Like any kind of business, the most successful e-commerce businesses make informed, strategic decisions based on metrics. They know how their store is performing and where exactly they would like to improve. A common management principle states that what is measured gets managed, so while there are thousands of metrics you could track, it’s important to select the right ones to get the desired results.
“The goal is to turn data into information, and information into insight.”
– Carly Fiorina (former executive, president, and chair of Hewlett-Packard Co.)
The danger in tracking irrelevant business metrics, also called KPIs (key performance indicators), is that they can distract you from focusing on the things that truly matter. So it is highly important that you not simply track business metrics, but strategically choose the ones that can give rise to actionable insights for business growth.
Here are 5 key metrics to focus on in order to grow your business in 2020.
1. Conversion Rate
Conversion rate is the granddaddy of metrics for e-commerce, and is the metric you should worry about the most. It’s the percentage of website visitors who decide to make a purchase. As of Q2 in 2018, the average e-commerce conversion globally was 2.86%, and 2.63% in the U.S. Be aware that conversion rates vary by industry.
The most straightforward way to grow your e-commerce business is to improve your conversion rate. That means you need to know what your current conversion rate is, and have a way to track the data as you make changes to see what works. If you don’t already have it, get a tool like Google Analytics to gather data. (Hubspot’s Ultimate Guide to Google Analytics can help you get started.)
Tracking overall conversion rate and experimenting with changes in website design, different offers, various CTAs, and other elements is essential to improving conversion rate. But in 2020, optimize your strategy by breaking down and segmenting your conversion rate. Some ideas for segmentation include: traffic source, device type, new vs. returning visitors, product, and individual campaign. This can give you tremendous insight into what really works.