Best Metrics for eCommerce in 2023 | Grow your business

Return on ad spend (ROAS)

Return on ad spend (ROAS) is a valuable metric that allows you to track the success of your marketing campaigns. This applies to any advertising campaign you’ve launched across all marketing channels, including social media. The ROAS metric measures how much income you receive for each Rand spent on advertising efforts.

A high ROAS means that ad campaigns are successful. You can avoid low ROAS by optimising your ads and landing pages. Also, ensure that your site is mobile-friendly and look at trends – assess what your competitors are doing that you might be lacking in.

ROAS is measured by dividing the revenue you’ve received from an ad campaign by the amount of money you spent.

Bounce Rate

Bounce rate is one of the eCommerce metrics you want to lower. This is the rate at which people leave your website after they’ve landed on it. Now that you understand why keeping a close eye on this metric is important, how can you lower it?

Firstly, a vital benefit of lowering the bounce rate is that you’ll have increased engagement, which leads to potential sales and new customers. One way to reduce this rate is to ensure your ads or search engine results align with the corresponding landing page. Ensuring high-quality content on your landing page can also improve engagement.

You can track your bounce rate through website analytics (which we’ll touch on below). For good measure, an acceptable bounce rate is anywhere between 20% to 45% – however, anything below this would be excellent for your business.

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The importance of eCommerce metrics for your small business

Tracking eCommerce metrics and KPIs is crucial for any business that wants to improve its performance, increase revenue, and grow its audience. These metrics offer valuable insights into how your eCommerce business is performing, but they can also assist in your decision-making.

If you want to track the success of your business, you will have to measure its progress. This is where data and analytics can make a difference. Not entirely convinced yet? The following reasons may sway you into tracking metrics for eCommerce.

• Metrics can help you to identify trends: Identifying trends in sales performance, customer behaviour, and marketing allows you to make better-informed decisions and get ahead of your competition. It also helps you react proactively instead of retrospectively since you are constantly monitoring these trends. Which means less loss in rands and opportunity.
• Metrics can help you measure your eCommerce site’s performance: Measuring the performance of various metrics and KPIs, such as customer acquisition, retention, and sales, can help you identify your strengths and weaknesses. As a result, you’ll make data-driven decisions that allow your business to improve and grow.
• Metrics can help you track ROI: Tracking your return on investment of advertising campaigns gives you insight into where to optimise your spending and increase revenue.
• Metrics can help you monitor customer satisfaction: Monitoring your customer satisfaction can garner helpful information, such as areas where customers experience concerns and issues. As a result, you can address these concerns and boost customer satisfaction.

Read Next: eCommerce for retailers.

Taking the SMART approach to eCommerce metrics

“SMART” is an acronym for Specific, Measurable, Achievable, Relevant, and Timely. These objectives can be used as a framework for setting and achieving goals for your business endeavours.

• Specific: In this step, you’ll determine your exact goals – what do you want to achieve?
• Measurable: Is your objective measurable for success? Identify what success is for you, ensure the goal is quantifiable, and that progress is easy to track.
• Achievable: After establishing your goals and how they could be a success, you’ll ask yourself if they are realistically attainable.
• Relevant: Is your goal addressing your core business objectives?
• Timely: Once you’ve answered yes to all of the above, it’s time to set a deadline and create a schedule so you can start your new eCommerce adventure.

How SMART objectives help you to achieve your eCommerce business goals

Right now, you might be wondering what goals you are meant to achieve concerning eCommerce. SMART objectives can potentially help you achieve the following goals:

Create a good customer experience

Excellent customer service is your ticket to acquiring and retaining clients. Remember, word of mouth is the most powerful marketing tool that can make or break your business, and with good service, customers will have positive things to say. You can also ask your customers for feedback on the service to constantly improve their overall experience with you.

You can use SMART objectives to identify customer service as one of your goals and then use it to improve your service in various ways. For example, you can set an objective for responding to all customer inquiries within 24 hours and ensuring that all complaints or queries are dealt with immediately.

