Know your Stats – 10 things you need to track for your e-commerce small business
02/04/2023 | Share:
Metrics are vitally important to the success of any business and understanding these statistics will give you a clearer picture of where your business is and where it may be in future. Firstly we will look at some traditional business analytics that you are hopefully already tracking.
Revenue and Sales Revenue
This is key to the success of any business and should be tracked closely. Knowing your total sales value helps you evaluate the performance of your store, products, and marketing campaigns. Sales Revenue includes all the money you make from selling your products or services whereas Revenue can also include other sources of income such as investments or affiliate programs.
Net Profit
The difference between your sales revenue and any expenses you have incurred to generate that revenue is net profit. This is a valuable metric for gauging the overall profitability of the business and can alert you to any areas where you may need to improve costs. Sales Revenue alone tells you very little about how well the business is performing until compared to other expenses.
Sales Growth
This helps you track how quickly your sales are increasing or decreasing year on year. It can also be helpful in understanding why sales have gone up or down as it can indicate if there are any particular trends influencing your sales.
Return on Investment(ROI)
This is a measure of how well you are using your resources to generate income and profits. ROI gives you an indication of the overall effectiveness of your investment strategy, including marketing spend. You can use it to assess the success or failure of different campaigns.
E-Commerce Metrics
Sales figures, Profit and Return on Investment (ROI) etc. have always been essential for determining the success of your business but in the E-commerce world there are so many other analytics to look at it can make your head spin. Here we look at some of the most important indicators for business success.
1. Conversion Rate
This is the percentage of visitors to your website that actually make a purchase. This is an essential indicator of the effectiveness of your marketing efforts, customer service and website usability. Improving conversion rates should be a key focus for any e-commerce business if you want to increase sales and profits.
2. Average Order Value
This tells you the average amount of money a customer spends when they make a purchase from your store. A low order value can be an indication that customers are not being encouraged to add additional products to their purchase or that prices are too low, meaning less profit per sale.
3. Retention Rate
How many customers are returning to your store? This metric is essential for understanding customer loyalty, as well as spotting any problems with delivery, customer service and product quality. A low retention rate could be an indication that improvements need to be made in these areas.
4. Customers Acquisition Cost
This tells you how much money you have to spend on advertising and marketing to acquire new customers. This cost should be tracked over time to ensure that your campaigns are still profitable and effective.
5. Customer Lifetime Value
How much money do your customers typically spend with you over their lifetime? Knowing this metric can help you decide where to spend your marketing budget, as well as helping you identify the best types of customers to target.
6. Cart Abandonment Rate
This is the percentage of customers who add items to their cart but then leave without making a purchase. There can be many reasons why this happens, such as shipping costs being too high, not having enough payment options or simply buyers changing their minds. It’s important to keep track of this metric and identify any problems that could be causing customers to abandon their carts.
7. Traffic Sources
Knowing where your website visitors come from can help you focus your marketing efforts in the right areas. You should be able to see how effective different channels are at bringing customers in, such as organic search, paid advertising or social media.
8. Customer Satisfaction
It’s important to understand how satisfied your customers are with their purchases. Measuring customer satisfaction can help you identify areas that need improvement and also spot any trends in customer behaviour. This can be done through surveys, reviews or support tickets.
9. On-time Delivery Rates
This metric tells you how often orders are delivered on time. It is important to track this, as customers expect their orders to be delivered when promised. This also ensures that your business will maintain a good reputation and customer loyalty.
10. Product Returns Rate
How many products do customers return after they have been purchased? This is an important metric for understanding customer satisfaction, as well as spotting any issues with delivery and product quality. Keeping track of this can help you reduce costs associated with returns.
These are just some of the key metrics that e-commerce businesses should be tracking to understand how their business is performing and identify areas for improvement. Knowing your stats can help you make better decisions, improve customer loyalty and ultimately drive more profit for your business.
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