Use these 15 ecommerce customer engagement metrics to increase your retention
In the previous posts, we talked about a few omnichannel eCommerce customer engagement strategies. But good marketing does not end with strategies alone, does it?
The next major step is analysing how effective these customer engagement strategies are. Keeping track of your performance with eCommerce customer engagement analytics is of critical importance when it comes to improving customer engagement.
In this post, we will go through the various eCommerce metrics you need to understand if your efforts and strategies are holding up.
Highly engaged customers show better brand loyalty compared to customers that were not engaged properly. No matter the tiny shortcomings your business might have, working towards inspiring loyalty in your customers guarantees their trust in your company.
For this reason, gaining a deeper insight into the functioning of your customer engagement strategies is something that cannot be put off.
These are some of the best customer engagement metrics in eCommerce that should make it to your reporting dashboard:
The average pageview refers to the number of times a particular page got viewed by store visitors on average. This is one of the key metrics you need to have when it comes to understanding the performance and effectiveness of different store pages. By measuring the average pageview, you will be able to understand how often customers visit your website and know how they engage with each page in the store.
Pageviews also can help you know if people browsing through your website are struggling to find the information they are looking for. You can calculate the average pageviews per visit by dividing the total number of pageviews by the total number of visits. That is;
Average page views per visit= Total no. of Pageviews ÷ Total number of Visits
CPA or cost per acquisition is the next key metric that provides valuable info for marketing and sales to both investors and marketers. CPA refers to the money a company needs to spend on acquiring a new customer. Factors like marketing and sales team cost, email campaigning costs, advertising costs, discounts or other costs needed to make a sale and acquire a customer.
You can calculate CPA by dividing the total advertising spending by the total attributed conversions.
A bounce is nothing but a single-page session on your site that didn’t trigger any further action. That is, a visitor arriving and leaving without any other interaction. The bounce rate is the percentage of such single-page sessions where visitors exited after viewing. A higher bounce rate doesn’t mean bad news for all scenarios. For example, for article-based web pages where the whole strategy is to get visitors to view that single page, the effectiveness cannot be measured with bounce rates.
But for pages that are crucial to your sales funnel, like homepages and product category pages, the lower your bounce rates are, the better. Low bounce rates indicate that customers are interested in your products and services and that they get past the first page to explore your store. Higher bounce rates indicate poor user experience and usability, inadequate content and an inability to inspire further interest in customers.
Bounce Rate = (Total visitors to the webpage who left without further interactions ÷ Total visitors to the webpage) x 100
The churn rate, also known as the attrition rate is measured as the percentage of customers lost in a given period. It indicates the highs and lows of a business. Lower the churn rate means you are engaging customers more effectively. Whereas higher churn rates indicate that something is wrong with your customer retention strategies.
Churn rates display the company’s situation, and show if customers are rejecting their usual intent to buy from you. It indicates customer dissatisfaction. It can also give you an overview of your business’s capability in handling this problem. If faced with higher churn rates, brands need to double down on improved customer satisfaction and eCommerce engagement strategies to address the situation.
You can calculate the churn rate by dividing the number of lost customers in a given time by the total number of customers in that period multiplied by a hundred.
Customer retention rate is the percentage of customers returning to your store after completing a product/service purchase. One can say, the retention rate is the opposite of the churn rate. You need to keep track of your retention rate in order to gain a better understanding of the longevity of your eCommerce company.
Higher retention rates indicate better engaged and better-satisfied customers. You can also figure out why customers are returning to you, identify and work on your strong points, and this way, improve growth.
The retention rate can be calculated with the following formula;
Retention Rate = (No. of Active Customers ÷ Total No. of Customers at Start of a Period) × 100
Activity time is the average amount of time a user spends actively on your website or a webpage. This does not include the time when the website was open in a different tab or the amount of time a customer was logged in. When it comes to content like articles or blogs, the more involved the customer is, the more time they would spend there.
But in end-sale funnels, if customers are spending more time than they ought to, this means that the process of moving from the product page to checkout is far longer than necessary. Long winded checkouts make for a poor user experience; hence this needs to be addressed.
Page visit frequency is the measure of the traffic your website receives. It shows how many customers are viewing your pages. Combining it with other metrics like activity time, allows you to understand the effectiveness of your customer engagement strategies.