Increase revenue

While maintaining a steady revenue is fine, nothing beats being able to increase your profit margin. This goal should be on everyone’s list of objectives who want to see a boost in earnings. With SMART thinking, it’s possible to achieve this.

For example, your specific goal can be to offer good quality inventory, consistently, then you’ll do some research to establish if your supply chain can deliver on these expectations. Next, you need to be confident that this goal is attainable – this step would involve assessing the quality of your products and if these are made for the long run.

After that, you need to evaluate and confirm if your target audience would also consistently and continuously be interested in what you have to offer. Finally, you can start by providing good products to your customers – give yourself a time frame to achieve this goal.

Improve your brand

SMART objectives can help you improve and grow your brand. Most people think branding is just a name or a logo, but it’s your business’s identity. Branding is an experience that allows people to notice and recognise your business, enabling you to tell the story you want others to know.

With branding, customers know what to expect from you, making it easier for your business to stand out in search engine results.

Cross-sell to your customers

Cross-selling is one of the easiest business goals to achieve. It’s when you offer an additional product to a customer purchasing from your online store. This will increase the value of the sale, increasing your revenue. Some examples of cross-selling include subscriptions, loyalty schemes, and discounts on future purchases.

If done correctly, this goal can help you retain loyal customers and attract new ones. Also, giving your repeat customers special offers and perks makes them feel valued, which can encourage them to support you continuously. With the SMART objectives, you can measure cross-selling success by analysing the average cart value of each completed order and the number and value of orders your customers took.

eCommerce performance metrics: How to measure vs. how often to measure

There’s no point in assessing eCommerce metrics if you don’t have a plan of action. Recording a summary of all your key performance indicators (KPIs), metrics, and strategies across marketing channels allows you to track and improve them.

Below, we’ll examine how to measure eCommerce success and how often you should do this.

How often to measure eCommerce metrics?

After learning what metrics and KPIs to look for, you might wonder how often you should track them. Overall, the frequency of eCommerce measuring depends significantly on your business goals, the size of your online store, and how much data you generate. Let’s have a closer look:

Daily

Check your eCommerce metrics daily to monitor your site’s performance and to double-check that everything is running smoothly. In this case, you’ll be checking metrics like bounce rates, conversion rates, traffic, and any 404 or 503 site errors that may have recently popped up.

Weekly

Every week, you can check if the state of your business is healthy. Have a look at the traffic again and go over social media engagement and impressions. This is also an excellent time to review your sales data and evaluate your ad campaign’s success.

Monthly

It’s best to check metrics that require a longer data window monthly since these are based on traffic and marketing patterns. These include analysing customer behaviour, email open rates, reviewing customer feedback, reach and cart abandonment, and multichannel engagement.

Quarterly

While daily and weekly metrics can reveal your business’s health, quarterly assessments can determine whether it’s growing. It’s like you’re getting a bigger picture of your business evolving (or devolving). Quarterly metrics rely more on tracking long-tail activities, such as email click-throughs, subscription rates, and customer lifetime value.

You’ll be able to assess your overall eCommerce strategy, encompassing your goals, budget, and target market.

How do eCommerce key metrics fit into your strategy (short vs. long term)

The next question you’re likely asking yourself is: “How do these metrics fit into my business strategy?” It depends. Do you want to start seeing results instantly, or are you patient enough to wait for the desired results that these metrics can provide?

Using eCommerce metrics for short-term goals

You can track the following key metrics if you want to measure your progress towards short-term goals:

• Bounce rates
• Conversion rates
• Traffic sources
• Social media engagement and impressions

Using eCommerce metrics for long-term goals

Alternately, you can track the following key metrics if you want to gauge long-term goal progress:

• Customer behaviour
• Email open rates
• Customer feedback
• Shopping cart abandonment
• Multichannel engagement
• Customer lifetime value

Benchmarking for eCommerce in South Africa: Best Practices

How do you know that you’re using these metrics to their best abilities? Are they benefiting your business, or are you just wasting your time? While these concerns are valid, they’re easy to avoid if you stick to these best practices:

