Top 10+ Shopify Store Name Generators: Ultimate Review Guide
By exploring the top 10+ Shopify store name generators, we aim to help you create unique and meaningful store names.
Summer Nguyen | 11-11-2024
This is a guest post written by Khris Steven. Khris Steven is a content marketer and the founder of Khrisdigital.com. He blogs about marketing tools, trends, side hustles, and how small business owners can make more from their business by serving and impacting lives.
Today, there are so many metrics to measure on your e-commerce website. Using Google Analytics alone, you’ll obtain many more metrics than you need. And beyond Google Analytics, there are more data analytics tools. In such a situation, you can get lost in the sea of data. Even worse, you can become committed to chasing down vanity metrics.
Having said that, what are the metrics that matter for your e-commerce store? While you can track so many metrics, you want to ensure you include metrics that tell a lot about your website performance. Here are 7 fundamental e-commerce metrics you should be measuring right now.
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For your e-commerce store, making sales is one of your main priorities. And to improve sales, a vital metric you always need to measure is your conversion rates.
Simply put, conversion rates (CR) measures the percentage of visitors on your website that buy products. According to data from Growcode, the average e-commerce conversion rate across various industries is 2.27%.
To calculate conversion rates, here’s a simple formula you can use: CR = (the number of visitors on your website/the number of sales) × 100%
Beyond your overall e-commerce store conversion rates, you can track this metric for individual product pages or other website pages.
Again, apart from buying, conversions can refer to other actions such as submitting information on your website. It’s also important to track conversion rates for individual products and landing pages.
This way, you can find underperforming pages and take steps to improve them.
Ways to improve conversion rates
One common situation you’ll face in your e-commerce store is to see shoppers load their virtual shopping carts and then leave without buying. According to the Baymard Institute, the average shopping cart abandonment rate is 69.8%.
Of course, there are many reasons this could happen.
They may navigate to an interesting video they need to watch, or to your competitor’s website, or find your website user experience awful.
Cart abandonment can hurt your feelings. But beyond feelings, it can also hurt your business bottom line.
Therefore, you need to reduce the cart abandonment rate. Before you do that, you can calculate shopping cart abandonment rates using this formula:
Shopping cart abandonment rates = [1 - (the number of completed purchases/the number of shopping carts created)] × 100%
So, when your cart abandonment rate is high, you need to investigate its cause. Below, you’ll find ways to reduce your shopping cart abandonment rates.
Ways to reduce cart abandonment rates
Inasmuch as you want to gain more customers, you also want to increase your revenue. Unfortunately, they don’t always go together.
In fact, you can increase your revenues even with the same number of customers. To achieve this, one metric you have to pay attention to is the average order volume.
The average order volume (AOV) measures the average amount a customer spends on your e-commerce store when they complete an order. You can use this formula to calculate this metric: AOV = Total revenue for a period/the number of completed orders for that period
Of course, the average order volume will vary across industries. For instance, a luxury goods store will have a higher average order volume compared to a store selling tennis shoes and socks.
Ways to increase average order volume
While acquiring loads of customers is a great achievement, you have to consider the cost of acquiring them. Quite frankly, if your customer acquisition cost is too high, it negates the good news of acquiring customers.
How do you calculate customer acquisition cost (CAC)? Use this straightforward formula: CAC = marketing expenses for a period/the number of customers acquired during that period
Your marketing expenses can include costs such as the cost of your tools, man-hours, cost of services, and more. Here’s a CAC benchmark across various industries by Flying Saucer:
Apart from calculating the overall CAC, you should also calculate CAC for individual marketing channels.
As a result of this metric, you can determine the most effective marketing channels and invest more in them.
Having said that, CAC needs to be taken into context in some cases. For instance, your customer acquisition cost may be higher than your customer’s first order.
This is where you consider the customer lifetime value (CLV).
After all, a customer may continue buying products every quarter for the next three years.
Ways to reduce customer acquisition costs
This metric measures the average revenue you obtain from a single website visitor. Usually, your revenue per visitor will be over a period. To calculate revenue per visitor (RPV), use this formula: RPV = The total amount of revenue during a period/the number of unique website visitors during the period
Of course, your revenue will also be divided over visitors who bought nothing from your e-commerce store. Nevertheless, you have to consider that every visitor to your website is a potential buyer.
When you obtain this number, it can provide many insights into your operations. You can compare your revenue per visitor to the industry average.
If this value is too low, this may be due to low conversion rates on your website. In that case, you’ll need to work more on conversion rate optimization.
However, if your revenue per visitor is much higher than the industry average, you need to study and know your visitors. Then, you can run marketing campaigns to attract more of these types of visitors.
Ways to increase revenue per visitor
Even if you have industry-leading conversion rates, poor customer retention rates (CRR) can neutralize all your conversion efforts. Without high conversion rates, it’s difficult for your business to grow.
That’s because it’s easier and cheaper to sell to current customers compared to a prospect.
According to Bain & Company, a 5% increase in customer retention can lead to more than a 25% increase in profits.
In another sense, poor customer retention rates can indicate that you’re not meeting your customers’ expectations.
Therefore, you need to know your customer retention rates and uncover why customers are churning. Here’s a simple formula for calculating customer retention rates: Customer retention rates = (the number of customers at the end of a period - the number of new customers during the period)/the number of customers when the measured period began × 100%
The new customers are not considered in the calculation because they’re not expected to leave during that period.
Ways to increase customer retention rates
How much is a customer worth to you, on average?
Customer lifetime value (CLV) is the monetary value of a customer to your store over their period as a customer, and tracking it effectively can be enhanced through e-commerce analytics. Without a doubt, it’s one of the most critical metrics you need to measure on your e-commerce store.
First, you can compare this value to the overall cost you incur while attracting and keeping a customer. Put simply, if your costs are more than your CLV, then you’re at a loss.
Second, CLV helps you understand how effective your operation is. Is your website converting the optimum number of visitors? Is the marketing department getting great results for their budget? Are employees achieving their goals?
Asking these vital questions can provide insights to increase your CLV. But before that, how do you measure your ecommerce store’s CLV?
Here’s a simple formula: Customer lifetime value = average value of a purchase × the number of times the customer will buy within a year × the average number of years they will be a customer
So if you run a jewelry store where the average purchase value is $500, customers buy 4 times a year, and they stay on as customers for 5 years, your CLV will be: CLV = 500 × 4 × 5 = $10,000
In addition to this, you can also calculate CLV for different marketing channels. For instance, Bonobos increased the predicted lifetime value of new customers by 20% by identifying channels attracting their highest-value shoppers.
Having known your CLV, how can you improve it?
Ways to increase customer lifetime value
The global retail sales both online and physical store is valued at a whopping sum of $26.074 trillion and just last year alone, eCommerce sales account for 16.1% of retail sales worldwide. This shows that the e-commerce industry keeps booming crazily.
If you want to achieve your e-commerce revenue and profits targets to take advantage of this boom, you need to track the right metrics. Tracking these metrics provides insights into your performance.
Consequently, you can understand where your e-commerce store is performing well and where it needs to improve. Study these 7 fundamental ecommerce metrics and start measuring them today.
Is there a vital metric you measure that’s absent from this list? Tell me in the comments!