There are so many metrics that you could be tracking, it’s often hard to know where to start. Many businesses end up overwhelmed and give up tracking even the low hanging fruit. This doesn’t need to be the case. Tracking a few simple metrics on your website can provide you with a wealth of actionable information that will help you target improvements and accelerate revenue growth.
In our conversion funnel, we mention visitors, browsers, shoppers, and buyers, each of which refers to one of the first four KPIs you should be tracking on your site.
Visits vs Visitors
It’s likely that you are already tracking visits to your site, but you should make a point of tracking both visits and visitors (also called “unique visits”) if you’re not already. For the purposes of most e-commerce KPI metrics, I would recommend using visitors over visits since it is more important to understand how effective your site is at gaining a customer than it is to know how many visits result in a sale.
Total Number of Buyers
You need to distinguish between returning and new customers You’re probably also tracking such KPI as buyers since this refers to the number of individuals checking out on your site, but here too it is important to distinguish between returning customers and new customers. In order to establish a baseline conversion metric, you should start by counting the total number of check-outs as your total number of buyers. You will want to distinguish between returning customers and new customers down the road, but you need to gather data on the entire group first.
Once you’ve established your total number of visitors and your total number of check-outs (buyers) you can calculate your overall conversion rate. Take your total number of checkouts, divide by your total number of visitors, multiply by one hundred and you’ll get the percentage of visitors who are making a purchase. The industry average in the United States is about 1%, but the top performing sites typically do much better.
The overall conversion rate is something just about every e-commerce business keeps track of, but what far too few are analyzing the micro-conversions that lead to purchase, or considering what steps to take in light of their customer’s behavior.
Does your website create enough interest for visitors? Consider for a moment what actions you can take to improve your site performance if you only know your visitors, check-outs, and overall conversion rate. If the number of visitors to your site is low, but the percent that check-out is high, it’s a clear indication that your site is converting successfully and you need to focus your efforts on attracting more visitors. However, if your website is getting plenty of visitors but only a handful check-out it’s unclear what action to take. Should you improve your homepage? Change your navigation structure? Improve your shopping cart? There are so many onsite variables it’s impossible to know where to begin unless you are tracking more data.
For this reason, you should start tracking your bounce rates and your abandoned carts. These are also very commonly tracked metrics, but I still encounter many clients who aren’t following these critical KPIs. Once you start tracking these numbers, you’ll have two more pieces of data for our conversion funnel.
Bounce rate refers to the number of visitors who don’t click to another page after landing on your site, instead they “bounce” back to wherever they came from. In our conversion funnel, we refer to the number of visitors who do click to another page on your site as “browsers.” Once visitors become browsers they are that much closer to making a purchase and it’s important to know how successful your site is at creating enough interest in casual visitors to keep them looking around. You can apply the same conversion formula for this micro-conversion to determine what percentage of visitors convert to browsers.
Cart Abandonment an important metric that is often overlooked Once you know how many visitors become “browsers,” you will want to find out how many become “shoppers.” We use the term “shopper” to refer to anyone who adds an item to their cart or basket. They might never check-out, but they’ve found something on your site they like enough to put it in their cart. If you know your abandoned cart numbers already then you can simply add this number to your check-outs and you will have the total number of shoppers. Apply the conversion formula again to find out the percentage of browsers who become shoppers.
You can calculate the percentage of shoppers who become buyers to create a much more precise picture of how your site is performing. You will also see how each step on the path to purchase is performing and be able to make targeted improvements to your e-commerce website based on hard data rather than guesswork.
In the next few weeks, I’ll discuss a few more of the KPIs you can easily start tracking and post some suggestions on what steps you can take to boost your site’s performance if one of these metrics is lagging. Thanks for reading and be sure to check back regularly for more updates from our experts.