Understanding your sales data is important for running a successful ecommerce operation. While profits may be an overall indicator of success, there are several other key performance indicators (KPIs) you should be watching. Individually, these KPIs have limited usefulness. But when combined, they can be great for laying out strategies to grow your ecommerce business.
Conversion rates: A conversion can mean multiple things, depending on the website. But essentially, a conversion is when a customer completes an action that you want them to – such as making a purchase or signing up for your marketing emails. Being aware of your conversion rates can help you measure the success of business efforts, like email campaigns, advertising, social media promotions, etc. With this knowledge, you can put your focus on efforts that are shown to be effective.
Revenue per Session: Watching your overall order volume can tell you how well your ecommerce site is performing, but that may only account for a small amount of your site activity. Narrowing that data into revenue per session can help you better understand the traffic flowing in and out of your site – presenting you with opportunities to improve areas that aren’t generating as much revenue as they could (for example, improving your checkout process to reduce cart abandonment).
Average Order Value: Your average order value closely aligns with your conversion rates and revenue per session and helps you better contextualize that data. Furthermore, it is a great indicator for how successful your upselling and cross-selling strategies are.