How To Measure E-commerce Success?

  Solace  Infotech    January 20, 2022    93

 

Since the past few years, e-commerce business has hit a spike, and is continuously growing. Pandemic adds more value to the ecommerce business than ever. This also increased the competition among various ecommerce development companies. Developing an ecommerce website or app is not sufficient. They need to do a lot of work on marketing strategies to achieve success. Here we’ll discuss some key factors to measure ecommerce success. These factors give a real insight into ecommerce business at every stage of its growth. 

Factors To Consider While Measuring E-commerce Success-

1. Personalized Buying Experience-

Personalized customer experience is a trend in 2021 and can continue onwards too. It can boost your e-commerce business to the next level. It has been analyzed that, 64% of consumers want customized buying experience and expect that you will predict their next step. This way, you will adapt their experience as per predictions. Localization is a way to start personalization experience. It is an important factor to satisfy the growing expectations of today’s users. If you’re selling your products, you can prove more ecommerce success. Hence it is important for e-commerce development companies to know their customer’s behavior and adapt the experience i.e., descriptions, prices and so on. This will help companies to achieve ecommerce success. 

2. Conversion Rate-

Conversion is an ecommerce metric to measure. Simply, conversion rate is a number of site visits you get divided by total number of transactions. For instance, if you receive 1000 site visits and 250 of those purchase an item, then sales conversion rate is 4%. Converting visitors to buyers is one of the biggest indicators that your offerings are attractive to target audience. Conversion can also be used to track success of specific marketing efforts. 

How to measure?

It is good to take a funnel-based view of conversion and get a better understanding of what’s happening on your ecommerce website. Ecommerce shopping is a journey of series of entering your website, browsing product pages, checking FAQs, adding product to shopping cart, and lastly transactions. Knowing the details of where and when you’re seeing a major drop-off in customers will tell you that where to focus conversion rate optimization efforts. 

For instance, if conversion rate drops after site visitors look at your FAQs, this warrants further investigation. If ecommerce returns policy is strict where competing retailers aren’t, you might require to adjust this to remain relevant to potential customers.

3. Customer Acquisition Cost (CAC)-

Ideal scenario is to attract customers by organic, but this is not for most businesses. As e-commerce grows, brands are focussing to spend more on acquiring customers. Customer acquisition can cost you up to 7 times more than selling to existing customers. 

How to measure CAC?

Customer acquisition is a sum of total sales and marketing costs for a particular period, divided by total number of new customers. It includes email marketing, paid search, social media campaigns and any other investment that is designed to increase the number of visitors and conversions on ecommerce website/app. When cost starts to outweigh the gains, you need to analyse whether or not your sales sand marketing efforts are paying off. But there are some warnings.

Only acquisition cost can give you an inaccurate perception of ROI. If high CAC is outstripped by your average order value and customer lifetime value.

4. Keep An Eye On Social Media Trends-

Social media helps to increase online visibility of any business. This plays  important role in e-commerce success. As per research, it is expected that approx. 2.5 million people will be using single or other social media platform in 2020 for ecommerce success.  

Reason behind this is, businesses know need of social media platforms for their ecommerce success. Ecommerce campaigns can grab the people’s interest very quickly. 

5. Percentage Of Repeat Customers Vs. First Time Customers-

Percentage of new vs existing customers shows the customer retention rate and is closely related to customer acquisition costs. If returning customers are already familiar brand and offerings, cost of acquisition will be lower. 

You should have a slightly higher percentage of returning customers that new customers. If opposite is true, this indicated that you could be having trouble in brand building in your customers- and your CAC will be considerably high.

How to measure?

You can find new vs returning visitor report in Google analytics, along with the average session length and number of transactions resulting from every user type. This will allow you to analyse the customer behavior like length of time they spend on product pages. Sometimes, conversion rate will be higher for returning customers than they are for first time customers. Because first time customers will want to invest more time comparing options before committing to purchase. 

6. Net Promoter Score-

It measures how willing the customers are to recommend  your product or service to others. It is used to know the customer’s satisfaction with the product. So as to determine the net promoter, score the customers are surveyed and asked to rate how likely they are to recommend the product. These respondents are divided into three categories:

  • Promoters: They give 9 or 10 and are happy with the brand and will surely promote the product.
  • Passives: They give 7 or 8. They might be satisfied and purchase again
  • Detractors: They give 6 or lower. These people aren’t very likely to recommend the product. 

Ensure to reach out to the detractors and passives to know their customer experience.  

7. Cart Abandonment Rate-

It is the percentage of customers who add items to their cart but leave without purchasing the item. This is very common and important metric because it is related to conversion rate and revenue. High cart abandonment rate means there is friction in the checkout process. It indicates a lack of trust or the customers are not sure about return policies and shipping costs. Cart abandonment can’t be completely eliminated, but can be improved by making checkout process easier for customers. 

Also know- How To Optimize Ecommerce Checkout Page?

8. Email Opt-in Rate-

It is a percentage of site visitors who subscribe to your mailing list. Subscription is totally voluntary and hence visitors should be given incentive so that they can join email list. If visitors are willing to sign up to email list, means they are interested in products or services. They will make a purchase in future. 

Also know- How To Secure An Ecommerce Website And App?


 Article keywords:
ecommerce, success, software

 


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