Table of Contents:

Introduction

Chapter 1: Conversion Rate

Chapter 2: Hourly, Daily, Monthly Sales vs Quota

Chapter 3: Average Order Value

Chapter 4: Cart Abandonment Rate

Chapter 5: Bounce Rate

Chapter 6: Cost Per Acquisition

Chapter 7: Best Performing Acquisition Channels

Chapter 8: Customer Locations

Chapter 9: New Customers vs Returning Customers

The Top 9 Metrics You Need to Grow Your Ecommerce Business

Introduction

What are the best ecommerce websites measuring?

How are the top ecommerce websites growing so quickly?

How can you implement essential ecommerce growth strategies?

Ecommerce business owners make decisions every day that directly impact the bottom line. From
product development to keeping customers happy, there is always a question that requires insight,
quick thinking, and strategic focus.

We have compiled 9 metrics to help ecommerce businesses stay focused on the most important
activities and generate revenue.

Setting goals through key metrics will help you and your team make data-driven decisions and see
considerable growth in your business objectives.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

 Chapter 1: Conversion Rate

Conversion rate is the percentage of website visitors that

actually buy something on your ecommerce site.
FORMULA
Knowing your conversion rate will guide your website
design strategy and your online sales strategy.
(# of eCommerce
transactions/ visits) * 100

Why does conversion rate

matter?
Improved conversion rate means a
lower cost-per-acquisition.

A high conversion rate is an indicator

of a positive customer experience.

The better your conversion rate, the

more funds you will have to invest in other
Conversion rate is essential to your ecommerce success
essential areas.
because it measures the profitability of your website.
Your website should be your best salesman.

Improving Your Ecommerce Site’s Conversion Rate

Since conversion rate directly affects your bottom line, you always want to see this metric increase! The average
conversion rate for ecommerce is around 2-3%.

1. How powerful are the images on your website?

High quality product visuals encourage people to
buy. Consumers are more likely to buy a product
that they can see extremely well.

In addition, visuals are an emotional draw for the

human brain. 40% of people respond better to
visuals than just plain text.

Oak Street Bootmakers uses high-quality

product images on their ecommerce website:

The Top 9 Metrics You Need to Grow Your Ecommerce Business

2. Website traffic quality: How targeted is your online advertising and social media?
Is your advertising driving quality visitors to your site? Your advertising should be targeting potential customers, not a
general audience.

Targeted advertising that directs potential customers to your site leads to a higher conversion rate.

Data Tip: When you study the data of your current customer pool, you’ll gain insights on how to target your ideal
customer and can make better marketing and advertising decisions.

3. Is your product and website copy convincing customers to buy?

Quality copy convinces customers to buy. When your product and website copy is persuasive and has distinct personality,
your conversion rate rises, along with your search traffic.

You need to communicate why your products are worth purchasing even though the customer has not seen the
product before in person.

Good copy establishes trust, addresses customer needs, and convinces your customer to take action.

The below product copy on Beardbrand.com gives clear and compelling information about the quality of their pocket
comb.

“ The Beardbrand pocket comb, made by Kent, is one of the finest combs on the market. You may
be wondering what makes a Kent comb different than anything else you see in the drug store -
well, it comes down to the attention to detail. Our combs are handmade, not like cheap combs
which are simply molded plastic.

This comb starts its life as a blank canvas, and each tooth is sawcut into place. After the teeth are
cut, the craftsmen polish them for a buttery smooth finish. While plastic-molded combs are left
with jagged edges that can result in split ends, the refined polish of Kent combs will glide right
through your beard.

This is our pocket comb, and it’s perfect for grooming on the go. It contains both fine and coarse
teeth for added versatility. While it may be a couple dollars more expensive than a cheap comb,
it’s well worth it for something you’ll use every day.
“
4. Can you offer free shipping?
If you offer free shipping to your customers, your conversion rate will go up. Forrester Research found that free shipping
promotions can improve abandoned cart conversion rates by nearly 60%.

If you do have to charge for shipping - make sure your customers are aware of the shipping charges early, before they
decide to buy anything.

5. Are your product videos entertaining and well-done?

Product videos increase the likelihood of a purchase by 64-85%, according to Kissmetrics. Product videos not only increase
conversion, but also encourage people to stick around on your site. Video encourages people to stay on a website 2x as long
and visit 2x as many pages versus a site with no video at all.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

 Chapter 2: Hourly, Daily,
and Monthly Sales vs Quota
Many ecommerce companies only measure sales by the week, month, and year. When you measure
sales by the hour, day, and month, you can identify specific trends and obtain customer data. This data
helps you time your marketing campaigns, emails, and online promotions.

Hourly Metrics: What time of day are your customers buying?

