“First and foremost, you want to understand your traffic,” says Shannon. “It’s important to monitor the number of visitors that you're getting to your shop.”
The high-level overview of how many visitors you’re driving to your store in total is undeniably important, but there are key metrics hidden within your total traffic that can be even more useful for spotting opportunities for growth.
“It’s about understanding your visitors. Where are they coming from, and how many are there? That might be in terms of marketing channels, which tells you how they found your store, but it’s also where in the world they’re living. Those two pieces of information can help you plan and target your advertising.”
Once you’ve got a solid understanding of how people find your store today, and where they’re coming from, you can make better decisions about everything from which channels seem to be working, to the importance of international shipping to your business.
“Your store’s conversion rate is important to keep an eye on because it shows you whether or not your visitors are converting to customers,” says Shannon.
Basic eCommerce metrics: conversion rates
There’s not just one conversion rate you should be looking at, however. There are three numbers in particular which you should track closely: how many people add items to their cart, how many people reach the checkout, and how many people then go on to purchase. Each stage can provide useful information about how your store is performing.
“Watching your conversion rates can help you understand if you’re converting a meaningful number of visitors into customers, or if you need to optimize.”
Conversion rate optimization (CRO) is a discipline unto itself, and how you go about it depends on your industry, your customers, and your product. While there will always be some customization based on your store’s specific traits, reviewing the basics is a great place to start.
We couldn’t talk about core metrics without mentioning total sales. After all, this is a make-or-break number for your store and one you’re sure to have your eye on with or without our advice.
To get a deeper understanding of how everything works together, you can start by looking at a few months of sales data, broken down by day. Are you seeing any trends as to when people are buying more from your store? If yes, ask yourself if you know why that’s the case, and how you might be able to build sales on other days, increase the number of sales on popular days, or both.
As an example, if you notice a spike in sales on Monday, and you’re not sure why it’s a consistently popular day, you can link that information to your traffic. How are people finding your store on Mondays? Is it different than other days of the week? This could be a great starting point for new campaign ideas and optimization efforts.
Average order value
Your average order value (AOV) shows you how much the average customer spends in a single transaction on your store, and it directly influences important aspects of your business, such as your margins or your ability to absorb shipping costs. Increasing your AOV can boost your revenue without needing to find new sources of traffic or ways to improve your conversion rates, which makes it a powerful metric to track and optimize.
New vs. returning customers
Another metric that came up in conversation as an important measure of your store’s performance is the mix of new versus returning customers. You’ll ideally see a balance between new customers and returning customers, and what constitutes a good percentage of new customers may change over time.
As a general rule, it’s both easier and cheaper to convert an existing customer than it is to find and convert a new one. Then again, everyone’s a new customer at some point. You’ll want to keep a certain percentage of new customers in order to keep growing your business.