The increasingly competitive ecommerce market is giving merchants an opportunity to create revenue streams, but it also gives customers more places to shop, making strong experiences increasingly critical. It isn’t enough to be convenient, as that’s industry standard now. It also isn’t enough to just have a good design, because brands often need custom setups to stand out. Instead of focusing on isolated issues, organizations need comprehensive ecommerce strategies that drive a positive end-to-end customer experience.
Driving such experiences begins with knowing how people respond to your site. In particular, you should understand your business well enough to align interfaces and site navigation decisions with the specific customer demands you face. This is a complex issue, but a deep understanding of these three key performance indicators (KPIs) can help you make better choices:
1. Conversion rate
Okay, we know, looking at conversion rates is ecommerce 101. However, a Business2Business report made an interesting point about how organizations tend to use the metric.
“Don’t just look at conversion rates in general, dig into seasonal and periodic variances in the metric.”
According to the news source, many companies tend to look at conversion rate as a broad descriptor of the type of experiences their customers are having. The theory is that strong conversion rates points to solid customer satisfaction with how a site operates. However, a variety of factors can skew these figures, creating an illusion of positive experiences. In particular, the report pointed to a big sale as an event that can drive conversions even if customers aren’t actually having a positive experience on your site.
Don’t just look at conversion rates in general. Dig into seasonal and periodic variances in the metric and try to identify any trends that point to what is working on your site and what isn’t.
2. Customer lifetime value
Calculating and analyzing a customer’s projected lifetime value can help you cater sales and promotions relative to spending expectations. Furthermore, you may even be able to recognize opportunities to adjust your product line if you find that the types of offerings you provide don’t align with likely customer spending based on their potential value.
This metric can also help you focus your marketing efforts on the most valuable customers, something Payment Week highlighted in a recent report. Affiliate market is remaining relevant in today’s e-commerce landscape, and one of the ways it is doing so is by using the expected lifetime value of a prospective customer to build out leads and develop targeted campaigns.
Developing a deeper understanding of the expected value of your customers can play a critical role in helping you make nuanced changes to a variety of strategies.
3. Cart abandonment
This may be another metric that comes up in e-commerce 101, but it’s another KPI that is getting renewed attention. A Statista study found that the average online shopping cart abandonment rate was 77.3 percent in the second quarter of 2017. For comparison sake, the industry average in the fourth quarter of 2015 was 75.6 percent.
“The ecommerce industry that has yet to solve the longstanding cart abandonment issue.”
These statistics point to an industry that has yet to solve the longstanding cart abandonment issue. When it comes to managing the customer experience, looking closely at the instances of cart abandonment can go a long way in helping you identify the pain points shoppers face on your site and adjust accordingly. As you analyze abandonment, you should consider everything from load times and branding to security and convenience. Any of these factors can impact whether customers go through with purchases.
This list could keep going as plenty of metrics can help you learn more about your brand. However, focusing in on these three core KPIs can help you identify the best ways to adjust customer experiences in light of how your site performs. Ask our eCommerce experts about other KPIs relevant to your online store.