Deepak “Dee” Agarwal, C-Suite executive of several major online retailers and successful entrepreneur, provides his insights on how to determine what eCommerce metrics are most effective to track based on the business’s goals.
Atlanta, GA, 18th August 202, ZEXPRWIRE, Keeping an eye on key metrics is crucial for eCommerce sites to help gauge overall performance, identify customer pain points such as lagging load times or shopping cart issues, and inform data-backed decisions that can lead to increased conversions and profitability.
We spoke with Deepak “Dee” Agarwal, long-time C-Suite executive of several major online retailers and successful entrepreneur, to provide insight on how to determine what metrics are most effective based on the business’s core goals.
“While there are plenty of metrics that can help guide your business, tracking all of them could prove counterproductive. It’s important that leaders don’t measure just for measurement’s sake, but hone in on metrics that can actually advance business objectives,” Dee Agarwal explains.
Questions to Guide Measurement Approach
Deepak Agarwal recommends asking three questions to help you determine which metrics to track.
“First, ask yourself if this metric changed, what impact would it have on my business and how big of an impact would it create? Knowing the answer to this question is a key starting place for developing actionable reporting,” Dee Agarwal says.
For many companies, one of the most commonly tracked metrics is the Sales Conversion Rate, which tracks the number of conversions that resulted from overall site visitors. While this insight is helpful in determining if there are roadblocks in the site’s conversion pipeline, it doesn’t tell the whole story. That’s why other metrics such as Average Order Value, Customer Lifetime Value, Site Bounce Rate, and many others can be critical to assessing success, based on the company’s overall business ambitions.
Once a company is clear on which metrics impact the business, they then must align those metrics against business goals, and set relevant benchmarks.
“What are your goals for your company this year? Is it to increase sales? Is it to gain more new customers? Is it to improve your online store and drive greater repeat purchases? Whatever it is, you should track the metrics that directly correlate to your company goals,” Dee Agarwal says.
If the priority of the business is to increase the number of customers, tracking Customer Acquisition Costs may be an obvious choice for evaluating whether the investments made to drive traffic to the eCommerce site are successful. However, if the business’s main objective is building a loyal customer base, Returning Customer Rate and Net Promoter Scores, the measurement of overall customer loyalty and satisfaction may be more informative. “Net Promoter Scores provide visibility into not only the health of customer relationships but also valuable insights on the growth prospects of the company,” explained Deepak Agarwal.
The last question leaders should evaluate when thinking about metric tracking is how various metrics impact other KPIs. For example, a company could lengthen their checkout process by requesting more personal information from shoppers in an attempt to increase their understanding of shoppers to improve their targeting and advertising. While this additional information may result in ads that increase site traffic, this initiative may also increase the Cart Abandonment Rate, as some shoppers may be deterred by the cumbersome checkout process. Gains in one metric may produce decreases in another, and it is important that companies work to balance their strategies in a way that best serves all goals.
“Answering these questions is paramount in determining the metrics to track based on what success for your business looks like. The only thing left to do is identify and understand each metric and how you can leverage the data to improve your business,” Dee Agarwal points out.
Continually evaluating key metrics that align with the business’s goals is necessary to ensure the business is on track to meet existing ambitions and identify areas of obstacles hindering growth. “Once you know what you need to measure, and the impact each metric has on your core goals, that’s when the equation to success becomes simpler”, Dee Agarwal says.