E-Commerce store owners understand very well that having a huge volume of data can be very confusing and misleading at times. In this article, we shall discuss three metrics we expect you to track so that you can make use of your data more efficiently.
Rate Of Shopping Cart Abandonment
Shopping Cart Abandonment Rate is a one metric that you have to track since it provides great insight into the reasons your products are not selling. Sometimes customers are given unforeseen costs before the end of the process. If you notice a higher abandonment rate by customers towards the end of the checkout process and you add tax and shipping at the final level, it means that you may be blindsiding your customers. Go ahead to fix this by including these fees as soon as the user checks the cart. Other issues may be that customers are finding better rates elsewhere and your checkout procedure is too tedious, or the delivery options do not match what they want.
There are a lot of ways that you can use to recover customers that have abandoned their carts. One of the ways is to send them an e-mail after a day or two informing them that they have not completed checkout they initiated. If possible, you can also include a discount code if they complete the order. Just make sure that you do not bombard their inbox with this e-mail as you might annoy returning customers who also planned to go back to complete the order eventually
Average Order Value
Taking a look at the average order value is an excellent way to review your customers and their spending habits to enable you to manage your store better. To determine your AOV, make use of this formula: (sum of all revenue)/(total number of orders over a certain time frame).
If you see a low quantity compared to what your average price is in your store, this means that your customer is not buying multiple products and the lower priced items happen to be more popular.
If you see a higher value than your average price, go deeper to understand if clients are attracted to the higher price or if they are shopping for multiple products. The result will help you adjust your products with your customer base. The larger the AOV, the more the profit you are making, so we suggest monitoring it weekly if you can’t do it daily.
Promotional Response Rate
This metric is concerned with whether your promotions and advertising campaigns are improving the brand or not. For instance, when you send a marketing e-mail, it is important to track the number of users that respond to it and whether it significantly raises your sales. A positive response does not necessarily mean you must continue with the promotion, especially if you were selling a very small number of products before. In such case, it could mean your item prices are too high.
Likewise, if you do not get a positive response, but your store is already selling the products at a volume that you are satisfied with, it shows that you do not need to reduce your rates to increase your sales. However, if you receive a low response rate and you are unhappy with your sales, you might need to reconsider your selling strategy, because the issue might not be in the prices of your items but other areas, including shipping time or quality/quantity of the product. If you do not believe that is the reason, then probably the promotion did not reach the right audience or was not very clear, and your next step must be re-strategizing your promotional technique to reach more interested people.