What is E-Metrics?
E-metrics or E-commerce metrics is the collection, processing, and reporting of statistics and performance measures to describe the use, users, and uses of electronic and networked information services and resources.
E-metrics encompasses strategies and processes for gathering data on online businesses such as site traffic or customer retention rates. This data can be used to measure areas such as acquisition (when a prospective customer takes an overt action expressing interest), conversion (turning a prospect into a customer through a sale or sign-up), retention (keeping existing customers), or loyalty (number of page views). Additionally, e-metrics can include traditional business measures like cycle time or inventory management as well as technical measurements like transaction speed. Web marketing measurements focus on acquiring/retaining customers by tracking page views/return visits/duration of visits etc.
E- Metrics can be classified into two types: qualitative and quantitative.
- Qualitative metrics: measures aspects such as customer satisfaction, website usability, and product performance. These types of metrics provide insights into how customers are interacting with a company's products or services, but they do not provide numerical values that can be compared over time. Examples of qualitative e-commerce metrics include customer feedback surveys and customer satisfaction scores.
- Quantitative metrics: provides numbers that can be used to track progress or performance over time. These types of measurements are typically more objective than qualitative ones since they measure specific aspects in a numerical manner. Common quantitative e-metrics include conversion rate (the percentage of website visitors who make a purchase), average order value (AV0), cart abandonment rate, and traffic sources.
History of E-metrics
The history of e-metrics can be traced back to the early 1990s when the World Wide Web (WWW) was just beginning to gain popularity. At this time, there was a need for a standardized way to measure web usage and user statistics in order to understand how people were interacting with online content. In 1993, Tim Cole of the University of Southampton coined the term “e-metrics” in his paper entitled “Measuring Use of Electronic Information Services: An Overview”. This paper provided an overview of different types of e-metric measurements and laid out some basic principles for measuring web usage.
In 1998, Tim Cole founded EML Inc., which later became known as EMLG Inc., a global leader in providing analytics services related to web usage measurement and reporting. This company helped further develop the field of e-metrics by creating new metrics that were specifically tailored toward measuring online activity.
In 2003, IFLA launched its Statistics and Evaluation Section with the aim of promoting the effective use of statistics within libraries and information centers worldwide. This section has since become an important resource for those looking for information on best practices when it comes to gathering data about library users or resources used within libraries
How to Track e-Commerce metrics?
- Step 1: Set short and long-term goals
- Identify your short-term goals. These should be related to the day-to-day activities of your e-commerce store and should help you financially realize your long-term goals. For example, consider tracking metrics such as impressions, clicks, conversions, and average order value to measure how well your marketing campaigns are performing in terms of generating sales leads.
- Define long-term goals for tracking e-commerce metrics that will help you scale up the business and grow it systematically over time (e.g., increase website traffic by 15% each month).
- Create a strategy for measuring these metrics consistently over time so that you can track progress towards both short and long-term goals regularly in order to adjust tactics if necessary. For example, if one of your short-term goals is increasing website traffic by 15% each month then one way to measure this would be through Google Analytics which provides detailed reports on impressions, clicks, conversions, etc. By tracking these metrics consistently over time you can monitor progress towards achieving this goal while also adjusting tactics if needed.
- Step 2: Establish the time period: It is important to establish a time period for tracking e-commerce metrics so that you can measure how your strategies are performing over time and compare them to your analytic averages. This will help you understand where you are now and where you are aiming to be, as well as the impact service updates and upgrades have on your site. Setting clear time parameters allows you to track progress accurately and make informed decisions about future strategy implementation.
- Step 3: Choose parameters for high-converting call-to-action buttons: The parameters for high-converting call-to-action buttons for e-commerce tracking include:
- Clear and concise wording that appeals to the target audience.
- A visually appealing design that stands out from the rest of the page.
- A large button size that is easy to click on.
- A clear link to take a specific action, such as “Shop Now” or “Learn More”.
