Metrics, which should be monitored, the online store has quite a lot. How not to get lost in the heap of indicators and always keep an eye on the pulse of your business?
Without a clear KPI, it is impossible to imagine an effective business, so every online store must have a system of indicators to measure performance. Click to get one.
We’re talking about the most important indicators that need to be monitored on a regular basis.
Unit-economy of a single order
In order to monitor the situation in the dynamics, it is necessary to conduct daily monitoring of the following indicators for each channel of traffic.
CPC (Cost Per Click) – cost per click. The ratio of the cost that an online store spends on advertising in search engines, online publications, thematic sites and other resources to the number of clicks on this advertising. That is, it is the amount that the advertiser spends for one user who went to the site on an ad.
CTR (Click Through Rate) – the ratio of clicks on ads to the number of their displays. This metric helps to determine the effectiveness of a particular site for advertising, the effectiveness of the advertising campaign as a whole, as well as individual ads.
CPA (Cost Per Action) – the cost of the targeted action of the visitor to the site. Targeted action can mean registration on the site, subscription to the newsletter, adding to the basket, etc. CPA is one of the cost-effective advertising models because the advertiser pays only for a specific action of the user.
CPO (Cost Per Order) – the cost of one order, i.e. the ratio of advertising or marketing costs to the number of orders received. Unlike CPA, in this case, only the purchase is considered the target action.
This is one of the most important indicators in eCommerce and online business, as it helps to understand the cost of one order in different channels. CPO is an indicator of advertising performance. The lower it is, the higher the profitability.
CRR (Cost Revenue Ratio) is the ratio of all advertising costs to the revenue that this advertising brings. That is, this metric is similar to ROI and helps to evaluate the effectiveness of investments in advertising campaigns.
The indicators we talked about above should be monitored every day, but there are metrics that play an important role in the long term and are important for strategic decision making.
AOV – Average Order Value is the ratio of the total value of orders made (i.e. income received) to the total number of orders for a certain period. It is measured in monetary terms.
By understanding how much each order brings in, you can adjust your development strategy. Based on traffic and conversion values, the average check size allows you to predict the online store’s revenue.
How to increase the average check
You can increase the size of the average check with the following suggestions:
- Free delivery on reaching a certain order amount
- Providing discounts when buying several copies of the product, etc.
Offering user-related products or accessories on the cart page has a positive effect on the average check size.
All metrics are created in order to make objective conclusions on the basis of data-driven analysis and optimize business processes to increase revenue and profit of the online store.