Lifetime Value to see your CLV report:
(Image Source – my account)
This data is broken down into different acquisition channels:
- Organic search
- Paid search
This gives you a chance to see which channels are more likely to result in higher paying customers over a long period of time.
In addition, you’ll see the estimated lifetime revenue generated from each acquisition channel, giving you a better look at where you should focus your attention.
Need some ways to boost your CLV?
Check it out:
- Increase Average Order Value. By getting people to buy more each time they make a purchase, you increase their lifetime value. Some of the best ways to do this are to sell products or services in bundles and aim for upsells and cross-sells in email campaigns.
- Build Better Relationships. Nurturing long-term relationships with your customers will create more repeat customers. Interact with people on social media and blog comments, regularly reward loyal customers with discounts, offer valuable content for people to read, and cater to their pain points to strengthen customer relationships.
- Create a Recognizable Brand. People are more likely to buy from brands they know and trust. By offering nothing but high-quality products and services, investing in superior customer service, and being consistent with all branding elements, people will learn to recognize and trust your brand.
In the end, the goal of increasing your customer lifetime value metrics is to focus on ways you can get people to keep coming back to your store as repeat customers.
And there you have it! Some of the most important eCommerce metrics all online store owners should be focusing on.
If you want to grow your online business, start tracking the behavior of customers on your website.
You’ll find that by tracking the metrics that mean the most to eCommerce success, you’ll be able to make the right changes and generate more revenue than ever before.
Not to mention, you won’t be wasting time on metrics that look good on paper but do nothing for your bottom line.