- Step 4: Choose e-commerce analytics tools: There are a variety of e-commerce analytics tools available, such as web analytics, customer relationship management (CRM) systems, price optimization tools, and traffic analysis software. Each tool offers different features and benefits depending on the needs of your business. It is important to evaluate each tool based on its features and costs in order to find the best fit for your business.
- Step 5: Set up an e-commerce metrics dashboard
- Identify the Key Performance Indicators (KPIs) and metrics to track for your e-commerce business. These should be aligned with your overall goals and make it easy to see the status of online sales.
- Create a dashboard that includes financial metrics (revenue, profits, costs, etc.) as well as website traffic measurements (average order value, customer acquisition cost, etc.).
- Select an e-commerce platform or software that has built-in reporting capabilities so you can easily track these metrics over time.
- Monitor changes in trends over time by comparing data from different periods or seasons if necessary in order to make informed decisions about future strategies or tactics related to online sales activities.
- Step 6: Create a conversion strategy
- Set up conversion funnels: Create a clear understanding of your conversion funnels, including the number of people who made a purchase and the total number of people who accessed your website.
- Analyze data: Review the data from both sides to understand what is working well and what needs improvement in order to optimize conversions for maximum impact.
- Identify opportunities: Identify opportunities that can be explored, such as improving website design/layout or offering discounts/special offers to increase sales conversions.
- Implement changes: Once you have identified opportunities for improvement, implement changes that will help increase conversion rates such as updating product descriptions or adding more images to enhance customer experience on your website.
- Step 7: Optimize landing pages based on Google Analytics data
- Log in to Google Analytics and select the website you want to optimize.
- Navigate to the “Behavior” section of your analytics dashboard and look for pages with a high Bounce Rate. These are pages that visitors have landed on but quickly left without engaging further with your website or purchasing any products/services.
- Analyze the data further by checking out which keywords brought these visitors to your page, what their demographics are (age, gender, etc.), what country they're from, etc., in order to gain insight into why they’re leaving so quickly after visiting this page and how you can improve it or tweak certain elements for better conversion rates down the line.
- Once you've identified which pages need optimization, look at other metrics such as “Time on Page” or “Average Session Duration” as well as Conversion Rates associated with each page; this will give you a better idea of how successful each page is at driving conversions compared to others on your website (and allow you to track progress over time).
- Use this information in combination with user feedback gathered through surveys or interviews in order to make changes that will lead to higher conversion rates while still maintaining
- Step 8: Monitor traffic sources and locations: Monitoring traffic sources and locations can help with tracking e-commerce metrics because it provides insight into which marketing channels are the most popular for your business and which need some TLC. It also allows you to measure the amount of traffic coming from each source and identify low-performing sources that may need more attention. By monitoring these metrics, you can better understand how different channels affect your e-commerce sales, conversions, abandonment rates, and ROI. You can then adjust your strategies accordingly to maximize the success of your campaigns while minimizing wasted resources on low performers.
- Step 9: Monitor email opt-in rates and other relevant metrics: Monitoring email opt-in rates can help with e-commerce metrics by providing insight into customer behavior and preferences. It allows you to understand which segments are most engaged with your brand, what content is most effective at driving conversions, and how to optimize your campaigns for maximum ROI. By tracking these metrics regularly, you can identify opportunities to increase long-term customer loyalty through more personalized engagement strategies such as segmented campaigns or loyalty programs. Additionally, understanding which CTAs are most effective at driving conversions will help optimize future email campaigns for maximum impact.
- Step 10: Monitor shopping cart abandonment rates
- Measure your Cart Abandonment Rate regularly to track progress over time.
- Keep track of the number of customers who add items to their online cart but do not make a purchase.
- For example, you can measure this by tracking how many visitors add items to their cart and then leave without making a purchase or how many visitors added items but did not return later on in the day/week/month/year (etc).
