Measuring Brand Transformation With Land O’Lakes
Land O'Lakes, Inc., best known for its iconic butter brand, is one of the nation's largest cooperatives, owned by individual ...
Today’s retail marketers are being asked to drive performance, impact, and customer loyalty across complex customer journeys and a web of point solutions. With ever more consumers shopping online and the mountain of digital data available, retail is in the middle of a data revolution that is transforming the way retail marketing operates.
At the heart of the retail revolution is ecommerce. The ecommerce market is growing at 23% year-over-year, and in a recent survey, 51% of Americans responded that they prefer to shop online [source]. Online advertising, combined with website tracking, provides retail marketers with an unprecedented opportunity to get the right message to the right people, and the right people to the right products. The stage is now set for retail marketers to deliver a seamless ecommerce experience.
But to understand what’s working – and what’s not – retail marketers need the right ecommerce analytics, information, and dashboards. And furthermore, they need it all unified in one central location, where paid media, web analytics, POS, ecommerce, and customer satisfaction can be combined to show an overall picture of the state of marketing.
Here are the ecommerce KPIs you should be tracking, and how they help you optimize for success.
Expanding your reach is crucial to building a brand and launching new products. These metrics help you measure how you’re scaling.
What is the overall reach of your messaging? Impressions –from social media, to paid search, to display advertising– can be an inflated metric. Still, they’re crucial to understanding how widely you’re casting your net.
Click through rate is a crucial metric across all your digital marketing channels. Make sure you have the ability to segment and filter by all dimensions– to look for trends in badly performing creatives, messaging, or audiences. Especially high CTR across a particular dimension can reveal where your product or brand resonates; take note of these positive outliers.
High-level global retail marketing dashboard
Getting people to your site is just first step. What they do there, and how they’re influenced, can make or break whether they buy, leave, or return.
3) Time on Site
High average time on site, especially with a high average pages per session, can indicate your site does a good job of letting visitors explore your offerings. This makes a lot of sense if your products or services take time to understand.
4) Pages per Session
Similar to time on site, a high number of pages shows not only the diversity of your products, services, and information, but that many different parts of your site can interest the customer. While high site interaction is good, make sure you provide plenty of opportunities to checkout across your top trafficked pages.
5) Subscriber Growth Rate
Many online retailers use emails lists to promote sales or specials, often incentivizing customers with discounts for signing up. Growing your email list is a crucial part of your repeat purchasing audience, who can be some of a retailer’s most loyal customers. Slow growth here may mean you need to add to the incentive, or at least improve the messaging.
These metrics help you understand how to sell more products to your repeat customers, understand the costs to acquire customers, and keep customers loyal.
6) Cart Abandonment Rate
What percentage of sessions added items to the cart, but ended up leaving your site without purchasing? Web tracking is essential here, with separate events created for checkout stages like reviewing the cart, confirming information, and confirming purchase. Whichever the most common point of abandonment is (is it a particular page?) should be reviewed and improved to complete more sales.
7) Average Order Value
Average Order Value (AOV) measures the average total of every order over a period of time. AOV is crucial to keep track of when it comes to advertising spend and product pricing. Scaling your audience and database may be a good time for low average order value, but targeted engagement metrics at repeat customers should enable you to raise AOV over time.
8) Customer Acquisition Cost (CAC)
CAC refers to all the resources allocated in order to acquire a customer. A simple way to calculate this is to sum your sales and marketing expenses, and divide this by the number of customers acquired in a given period. CAC can be driven down as your understanding of what creatives and campaigns resonate with your target audiences right off the bat.
9) Lifetime Value (LTV)
While there are many schools of thought on LTV, technology research company Gartner advises a simpler approach: a top-line revenue number per customer. This enables you to calculate the crucial LTV:CAC, which shows the ratio of marketing return on investment. Every industry and company will have a different goal or optimal number for LTV:CAC based on its model, financing and other factors; however, most are targeting a ratio of 3:1 or better.
If you’re tracking these 9 ecommerce KPIs, you’ll be able to optimize your marketing performance, outcomes, and investments at each stage of the customer journey. Retail marketing has moved to a place where always-on optimization has become necessary – but with the right technology and tools, this process has become easier than you might think.
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