Are you striving to sell more and build your online presence? The success of your ecommerce store is more than profit but an overall high-performing business that continuously attracts your ideal customer. The more ways you measure your Shopify performance, the more you can make adjustments and set goals to improve your success. Here are some Key Point Indicators (KPIs) to help chart your journey and optimize your online business.
1) Analyze Your Conversions
When you’re building an ecommerce store, your sales conversion rate is among your most important metrics to consider. The conversion rate (CVR) is the number of people who made a purchase out of everyone who visited your website.
Here’s the formula:
CVR = (# of Purchases / # of Sessions) x 100
The 100 at the end of your formula helps you find the percentage for your conversion rate.
Fortunately, Shopify makes it easy by showing your conversion rate inside your analytics dashboard. The goal is a steady conversion rate with spikes during sales, holidays, and popular shopping seasons. If your conversion rates are all over the place, you may need to look at the products you sell, which days they sell best, and if there are any clues in which traffic sources are strongest. For example, you may find your best-selling days come when you post on Tuesday afternoons on Instagram.
2) Average Order Rate
Your average order size (AOV) is also a crucial metric to keep your revenue goals on traffic.
To figure out how to set your goals as a way to measure Shopify performance, use the formula:
AOV = Total Revenue/Total Number of Orders
If your average order size is $50 and you want to rack up $8,000 in monthly sales, you can calculate you will need 160 customers. If you’re falling short of your goal, you may need to spend more on customer acquisition and ads or ramp up your organic SEO efforts to bring in more traffic.
3) Study Your Organic Traffic
Online ads and social media can help earn sales for your online store, but do you know where is your organic traffic coming from? Almost half of all product searches start on Google, making SEO an essential part of your ecommerce business. If you’re getting a trickle of organic traffic, you need an SEO refresh or new strategy to help you command a more significant portion of your search market.
SEO is also crucial if you have a seasonal or niche product requiring a narrow audience to buy your product. When you can’t connect with your ideal customer-base, you’re leaving a gap for your competitors to fill. Read more about how it works with our Xtreme Heaters SEO Case Study: Taking a Seasonal Product with Little Traffic to #1 In Google.
4) Customer Acquisition Costs
Your customer acquisition cost (CAC) offers insights into how much it costs, on average, to earn a new customer. Here’s your formula to figure out the cost involved:
CAC = Amount Spent on Marketing / # of New Customers
The CAC metric directly impacts how much you’ll spend on marketing and advertising. You may find that spending $40 for a customer that purchases $50 of products is worth it, especially if the products you sell are based on a subscription model or attract repeat customers. Of course, you’ll need to determine if your CAC makes sense to your profit. If it costs $15 to produce a custom T-shirt and you’re spending $12 for CAC, you may find the additional time and resources it takes to fulfill the order don’t make sense.
Together, all of these clues in your Shopify performance will help shape what you should actually spend on customer acquisition and how to improve your profit margins.
5) Shopping Cart Abandonment
It’s frustrating to log into your Shopify store and see how many abandoned shopping carts are sitting there, waiting for their owner to come back and complete a purchase. Up to 69.82% of online shopping carts are abandoned, letting valuable revenue slip through your fingers.
The good news is Shopify offers apps and plugins to help turn those abandoned shopping carts into sales. With the right strategy, you can incentivize customers to complete their sales through last-minute coupon codes and free shipping offers to boost your profit.
6) Bounce Rate
Your bounce rate is the percentage of visitors who leave your website after viewing only one page. But it’s more than just a clue for where your customers are getting stuck or leaving; it’s also a valuable signal for Google. Search engines look at your bounce rate and will de-value or de-rank your site if they think audiences aren’t getting value from your website. The higher your bounce rates, the worse your ranking and Shopify performance.
A Shopify expert can help reduce your bounce rate by looking at everything from site speed to mobile optimization. Digital Nomad Designs can audit your site to determine where to improve your bounce rate and overall UX, UI, and conversions to help you launch, build, and scale a more profitable online store.
If you’re new to setting KPIs and measuring your Shopify performance, start with a few ideas from the list, starting with your conversion rates and customer acquisition costs. As you build your store, you’ll get more comfortable using your Shopify analytics panel and making adjustments to determine where to invest in your business.
You can also dramatically reduce the learning curve and shortcut your path to success by investing in a knowledgeable team of Shopify experts. Digital Nomad Designs offers everything from basic website packages to SEO and website maintenance so you can focus on working on your business instead of in it. Book a call to discuss your next project!