- To improve your Cart Abandonment Rate, consider implementing strategies such as being fully transparent about additional costs at checkout (shipping costs, transaction fees, etc.), providing guest checkout options if possible, utilizing trust badges to increase customer confidence and trust in your brand or product offerings, offering multiple payment options for convenience, etc.
- Step 11: Monitor customer acquisition costs, customer lifetime value, and other relevant metrics: Monitoring customer acquisition costs, customer lifetime value, and other relevant metrics can help track e-commerce metrics by providing insight into which promotional campaigns are generating revenue without compromising the budget. By analyzing these metrics for each channel, you can determine which campaigns are generating revenue while maintaining a low CAC. Additionally, tracking these metrics can help you understand how successful your efforts are in terms of customer retention rates, lifetime value, and more.
- Step 12: Compare online and in-store conversions rates
- Step 13: identify top products by units sold
- Identify the products that are in the highest demand within your business's customer market.
- Track the number of people who made a purchase on your website and divide that number by the total number of people who accessed your website.
- Multiply this number by 100 to get your conversion rate, which is an important e-commerce metric to measure success.
- Compare this conversion rate with in-store conversion rates to get an overall picture of how well both channels are performing and adjust strategies accordingly if necessary (e.g., promotions). For example, if you have identified that product X is in high demand within your customer market and has a conversion rate of 15%, then you can compare this figure with other products or channels that have lower or higher conversion rates (e.g., 10% for product Y). This allows you to identify areas for improvement or success so that you can adjust strategies accordingly (e..g., promotions).
Types of E-Metrics
The most important e-commerce metrics
- Conversion Rate: Conversion rate is the percentage of visitors to a website who perform a desired action, such as making a purchase. It is an important metric for e-commerce businesses because it helps them measure how effective their marketing strategies are at converting visitors into customers. Having a high conversion rate can be beneficial for e-commerce businesses in several ways. First, it allows them to convert more of their current visitors which is more cost-effective than acquiring new ones. Second, it generates more revenue at the same cost since companies are already paying in some way to acquire traffic to their website through PPC ads or email campaigns, etc.. Finally, optimizing for conversion rate helps businesses optimize their customer experience by understanding what drives conversions better and improving on that element of the website or app experience.
- Shopping Cart Abandonment: Shopping cart abandonment is the rate at which customers add products to their online cart but do not make a purchase. It helps measure e-commerce success by showing how many customers are abandoning their carts and how many successful website conversions are being made. By measuring your Cart Abandonment Rate, you can take steps to reduce the number of shoppers who abandon their carts and increase the number of successful website conversions. You should be fully transparent about additional costs at checkout (shipping costs, transaction fees, etc.), create a smooth customer experience between your e-commerce store and the checkout process, offer guest checkouts for convenience, utilize trust badges to improve customer confidence/trust in your brand/products/services, etc., offer multiple payment options for easier conversions, etc., all of which will help reduce abandoned carts over time while increasing successful website conversions overall.
- Conversion Funnel: The conversion funnel is a sales process that tracks the progress of potential customers as they move through different stages of making a purchase. It consists of four main stages: discovery, acquisition, conversion, and advocacy. The purpose of this metric is to help companies understand how their customers are moving through the sales "funnel" and identify any issues that may be leading prospects to exit before completing a purchase. It is important for e-commerce companies to track and evaluate conversion funnel metrics because it gives them insight into how well their marketing efforts are working and where improvements can be made in order to increase conversions. By tracking these metrics regularly, businesses can adjust their strategies in order to optimize conversions while also understanding which tactics work best with their target audience. This information will help them plan more effective campaigns in the future that lead to more successful purchases from their website or app.
