Crunching the numbers: three key metrics
From purchase history, to browsing behavior and demographics, eCommerce companies generate enormous amounts of data on their customers.
By analyzing this data, companies can gain insights into their customers’ preferences, which in turn helps them improve their marketing strategies, make data-driven decisions and personalize the customer experience.
For eCommerce businesses, there are several key metrics underpinning customer satisfaction and, ultimately, profitability. Here are the three main ones: Cart Abandonment Rate, Average Conversion Rate, and the Average Order Value.
1. The Cart Abandonment Rate (CAR) measures the percentage of online visitors who add items to their online shopping cart but do not complete the checkout process.
2. The Average Conversion Rate (ACR) measures the percentage of total visitors that end up taking a desired action, such as purchasing a product or subscribing to a newsletter.
3. The Average Order Value (AOV), as the name suggests, refers to the average price of products purchased on a website. It is calculated by dividing the total revenue generated by the total number of orders.