10 fundamental e-commerce metrics you should target

10 fundamental e-commerce metrics you should target


If losing your e-commerce store to losses is your worst nightmare, then we have got some tactics to solve that up to quite a high range.

E-commerce business decisions solely rely on metrics. We will focus on the top 10 fundamental e-commerce metrics that you should target for the betterment of your business.

First up, E-commerce metrics is analysing your success rates that you acquire because of your customers. We have hundreds of metrics to focus on, but only a few can actually predict the future of your business.

Ready to know the best of all metrics? Here we go!.

Customer Lifetime value

Your customers invest in you for a period of time or weeks or months that can prevail even up to years. Every time a customer comes across your website and indulges in sales with you, you are benefitted up to a certain extent.

In short, customer lifetime value is the total profit your company earns from a customer over a period of their lifetime.

The formula to calculate CLV goes this way,

CLV = Total number of transactions * Average Gross Value

For example, if you earn 10$ over 4 subscriptions from a customer throughout the life, customer lifetime value is $40.

Customer acquisition cost

Customer acquisition deals with the process of bringing in new customers. The affordability factor, however, can be as expensive as 25%-50%.

Nevertheless, you can manage customer acquisition cost through advertisements, paid promoters, influencers or strategies of the same kind.

To measure, Customer Acquisition Cost you can apply the following formula,

CAC = Promoting or marketing costs / Customers procured.

Customer Conversion rates

When a browser accidentally or intentionally clicks the link to your e-commerce page, he becomes a visitor. If he further gets intrigued by your products and services, he tends to make purchases with you. This is what we call technically as Customer Conversion rate.

Garnering customers attention is not an easy to go process, your website should be something of an eye candy that people get easily pulled by. The aesthetics of your website plays a major role in this and you should make sure to add variety to your website and content.

After all, Variety is the spice of everyone’s life and it’s not wrong of your customers or visitors to look forward to variety in your website.

Cart abandonment rate

Like aforementioned, your customers would no longer be customers if you don’t stand out from the rest of e-commerce stores. This eventually leads to a phenomenon called Cart Abandonment Rate. Cart abandonment is the virtual abandoning of the e-cart.

This could be due to several reasons to list out, starting from privacy concerns to navigational disasters. Reducing cart abandonment is the mandatory task for scaling the business.

Cart abandonment can simply be calculated with,

No of abandoned shopping carts = No of Initiated Transactions / No of completed transactions.

Customer retention rate

The customer retention rate of the process of retaining existing customers than investing in acquiring new customers. Customer retention is totally different and better than that of customer acquisition considering various factors of affordability and easy procedures.

Customer retention can be achieved through several strategies.

Customer retention can be formulated using,

Customer retention rate = Total cost of retention / Retained Customers.

Subscription rate

Who wouldn’t want to increase subscribers every now and then? Paul Graham has once rightly said, “ You can’t wait for customers to come to you. You have to figure out where they are, go there and drag them back to your store.”

Finding new subscribers can be tiring enough but once you achieve the results expected, you would want to go for more.

Subscribers can be brought in through the inclusion of popups, signing of newsletters and much more. It can be elusive but once you know the right strategies, you can master the art of bringing in subscribers.

Unsubscribe rate

Unsubscribe rate is defined as the, request every time a visitor denies from subscribing. This again follows suit with the procedures of subscription rate.

If your visitors are continuously denying from subscriptions, then your e-commerce store is turning to a blind alley.

To name some, come up with interesting content, aesthetic website outlook and increased email frequency.

Unsubscribers rate can be calculated using the formula mentioned,
No of subscribers cancelling / No of subscribers up for renewal.

Email Receptive Rate

Email receptive rate talks about the number of times an email is opened. Email here denotes the promotional emails you randomly send to people. This strategy can also be called email marketing.

Email marketing can be helped through several plugins one such is retainful.com. It assists you in creating and sending automated emails.
Email receptive rate can thus be calculated as,
No of clicks / total number of emails sent - ignored emails.

Ignored emails are the ones that visitors deny from clicking. To be elaborate with email receptive rate, No of clicks: 22 No of emails sent by you: 1000 So after applying the formula, email receptive rate is, 22/ 1000-22 = 0.224 = 2.24%

Powerful tactics of email marketing can come as a saviour to retrieve ignored visitors.

Spam Complaint rate

Now comes that issue, that no one likes to talk about, but it is too important to be left unaddressed. Spam is a bulk message that is sent to people indiscriminately.

One thing that you should be very sure of is to avoid spam complaints but it is not possible every time. When you try to send frequent emails it can sometimes turn to be spams. However, a little effort can be put from your side to avoid spams. Studies say spam complaints should always be less than 0.1%.

To calculate spam complaint rate,
Complaint rate / delivered emails * 100

Average referral rate

Referrals are defined as the number of times when a customer refers or suggests your website to others. Referrals are as powerful as other marketing strategies.

Referral rate can be calculated using this formula,
No of sales happened via referrals / No of sales * 100.

E-commerce is going to be of as equal importance of electricity in the upcoming years. As an e-commerce entrepreneur make sure you leave a footprint in the business industry.

Hope we have helped you with fundamental e-commerce metrics. Cheers!