- Website Traffic: Website traffic is the number of visitors to a website. It is important for e-commerce because it contributes to the conversion rate or the percentage of visitors who make a purchase. The source of your traffic is also important as it can indicate which marketing channels are most effective for your business. For example, if most of your visitors come from search engine results, then you may want to focus on SEO strategies. Having an understanding of where your website's visitors are coming from can help you make better marketing decisions and allocate resources effectively. For example, if most of your website visits are coming from social media platforms, then you may want to increase spending on these channels in order to boost visitor numbers further. Conversely, if most visits are coming from email newsletters then this could indicate that more targeted campaigns need to be implemented in order for them to be successful in converting customers into buyers.
- Social Media Metrics: The social media metrics for e-commerce include: click-through rate, referrals, social conversions, customer advocacy metrics, likes per post (includes "likes" on Facebook, Twitter, and LinkedIn), shares per post (includes shares on Facebook and LinkedIn), retweets on Twitter.
- Email Marketing: The key metrics for email marketing include:
- Email Opt-In Rate – The percentage of people who have opted into your email list.
- Open Rate – The percentage of emails opened by recipients.
- Click-Through Rate (CTR) – The number of times people click on links within an email campaign.
- Conversion Rate – The percentage of visitors who take a specific action after viewing an email campaign (e.g., make a purchase).
- ROI – Return on Investment, which is calculated by dividing the revenue generated by an email campaign by the cost of running it (e.g., costs associated with creating and sending).
- Website E-Commerce Conversion Rate: The e-commerce conversion rate is the percentage of website visitors who become customers. It is calculated by dividing the number of conversions achieved in a specific time frame by the number of visitors to your website and multiplying by 100. It's one of the most important metrics for e-commerce businesses to monitor because it highlights how efficient you are at transforming clicks and site visitors into sales. A positive conversion rate falls somewhere between 2-4% on average, but it can vary depending on the industry. To calculate your website's conversion rate, you need to understand what factors may be impacting its efficiency (for example: streamlining checkout processes, improving the loading speed of product pages, etc.) Then you can take action to drive improvement in these areas or experiment with new strategies to improve results.
- Email Marketing Campaigns: The key metrics for email marketing campaigns include:
- Email Opt-In Rate – The percentage of website visitors who have opted in to receive emails from your business.
- Conversion Rate – The percentage of people who open an email and take action, such as signing up for a newsletter or purchasing a product or service associated with the email campaign.
- Open Rate – The number of emails that are opened by recipients within a given period of time (e.g., per day). This metric helps marketers understand how many people are viewing their messages and engaging with them on a regular basis via email inboxes or mobile devices/apps with push notifications enabled.
- Clickthrough Rate (CTR) - The number of times someone clicks on an advertisement link within an email message compared to the total number of times that particular ad was displayed (clickthrough rate = clicks/impressions).
- Customer Acquisition Costs: Customer acquisition cost (CAC) is the sum of your total sales and marketing costs for a specified period, divided by the total number of new customers acquired. It includes email marketing, paid search, social media campaigns, and any other investments made to increase the number of visitors and conversions on your site. The main reason businesses have to spend money on customer acquisition is that competition in e-commerce is growing increasingly fierce. In order to stand out from the crowd, brands need to invest in advertising campaigns or other initiatives that will bring in more leads or customers than they would be able to attract organically. As a result of spending more money on customer acquisition than selling to existing customers, businesses can quickly find themselves out of business due to high costs outweighing gains. Tracking CAC allows businesses to determine if their investment in sales and marketing efforts is paying off by giving them an accurate ROI measurement based on how much it costs them for website traffic as well as how many customers they have overall.
- Customer Lifetime Value: Customer lifetime value (CLV) is the total revenue you could expect from a single customer throughout their lifetime or at least the duration of their relationship with your business. It varies depending on the industry and product, but it helps you understand how valuable each customer is to your business. The CLV metric is important for e-commerce because it serves as a benchmark for how much you can spend to acquire customers and how long they should remain loyal in order for it to be worthwhile. Knowing your CLV can help you determine what products have the highest profit potential, adjust pricing strategies accordingly, and allocate resources toward customer acquisition campaigns that will be most profitable for your business in the long run.