Best Practices

• Organise your data: Index your marketing data from all platforms and channels. Organising your data can help you stay focused on your eCommerce goals and objectives. You can arrange your data into different categories to make the process easier. These can include categories like email providers, Google Analytics, eCommerce store analytics systems, and social media analytics systems.
• Adjust your data according to seasons and trends: Another best practice for eCommerce metrics involves adjusting your data according to trends, seasons, and industry events. Doing this is vital to have updated and improved SEO practices, enhancing your website’s overall performance in search engines thanks to the relevancy of new trends.
• Compare the data captured by web analytics tools to customer behaviour: Looking at excessive amounts of data alone may not help you if you’re not paying attention to your customers, too. Tracking metrics without considering customer behaviour patterns can lead to significant errors and wrong decision-making.
• Track, analyse, and measure your eCommerce site’s shopping flow: Keep an eye on key areas of your eCommerce store, such as check-out sessions, add-to-cart sessions, and transaction sessions. This can help you to identify any sudden reductions in the shopping behaviour flow which could be caused by a problem within the shopping process. If you’re not doing this, you wouldn’t know if customers are experiencing any sort of issue when trying to purchase in your store, which contributes to a higher cart abandonment rate.
• Track your marketing and sales efforts: Make notes of your product category and individual product performance to identify your biggest revenue generators. This is how you’ll see which products are performing well and which are performing poorly. Also, placing your best-performing products helps you decide which items your customers like and emphasise in your ad campaigns. In contrast, this shows you which products need to be improved.

eCommerce business metrics: The ideal timeframe for measurements

So you know what metrics you can use, how to use them, and when to track them.

However, it’s important to note that many digital tactics are not instantaneous in producing results, and consistency over time is where you start to see traction in activity and, ideally, metrics.

We advise you to give any tactic and measurement a timeframe of 3 – 6 months before making a change and seeing results.

Most important eCommerce metrics vs. vanity metrics

Metrics can be divided into two categories: actionable metrics and vanity metrics. Let’s examine the difference between the two and which ones are better for your business.

What are vanity metrics?

In short, vanity metrics tend to lack any substance. While they are considered an analytics item, they are not a signifier of real return on investment. Vanity metrics include comments on social media posts, likes, and number of followers.

What are actionable metrics?

On the other hand, actionable metrics are meaningful and help you to make better business decisions. These are accessible and auditable, including metrics such as customer retention rate, activation rate, and monthly recurring revenue.

Which is better for your business?

After reading each definition above, it’s clear that actionable metrics are far better for your eCommerce business. Below, we’ve created a simple table comparing the two metrics.

eCommerce analytics metrics: How to leverage metrics for business growth

How can you leverage eCommerce metrics to grow your business? Here’s how:

1. Come up with smarter ad campaigns – The data collected by specific metrics, such as return on ad spend, helps you to take a more informed approach to launching new targeted ad campaigns.

2. Manage your inventory better – Metric data can help you manage your inventory more effectively by keeping track of current stock and predicting when you’ll need to resupply.

3. Personalise selling – You can personalise your selling methods to retain loyal or returning customers. Personalised recommendations and communication are fantastic ways to drive sales, encourage good customer relations, and boost repeated sales. Metrics will help you know how to reach your loyal customers by tracking their behaviour on your site and traffic source.

4. Improve customer experience – Excellent user experience (UX) results in a successful eCommerce business and high search engine rankings. Strong UX boosts engagement and lowers bounce rate, which any online business should strive for. With metrics, you can track your bounce rate and measure your engagement to see where your flaws lie or where you can improve.

5. Index and report your findings effectively – It’s important to index and report on all the data you collect while tracking metrics. This allows you to share your results with your team members to help you make informed decisions for your business’s future.

Wrapping up the top eCommerce metrics in 2023

There you have it – an extensive dive into the world of eCommerce metrics. While there are many more KPIs and metrics, you can start your journey by looking at the ones mentioned above. After all, if there’s a way for your eCommerce store to grow and flourish, why not give it a go?

Your worst-case scenario? You’ll have to do more research or look at a different metric. Your best-case scenario? Your online business keeps getting better and better – the possibilities for success are almost endless.

Read Next: 23 eCommerce best practices for 2023