Tracking relevant metrics for your e-commerce platform will put you in a position to understand your business better and decide whether you are making the right move to lead to revenue generation and build the brand‘s image. Most successful e-commerce businesses make decisions based on metrics. Always chalk out the metrics to know the state of your e-commerce platform.

The statistical difference is the measurement of how confident you are of sales conversions and revenue generation. In short, it refers to being sure that one parameter will spell a higher ratio of success when two or more samples are compared. 

Suppose you have service X and Y and know that service X has higher chances of sales conversions compared to service Y, you are bound to use service X almost always. This is known as statistical significance which relies on two variables. Sample size and effect size.

Sample size refers to the amount of data you use. The smaller the data or sample size, means you are relying on a small portion to determine sales conversions. You can over-represent the actual results of your e-commerce business and it cannot constantly be a reliable parameter. Using larger amounts of data involves more work and is time-consuming. But you are more confident about the results and sure to keep using this metric.

Effect size, on the other hand, shows that if conversion rates are minimal, you know these results are not highly successful. If the conversion rate of a larger sample size is more than 40%, you rely more on this metric. That, however, does not mean you wait to collate larger data and ignore smaller sample sizes. Keep tracking results regardless of sample sizes to know in which direction your e-commerce business is heading.

Here are important metrics to keep in mind:

• Sales Conversions:

This refers to the number of purchases made divided by the number of visitors on your e-commerce platform. For one purchase made for every 1000 visitors, the sales conversions translate to 0.1%. Tracking number of hits on your e-commerce platform religiously is important. 

• Website Traffic: 

Get visitors on your e-commerce platform through effective social media marketing, search engine optimization (SEO) and influencer marketing. Market your products on social media platforms like Facebook, Instagram and Twitter, which have a ready huge audience. Track social media and Google trends to know what’s popular online. You can sell these products on your ecommerce store. Analyse your abandoned carts and track what the problem might be. SEO is a must to improve visibility and ranking on search engine results. Track website traffic and conversion rate after using these tools and see how it boosts your business.    

• Revenue By Traffic Source: 

Revenue by traffic source refers to tracking which channels of advertising and marketing generate more traffic to your e-commerce platform and which ones don’t. The reason why this metric is important is to realize where you should spend your money to get more customers to your e-commerce platform and convert potential buyers into frequent buyers. 

Why spend more money on a channel that is not working for your e-commerce business even if it is popular for other businesses. Each business is unique. Focus on what works for you, not others. Instead, spend money on a channel which gets you more traffic for your e-commerce business.                                          

• Email Opt Outs: 

Email promotions help to generate sizeable traffic without depending entirely on platforms like Facebook, Instagram or Google to drive traffic to your website. A high email opt-out rate tells you that you need to change your email marketing campaign. Collecting email addresses is an important marketing activity, but make sure you do not send unsolicited or spammy emails to potential customers. Use built-in analytics in your email marketing tool. Using google analytics to track people signing up for emailers in the ‘Thank You’ section is also another tool to track your email campaigns.

• Customer Feedback:

Customer feedback is important to understand issues and find solutions quickly. You can address most common issues as a part of your frequently asked questions (FAQ) page but address unique issues promptly through live chats, helpline numbers or email. 

Track customer feedback, live chat responses, calls made to the helpline numbers and emails. You can easily find if there is a recurring pattern in customer complaints and address these problems.  Addressing issues on time makes customers feel important and they keep coming back to your e-commerce platform.      

• Customer Lifetime Value: 

This metric tracks the number of products purchased by a single customer through your e-commerce platform and the extent you should go to keep them which includes whether it is worth the cost incurred to retain them. Every customer is important, but you will focus more on customers who buy products or services extensively from your e-commerce platform. 

• Customer Acquisition Cost:

The cost spent on acquiring a customer is called the customer acquisition cost, which should be proportional to the conversion rate. This includes everything from marketing and sales expenses to salaries and overheads associated with attracting and converting a visitor to a customer. If you spend on Google AdWords or social media marketing, track your CPC, keep the cost of acquiring a customer low. You should be able to monetize the time and amount spent on acquiring each customer.

Conclusion

It all boils down to choosing the right metrics for your e-commerce business and not following the herd. What works for you might not work for your competitor. Understand customer behaviour, track overhead costs and conversion rates to work at generating more revenue for your e-commerce business. Do your research, be wise and know where to spend your money.

Author’s Bio:

Shane is an American writer for various digital news publications. After being in the ecommerce industry for more than 15 years, Shane has a good understanding of what it takes to make an ecommerce business successful. He likes to cover newsworthy events related to business management software, eCommerce platform, customer relationship management (CRM) and Quoting software and Value Added Resellers.

His articles give insights into the latest trends in the B2C and B2B ecommerce industry. His ecommerce coverage is robust and provides everything from best ecommerce platform to improving your website site.