8 Key Metrics Every Ecommerce Business Should Look At

Now more than ever digital platforms are becoming increasingly important in the business world. Having a website for a business has become a must-have in order to grow and have a bigger reach. There are many benefits to this, but how does a website reach its full potential? This is where the powerful tool of Google Analytics can help.

Metrics 101

The website is up and running, Google Analytics (GA) is set up, data is flowing in, now what? What data should an e-commerce business focus on? What’s important and what isn't? Lucky you already have the answer to these questions, it's all based on your business goals. Having specific business goals will help you create Key Performance Indicators (KPIs), unique to your business which will then point you to the right metrics to look at in GA. KPIs are pretty much anything that can be quantifiable that gets you closer to reaching your business goals, such as the number of newsletter sign-ups, for example. Once you’ve identified your KPIs, it will be easier to identify the right data to look at on GA. There are 3 different kinds of metrics in Google Analytics, acquisition, behavior, and conversion. The acquisition metrics are exactly what it sounds like, the data from this category will show you how you're acquiring new customers and who they are demographically. Behavior metrics will show you the user journey and how they are behaving on your website. Lastly, conversion metrics will show you if your website is “converting”, meaning if they are doing what you intended your users to be doing on your website, such as buying a product, downloading an image, reading your article, etc.

What we recommend to our clients

At RHUX Analytics, we recommend 3 different priority buckets to help our clients identify which metrics to use by strategizing a tagging configuration that works best for each of their companies’ goals. In Priority 0 we have core metrics such as pageviews, add to carts, checkout flow, and transactions. For P1 we focus on primary customer engagement metrics, which are product detail pages, time engagement, and newsletter/email signups. Then in P2, it’s all about secondary customer engagement, which includes link clicks, video engagement, and product engagement. Of course, these are just a few of the main ones and we customize each Priority bucket to fit our client's goals.

Having all this in mind and the fact that there are hundreds of metrics in Google Analytics, these are the ones most e-commerce businesses take into consideration when analyzing their data.

Ecommerce Conversion Rate = How is my website performing?

This is a great way to evaluate your website’s performance since it measures transactions to sessions. If it has a low conversion rate, meaning multiple sessions per user but low transactions, then it's important to investigate if your website is being effective at creating an easy way for your users to navigate and make purchases.

Revenue Per User = Am I being profitable?

This metric gives you an idea of how much revenue you’re obtaining from each user. Some believe that this metric has more value compared to conversion rate when trying to figure out if your website is being profitable. This is because when analyzing conversion rate, you might be looking at the number of sessions it took for a user to make a transaction, rather than the quality of the transaction itself. Revenue per User focuses more on the revenue earned by a user, regardless of how many sessions it took them to convert. This is where you can evaluate your KPIs and what is important to your business goals.

Transactions Per User = How effective is my website?

This is another great metric for e-commerce businesses as it can also provide insight into how well your website is performing based on how many e-commerce transactions are occurring per user. The higher the number of transactions the better, since this shows that your website is easy to navigate, calls to action are effective, your products are attractive, etc.

Session Duration = Do users like my website?

A high average time on the page shows that your users are engaging and are interested in your website. It’s important to use this metric on each of your pages to identify which one of them is providing the most value to your website and to your users.

Average Pages Per Session = Is my content relevant?

Using this as a metric is important to make sure that your sessions are being recorded accurately since this metric will assess how many pages are viewed per session by a user. This metric is also a good way to evaluate how well your users are engaging with your website, which will help assess the content you are presenting and if there are any changes that need to be made to get them to keep them engaged and visiting more pages on your site.

Goal Conversion Rate = Am I meeting my business goals?

This metric, when set up correctly, can provide very meaningful insights. Due to the fact that you can customize your goal to your specific needs, the data provided can help you get a deeper understanding of your user interactions. Some of the goals that can be configured include events like user registration, a specific scroll depth percentage, number of pages visited, etc.

Bounce Rate = Is there something I need to improve?

The one you’ve probably heard about a thousand times! However, it is an important metric to look at as an e-commerce business, that’s because it shows you how many users are leaving your site without any interaction with it. If the percentage is really high, you need to take a look at your website and identify what could potentially be the cause or source, which could be from a technical problem or content-related issues.

Average Order Value = Should I evaluate current strategies?

Most e-commerce businesses consider this metric when doing any business evaluations since it calculates the total revenue by all orders during a period of time. Why is this important? Well not only does it give you an insight into your user's behavior but also can be an indication of how well your business strategy is performing. Based on this data you can assess from pricing strategies to marketing strategies.

In summary, it’s important to keep in mind that there are a lot of metrics in Google Analytics and each business has its own unique goals. However, these popular metrics can help guide you in the right direction and understand how to dig deeper to find the ones that best fit your business goals. For more information, feel free to contact us directly here https://www.rhuxanalytics.com/contact. We would love to hear from you!