Determining success is often in the eye of the beholder and what’s important to one ecommerce company may not be important to another. That’s why it’s vital to rely on common, industry-accepted metrics to determine performance.
In 2021, the globe market size was valued at $6.8 trillion and is projected to expand at a compound annual growth rate (CAGR) of 19.7% from 2022 to 2030. That means that competition for a piece of that market is fierce.
However, these important metrics and key performance indicators (KPIs) will at least help you understand what should be followed and how to measure yourself against industry peers.
Even basic ecommerce website traffic data will give you an idea of how customers and prospective buyers are engaging with your company. Specifically, what is your click-through rate? Bounce rate? Return visitors? How do you perform with search engines?
Click-through rate shows how promotion of your site is doing and is a good KPI to look at for the health of marketing campaigns, as well as the overall strength of your brand. Bounce rate shows interest in how you’re presenting products and return visitors reflect the enduring interest in what you’re selling.
All can be used to embrace optimization and enhance functionality.
Site visitors don’t come to your ecommerce site hoping to fill out a form. However, enticing customers to make that step is a sign of product interest and your ecommerce platform.
Filling out a form shows an extra level of interest in your product. Within form fills, there are other KPIs to evaluate, such as abandonment and time to completion.
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Marketing-Qualified Leads (MQLs)
MQLs are sales leads that are more likely to become a customer. Your marketing efforts have created interest in your products with a number of customers and they are now a part of the sales funnel. The number and quality of MQLs and where they are in the funnel are valuable in determining the effectiveness of marketing efforts.
Sales-Qualified Leads (SQLs)
Sales-qualified leads are potential new customers that have been vetted by marketing and sales teams and determined to be probable buyers. A SQL has shown intent to buy and an organization’s lead qualification criteria has been met. They’re farther down the sales funnel and are a sign of an effective sales strategy.
Conversion rate is the primary KPI for determining the effectiveness of a marketing strategy. Looking at the number of impressions, social media engagement, views or site visits and measuring how many of those turned into sales shows how well a campaign performed.
Ecommerce companies that rely on digital campaigns will have a high volume of impressions, so even a 2% conversion rate is considered successful.
Average Order Value (AOV)
AOV measures the “quality” of a customer by determining how much is spent by a customer on a typical order. A higher AOV shows that you have diverse product offerings instead of one single SKU that performs well.
Customer Acquisition Cost (CAC)
How much are you spending to gain a single buyer? CAC shows how effective and efficient your marketing efforts are.
Are you using significant resources to gain just a few customers? Or are you running quality campaigns with strong messaging that attracts new buyers without spending a fortune?
Repeat Purchase Rate
Is your customer base satisfied with your products? How often do they return for additional purchases? What is your churn rate? Returning customers have an increased customer lifetime value (CLV) and are a sign of good products, services and customer satisfaction. They’re great evangelists of your company and should be highly valued.
Cart Abandonment Rate
Shopping cart abandonment rate refers to website visitors that put a product in the virtual shopping cart, but fail to actually make the purchase.
For ecommerce companies, this reflects friction in the checkout process. Creating a simple and user friendly checkout will be reflected through this metric and increase online sales.
Customer Retention Rate (CRR)
CRR is the percentage of customers that return to your site to make additional purchases and is a key benchmark. Keeping a core of repeat customers is vital for ecommerce businesses. Creating customer loyalty programs to entice return visits will help here.
Return on Investment (ROI)
ROI can be applied at the macro and micro level. Successful companies look at the ROI of most decisions to determine what their impact is. Companies must get value for spending resources and tracking ROI is how to measure profitability.
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The Final Word
B2B ecommerce companies are flush with data. This information should be used to shape marketing campaigns, product development, purchase paths and other key parts of your business.
Establishing and tracking key metrics goes below the surface to create deeper learnings and insights that can shape all parts of your company. Not following B2B ecommerce KPIs is a massive missed opportunity and leads to less informed decision making.