Hourly metrics give you insight into customer purchase patterns. You can also use hourly sales and traffic metrics to predict
the best time of day for sending email campaigns. Grow dashboard metric alerts will warn you if your sales are dropping
below expected levels at a certain time of day.

“If we hit our sales goal by 11am every day, I have confidence it’s going to be a good day,” states Nate Quigley, CEO of
Chatbooks.

Daily Metrics: What days of the week are you generating the most sales? What are your
down days?
E-commerce researchers state that the beginning of the week is the best time for online shopping. This may differ per
industry.

Use your daily sales and traffic metrics to determine when to run promotions and offer sales.

Monthly Metrics: What are the monthly trends for your ecommerce website?
Monthly metrics inform your overall strategy. When you analyze monthly sales metrics over an extended period of time,
say, a year, you can identify trends and predict lower sales months. Those metrics will help you develop strategy for the
coming year.

If you want to improve your sales metrics, this is a great place to start. These metrics will give you a detailed view into the
health of your ecommerce site.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

 Chapter 3: Average Order Value
Average order value is the average monetary value of all
orders from your ecommerce site.
FORMULA
The higher your AOV, the better. Wouldn’t you prefer your
customers spend an average of $50 on every purchase (Sum of Revenue Generated)
instead of $30? /(# of Orders)
= Average Order Value
Over time, a higher AOV makes noticeable difference to
your bottom line.

Many ecommerce business owners turn to general marketing strategies when looking for ways to boost revenue. While
SEO, paid advertising, and other marketing tactics are valuable, you want AOV strategies in place to maximize each
purchase opportunity.

Think about it. Every time a customer spends money on your website, you have the opportunity to increase the final order
value.

If individuals are already purchasing items on your ecommerce site, that means they trust your brand enough to spend
money with you. If you have one high quality product they are interested in, you probably offer other products they
would also enjoy.

Boosting your AOV not only increases your revenue, but also deepens your customer loyalty by offering other products
your customers need.

A high AOV helps your ecommerce site to:

• Boost revenue and sales. Hands down, this is why you want to focus on boosting your AOV.

• Understand and identify your high-value customers. Which customers are spending more?
What percentage of your customers are buying more expensive products?

• Polish your marketing strategy. Capturing data on a particular product bundle that performs
well will inform your marketing strategy.

• Analyze how well customers are responding to your products and brand.

• Adjust pricing strategies.

• Determine performance of your cart experience.

• Manage risk for your business.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

 Boost your AOV with simple promotions and banners:

Offer incentives like free delivery on all orders over a certain price. The below banner was on the home page of
Macys.com during the 2015 holiday season, encouraging customers to spend a certain amount to qualify for free
shipping and free returns:

Offer bundle deals: Sell a TV and a complimentary product in a bundle for a lower price.

Upselling: When a customer is looking at a $300 TV, show them an example of a $500 TV.

Volume selling: If customers purchase 2 TVs, offer a discount at checkout on both items.

Gifts: Offer a seasonal gift if customers spend a certain amount of money on your site.

Discounts with deadlines: Set a deadline on a discount or offer to create urgency, like the below banner from Target.com.

Honest.com lets customers know how much more they have to spend in order to qualify for free shipping.

A high AOV is an indication that your cart marketing, pricing strategies, and promotions are working!

The Top 9 Metrics You Need to Grow Your Ecommerce Business

4. Bounce Rate
Chapter 4: Bounce Rate

According to Google, bounce rate is the percentage of single-page sessions. If an individual enters your site and leaves
immediately without interacting with any other pages, they have officially bounced.

What qualifies as a bounce?

• Visitor opens website, then closes browser tab.
• Visitor returns to previous page, leaving the site.
• Site loads too slowly and visitor leaves.
• Another URL is entered.
• Unclear or lack of a call-to-action; user leaves because they are not encouraged to do anything.

What contributes to high bounce rates?

• Poor design on the entrance page.
• Entrance page is not user-friendly, loads too slowly, or is outdated.
• Lack of compelling and relevant content on other pages of the site.
• Broad keyword search terms and untargeted advertising. Targeted advertising leads interested customers to your
site. Interested customers are more likely to buy and less likely to bounce.
• Single-page sites have high bounce rates.

Why does bounce rate matter?

A lower bounce rate means that visitors are finding relevant and easy-to-access content on your website.

Keep in mind that bounce rate is one of the indicators that Google takes into consideration to rank the quality of your
website.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

How can you improve your bounce rate?
A 50% or less bounce rate is very good, while the average bounce rate is 60-70%.

