Crucial Ecommerce Metrics You’re Probably Measuring Wrong in 2020

Crucial Ecommerce Metrics You’re Probably Measuring Wrong in 2020

ecommerce kpis

Ecommerce is expanding quickly and connecting the global marketplace, making it a valuable platform for small businesses. In fact, the U.S Census Bureau estimates that U.S. ecommerce sales were $154.5 billion in the third quarter of 2019 alone. Tracking success with business metrics is crucial to continual growth—especially within the rapidly growing realm of ecommerce marketing. However, coming up with valuable ecommerce metrics and analyzing them correctly is easier said than done. Looking to better your business metrics?

Let’s break down some ecommerce KPIs that your company might be measuring incorrectly in 2020. 

What are business metrics?

A business metric is used as a tool to measure company growth. Utilizing metrics the right way can help you establish business goals, create achievable timelines, compare your current sales with that of past years and project intended sales for coming years. Valuable business metrics can also be referred to as KPIs, or key performance indicators, which narrow in on the most important factors a business needs to measure success. 

Ecommerce metrics companies incorrectly measure

When it comes to creating ecommerce metrics that help you measure your business performance in 2020, you want to make sure you’re not focusing on the wrong thing. Here are some of the most common mistakes companies make when it comes time to create benchmarks through ecommerce metrics. 

1. Search KPIs

If you’re not exploring your Search KPIs, you could be missing out on both potential customers and valuable information for your ecommerce business.

What search KPIs typically are:

Search KPIs are typically related to traffic on your website from search engine clicks and overall online engagement as consumers navigate your website. SEO, or search engine optimization, can be the difference between consumers finding your website or never landing on your page. Some factors ecommerce companies typically measure include percentage of site visits from search engines, sales conversions from those visits and keyword optimization. 

How companies measure search KPIs wrong:

When looking at SEO data in 2020, some companies fail to view their results in comparison to where their competition ranks. Search traffic as it relates to the rest of the internet can be confusing and discouraging, as there are seemingly endless other sites with which to compete. 

On an even simpler note, it could be more beneficial to first ensure that a search of your company name pulls up your site rather than focusing on your overall search traffic. When you search your company name, is your website on the first page of results? If not, that’s a problem that needs immediate attention.

Tips for measuring search KPIs right

Focus on the KPIs with actionable outcomes to drive up your website traffic. Consider keyword optimization to improve your visibility online and traffic ranking comparison with competitors to accurately determine what yours should look like. 

Since the process of understanding SEO metrics can be difficult, try using a service like Alexa. The service allows you to see the SEO ranking of different websites, find and place the best keywords for website optimization, identify your ecommerce competition and compare your traffic to theirs. 

2. Text message marketing

According to recent data, approximately 96% of Americans own a cellphone. Not to mention, the average adult in the U.S. spends almost three hours on their phone daily. Since text message marketing is such a valuable outlet to reach your audience, make sure your metrics are correct.

What text message marketing KPIs typically are: 

Measuring text message marketing can be done with KPIs that focus on the size of your contact list and response rate. Here are some common text message marketing KPIs:

  • Text list size
  • Open rate
  • Code redemption rate
  • Number of unsubscriptions after a campaign
  • Sales specifically from text offers and discount codes

How companies measure text message marketing KPIs wrong

While it’s in your company’s best interest to have a sizable text list, the number of contacts you have won’t matter if your texting initiatives are weak. Spamming consumers with texts and providing marketing via text with no actionable link for purchase or further information are tired tactics for capturing your audience. Whether you’re sending a one-on-one text or a text blast, you want to have more specific measures of success. 

Additionally, some companies focus on open rates and engagement while failing to measure the difference in their revenue following a text campaign. After all, your marketing efforts online are meant to create real revenue. 

Tips for measuring text messaging KPIs right

There are ways to measure text marketing effectiveness with data. For example, tracking codes in mobile coupons measure redemption rates. Compare tracking codes redemption rates in different text marketing campaigns to determine which campaigns worked best, and structure future efforts similarly. 

Your KPI should be specific and measurable. If you can’t measure it properly, it probably won’t be a valuable source of information.

3. Abandoned carts

Are you getting a lot of traffic online but not making sales? The culprit could be high abandoned cart rates. Abandoned carts are unfortunately common, with some studies estimating as high as 80% of all digital shopping carts. 

What abandoned cart KPIs typically are

When a potential customer adds items to their cart on your website and leaves without completing the purchase, they’ve abandoned their cart. Cart abandonment commonly occurs for the following reasons:

  • Shipping costs are too high.
  • The checkout process is too long.
  • Your website doesn’t offer their desired payment method. 
  • The total price of their transaction is higher than expected. 

Abandoned cart KPIs often address these common causes, gauging why customers are showing interest and then failing to make purchases. 

How companies measure abandoned carts wrong

Identifying your company’s abandoned cart rate is only a start, as the number itself isn’t very helpful without context. Some companies fail to narrow in on the reason for abandoned carts, which cause them to offer unhelpful solutions. 

For example, let’s say consumers are abandoning their carts on your site because the checkout process takes too long. Offering free shipping as a solution to your abandoned cart rate issue won’t recover these customers and will offer discounts to customers who might have otherwise paid full price. 

Tips for measuring abandoned cart KPIs right:

Why are consumers abandoning carts? Is there a specific item that has been abandoned significantly more than others? Who is your consumer demographic and why do they typically abandon carts online? Asking yourself these questions will help identify the real reason behind any abandoned carts, which then allows you to formulate a solution. 

Abandoned cart recovery rates can be just as valuable as abandoned cart rates themselves. Make sure you’re measuring your efforts to regain the attention of the shoppers who have abandoned their carts as a counterbalance number. 

Choose the best ecommerce KPIs

Ecommerce KPIs are designed to fit the specific needs of a given company, helping identify undesirable consumer patterns and create solutions. The best business KPIs are specific, measurable and actionable. Once you’ve identified the areas in which your ecommerce business could improve, formulate key performance indicators to help measure your continued company growth.

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