6 most important data indicators for faster development of e-commerce company
Unlike traditional sales, the advantage of e-commerce is the huge amount of data that is collected every day for every visitor, potential or existing buyer. In order to make it easier for you to navigate the ocean of available data and to facilitate data optimization, we have compiled 6 key data indicators that will definitely impact your company's growth.
#1 Conversion rate
Conversion rate is one of the core data for e-commerce. This rate shows the percentage of visitors who became buyers. Note that the conversion rate is not limited to the total number of visitors to the website, but it can help you calculate the effectiveness of different visitors' extraction channels. As an example, you can compare your visitors to Facebook ads and compare them with Google Adwords ad visitors, thus finding out which channel your visitors have been more willing to buy.
A simple example:
The monthly number of visitors to your e-shop is 1,000.
Suppose the conversion rate is 1%.
This means that 10 out of 1000 visitors have made purchases.
The conversion rate is calculated using the following formula:
Number of purchases / Number of visitors x 100% = Conversion rate
#2 Website traffic
We've measured your conversion rate and have successfully completed all the steps you need to improve it. What to do next? The answer is quite simple: increase the number of visitors!
If the conversion rate mentioned in the previous paragraph remains valid or we receive 10 purchases from every 1000 visits, we will receive 100 purchases with 10,000 visits.
More visits = more purchases!
#3 Customer acquisition cost
Do you know how much each new buyer pays you? Do these costs exceed the amount the new buyer is willing to spend? These are two essential issues that need to be addressed as soon as any kind of e-commerce activity is launched.
Buyer acquisition costs are the average cost of one buyer. These include all marketing and sales costs, salaries, and other costs associated with an increase in visitor numbers.
Buyer Cost Formula:
Total Marketing and Sales Costs / Number of Buyers = Buyer Costs
#4 Average order value
If you believe in a ConversionXL article, there are 3 ways to develop your e-business:
increasing the number of buyers;
increasing the average purchase value;
increasing the number of secondary purchases.
Increasing this data index will directly refer to the development of your business.
There are several ways to increase this score:
Upsell - Offer to buy more expensive products of the same category or offer a complementary product, such as electronics or batteries - care products.
Offer free shipping if a particular order amount is exceeded.
Offer a discount or free item after exceeding a certain basket value.
The average purchase value is the average amount of money that a buyer spends on a single purchase and is calculated using the following formula:
Revenue / Orders Placed = Average order value
#5 Customer lifetime value
The value of a marketing buyer is the profit forecast of each buyer for its full relationship with the e-shop over the lifetime.
Why is this indicator particularly important? If you know the exact amount you receive from each buyer, you can more easily calculate your preferred purchase cost and thus optimize your ad channels so that they don't exceed that amount.
There are many different ways to calculate the value of a buyer and don't want to bump your head with complicated formulas. Calculators have been created for this! CLV Calculator is a visually obsolete but very powerful calculator that will carry out all calculations on your site.
If you do not fully understand how this value is calculated (it is not that easy), Kissmetrics has created an easy-to-understand infographic.
#6 Shopping cart abandonment rate
The rate of lost carts is the percentage of buyers who add items to the shopping cart and then cancel it or leave it out of the page before making a purchase. Any e-shop has encountered this and there are many reasons that you will not be able to repair, such as a forgotten bank code card at home, a suddenly discharged device and other human factors. What you definitely can do is reach these potential buyers and remind them of yourself.
Shopping cart abandonment rate formula:
Number of completed orders / Number of carts created / 100 = Rate of the lost carts
This indicator is calculated by most of the finished e-commerce platforms like Shopify. It is important to ask your customer to enter your email address or phone number as soon as possible so that they can be contacted if they leave the basket. Another popular strategy is to show ads to potential buyers on Facebook thanks to Facebook Pixel and even offer a small discount.
These are, in our opinion, 6 primary data indicators that need to be carefully followed by every marketing and e-commerce manager.