• Start by setting a goal bounce rate for your ecommerce site. If your bounce rate is too high, you are losing potential
customers.
• Include clear buttons with a call-to-action message. CTA examples: Launch Demo, Buy, Shop Now, Free Trial

Demochimp.com uses the below call-to-action buttons on their entrance page:

WATCH DEMO LEARN MORE

Slack.com includes
a CTA button on the
top right corner of
their website:

• Include more links on your site that lead visitors to internal content. You want to keep people on your site for
as long as possible. Link back to your product pages or other original blog posts within your content.
• Test different keywords and search phrases in your paid advertising to see what brings in high-quality traffic.
• Add more relevant content. Product pages, visuals and descriptions are necessary. To go the extra mile, add prod-
uct videos and reviews.
• Write compelling meta-descriptions for search engines.
• Usability: Make sure your website has readable fonts, appealing colors, enough space, and responsive layouts.

We love the clean design on the Oak Street Bootmakers website:

The Top 9 Metrics You Need to Grow Your Ecommerce Business

 Chapter 5: Cart Abandonment Rate
Cart abandonment rate is when a customer selects items to buy, but then abandons their cart before actually
purchasing.

FORMULA

[1 – (total orders placed on the

site/total “add to cart” clicks)]

The average cart abandonment in 2015 was 68%. This remains a barrier for a number of ecommerce companies from
turning website traffic into customers.

Why do customers abandon their online carts?

How can you improve your Cart Abandonment Rate?
Surprise shipping costs

When the total at checkout is higher than expected, people are more likely to abandon the cart.

Be transparent about shipping costs from the start with a banner on your website.

Complicated checkout process

The less forms your customer is required to fill out, the better. Definitely do not ask your customers to enter the same
information more than once. Make your checkout process quick and easy!

Not enough visuals or details about the product in the cart

Customers like seeing the product details again while in the cart. Include a picture, size, fabric, etc so customers
remember exactly what they are buying.

Customers do not trust the security of your site

Assure your customers that they can trust your website’s security system. People are more likely to enter their credit
card information when they feel they can trust the security of the site.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

Strategies to decrease your cart abandonment rate:

Offer incentives: Throw in give-aways to encourage your customers to complete the process. Jet.com offers 15% off
the first order to encourage checkout.

Provide a progress indicator. Jet.com makes it very clear how many checkout steps are left.

Simplify the process: Avoid the sign-in process if possible. Offer a “guest” checkout option so the customer is not required to enter
extra information.

Offer convenient ways for the customer to pay. OfAKind.com, powered by Shopify, allows customers to pay for item with
PayPal or Amazon Payments, in addition to credit or debit.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

 6. Cost per Acquisition
Chapter 6: Cost Per Acquisition

Cost per acquisition is different than cost per

conversion. A conversion can be anything from
a like on your Facebook page to a new subscrib-
er for your email list.
FORMULA
Cost per acquisition is how much it costs you to get a
sale. Total costs associated with
customer acquisition/total
To calculate cost per acquisition, you need to take into
consideration every dollar you spend to get a new cus- new customers
tomer - from sales headcount to marketing spend.

After you have this number, take a look at your mar-

keting strategies to see which one is most profitable.

When you are just starting out with your ecommerce website,
you will probably pay more for your acquisitions. David Skok,
investor and entreprenuer blogger, believes that Cost per
Acquisition is one of the “core elements” for a successful start-
up.

As you gain a deeper understanding of your audience and

refine your sales and marketing strategy, cost per acquisition
should decrease.

What is a good benchmark cost per acquisition?

It depends on the lifetime value of your product/customer.

If the lifetime expected value of your product brings in $30,000, then $500 is an excellent cost per acquisition.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

6. Cost per Acquisition
Chapter 7: Best Performing
Acquisition Channels
What qualifies as an acquisition channel?
Any channel or platform you invest in to acquire customers is an acquisition channel.

Common ecommerce acquisition channels include: Organic traffic, email marketing, customer referrals, Facebook ads,
Twitter, Youtube, LinkedIn, PPC, Google ads, etc.

Out of all the customer acquisition channels you are investing in, where are you seeing the most custom-
er leads?

In order to maximize your marketing budget, you need to know which channels are generating the most leads and sales. Not
all channels will perform at the same level.

For example, you may find through trial and error that you are able to reach your target audience more
effectively through Facebook advertising than Google ads.

By having real-time data for each customer acquisition channel, you know exactly where to place your marketing dollars, and
where you are seeing the most ROI.

Gabriel Weinberg and Justin Mares, the authors of Traction, a guide to obtaining customers, advise that business owners
should be spending 50% of their time on product and 50% of their time on gaining customers.

“The faster you can run high quality experiments, the more likely you’ll find scalable, effective growth tatics,”
stated entrepreneur Sean Ellis in Traction.

Ecommerce companies should be devoting significant time and resources into their customer acquisition
strategy. As you test different channels, keep a close eye on the metrics that inform you which channel
is performing the best.

What are the best ecommerce customer acquisition channels?

Organic traffic
Organic traffic is any website traffic that is a result
of organic search listings due to the relevance of
terms on the site. Organic traffic is one of the larg-
est sources for ecommerce customer acquisition.
In fact, the highest value customers come from
organic searches.
Organic traffic boils down to providing
useful content for your target audience, so
that they’ll share it with others. When you
consistently do that, your organic traffic
will increase each month.
Neil Patel, entrepreneur, Quicksprout.com

Content marketing is a long-term game. You have to be consistent, research keywords, and provide value to your audience.
There are a few companies that do this extremely well by providing relevant content for their target customers and industry.

Use your Google Analytics to track where your site traffic is coming from and which content pieces are most effective.

A few brands that excel in content marketing are Hubspot, Buzzsumo, Quicksprout, Invision, and Adobe.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

Email marketing
Email marketing is another prominent way to gain cus-
tomers in ecommerce. Basically, companies collect email
addresses and turn email subscribers into customers.

Again, make sure your are measuring the effects of each

email you send.

How many people are opening your email, clicking on

your links, or unsubscribing?

You can integrate your Mailchimp data into your Grow

dashboards to see measure the effectiveness of each
email campaign.

Paid search and ads

PPC advertising on Google is a great way to direct traffic towards your site or generate leads. You’ll need an expert
in Google analytics to help you define your key search terms, create landing pages, and measure the success of each
PPC ad.

Ideally, you want your marketing investment here to pay for itself over time.

Social Media

Facebook, Twitter, Instagram, Pinterest are other channels to bring in customers. Facebook
advertising can be very personalized to reach target customers with specific likes or that follow spe-
cific brands. The more customer data you have, the more effective your Facebook marketing will be.
Every ecommerce business will be different in terms of the most successful acquisition channels,
depending on the product and target audience.

No matter what your target market or industry is, you need to know what your top acquisition channels are and
maximize them.

The Top 9 Metrics You Need to Grow Your Ecommerce Business

 Chapter 8: Customer Location

Detailed customer data allows you to market and sell more effectively.

Knowing the global locations of your customers helps you track trends and
identify top geographical markets.

Ecommerce guru and Wharton professor David Bell asserts that it is “critical to
understand what the offline environment looks like” for your customers.

Customer location data gives you the opportinuty to develop insight as to why
certain locational differences may contribute to high interest in your product.

The first thing that’s really important for any ecommerce business to
understand is that the offline environment is going to explain a lot
about the success in online sales. Firms really need to think about what
kind of locations are going to be most fruitful and why, and then go into
those locations and seek customers.
David R. Bell, ecommerce guru and Wharton professor

As you collect geographical data about your customers, you

can then refine your marketing campaigns and paid advertis-
ing based on location.

Jet.com even uses customer location data to offer discounts. If

customers enter their zip code, they are eligible for extra sav-
ings based on “delivery location.”

How can you analyze your customer location data?

Measure the zip code data or the IP data from your customers. Analyze the
locational data of that zip code - for example, how many colleges are in the
area, what is the population density, how many malls or boutique fashion
stores are there, what are the weather patterns, etc.

David R. Bell, ecommerce guru and Wharton professor

The Top 9 Metrics You Need to Grow Your Ecommerce Business

 Chapter 9: New customers vs
Returning customer orders
Repeat Customers Generate High Revenue in Ecommerce

Repeat customers are the key to long-term business success. Once you have gained the trust of a
customer and delivered products to them successfully, you want to maintain that relationship and
continue selling to them.

On average for ecommerce companies, 43% of revenue comes from returning customers, according to BigCommerce.com.

It is cost-effective to maintain and invest in a repeat customer rather than only invest in in new sales leads.

By tracking the number of repeat customers and new customers, you can learn a few things about your brand to inform your
strategy:

Are your customers coming back?

Are your customers satisfied with their first purchases?
Did your customers have an enjoyable experience with your company and the delivery process?

If your metrics for repeat customers are low, then you need to pay attention to customer feedback to improve the
experience.

Aquire New Customers with a Data-Driven Strategy

How many new customers do you want per month?

Where will these new customers come from? (Use your customer aquistion data to determine your best platform)
How much does each new customer cost to aquire?

As you study your new customer data, you will make better decisions about product development and how to dive into
new markets. Test a number of platforms, then stick with the channels that bring the best returns and most loyal customers.
Customer aquisition data is central to a growing ecommerce business.

Grow is the simplest way to access your data and visualize it in a real-time scoreboard. Grow’s
affordable business intelligence (BI) platform is built for small to medium businesses who are frustrated by having to run
time-consuming reports with scattered information that’s quickly out-of-date. When business performance is measured, it
improves. Grow has a pre-built ecommerce dashboard that covers all 9 of these metrics and more. Stop wasting time pulling
Excel reports from your various systems and get easy, instant, up-to-date reports from Grow. Click here for a demo of our
ecommerce dashboard.

http://www.grow.com/bi-demo/