Higher page frequencies show that your marketing efforts are working and that people are finding their way into your website.
Net promoter score or NPS measures customer trust in your brand’s product or services and shows you how willing they are to recommend your brand to their contacts. This eCommerce engagement metric provides you with insight into customer loyalty and indicates the likeliness of word-of-mouth growth. NPS is a way to understand how your customer service effort is paying off.
NPS is usually measured in surveys, which primarily consist of two major questions besides other usual survey questions. The first question is about rating. On a scale of 0-10, the customer will be asked to rate the company’s products and/or services.
The second question will be open-ended, where the customer is asked to explain why they gave the specific rating to the company’s product or service. By customising these two questions to the specifics of your business, you can have a direct and clear understanding of what the customer thinks about your brand and its products/services.
Abandoned carts are a major cause for losing revenue in eCommerce. The shopping cart abandonment rate measures the percentage of carts that are abandoned by customers without completing the purchase. This is a particularly important metric as it gives you data on the number of customers that intended on buying a product but did not carry through to completing a purchase.
After identifying any increase in cart abandonment rates, brands ought to attempt to understand the causes and come up with viable strategies to improve engagement and recover abandoned cart sales.
The cart abandonment rate can be calculated with this formula;
Cart Abandonment Rate = 1 – (No. of Customers Completing Purchase ÷ No. of Customers Adding Items to Cart) × 100
Conversion rate is one of the most widely used metrics in eCommerce. It refers to the percentage of users that completed an action tied to your company, that you desired they would perform. These actions can differ according to the objectives of your business and will include registering for a newsletter, clicking on social media ads, opting for broadcast updates, downloading your e-books, or even simply viewing a particular product. In a way, it attempts to calculate how often an action or a simple visit from a customer, results in a conversion.
If you are an eCommerce brand, running multiple digital marketing campaigns with omnichannel customer engagement strategies, conversion rates are especially important for you. It allows you to understand the performance of your various channels, and identify which channel and what strategy engages users better.
There is more than one formula to calculate the conversion rate. You can go for a formula based on how you intend to measure the website traffic. Here are the three most common formulas used for calculating conversion rates
Average order value or AOV is the value of an average order made by customers in your store. This metric is something that needs to be improved by proper eCommerce engagement strategies if a brand expects to see growth. You need to understand what stimulates customers to complete purchases or abandon orders.
AOV can be calculated by dividing the total revenue gained by the number of orders your brand received.
Another major eCommerce metric that provides insight into customer engagement, is the gross margin. It refers to the total sales revenue your company retains after the cost of production. That is, gross margin gives you the actual profit gained from each sale.
Better gross margins show better-satisfied customers as customer engagement is proportional to sales. Gross margin can be measured by the following formula;
Gross margin = (Revenue gained – Cost of all Product Sold) ÷ Revenue gained
Customer lifetime value, also called CLTV or CLV, is a predictive measure of total revenue attributed to be gained in the future from a business relationship with a customer. In other words, it’s the money a company is expected to gain from selling to a customer in their future interactions over the customer’s lifetime.
Measuring CLV shows companies how much their customers are likely to spend on average. It can help you identify which of your customers are of higher value. CLV can be measured only after measuring Lifetime Value or LTV.
LTV= Average sale Value x No. of purchases x Retention time period
CLV= LTV x Profit Margin
The Customer Satisfaction Score (CSAT) is the measure of customer satisfaction and the overall customer experience. It helps you understand how likely customers are to be retained because of your customer engagement and satisfaction efforts and indicates the probability of repeat sales.
Usually, surveys are used to measure CSAT and understand customers while monitoring their interests.
CES or customer effort score is a metric that lets you measure how much effort customers are putting into each interaction with your brand. This can be measured using surveys. For example, customers can rate how easy or difficult it was to reach out for service or to complete a particular transaction.
Guaranteeing customer satisfaction and improving customer engagement is of paramount importance for any business to succeed. This makes measuring customer engagement metrics crucial to any brand that aims at enhancing its customer engagement strategies.
Engagement metrics help monitor the performance of your customer engagement strategies in order to actually optimise them and fetch better results.
This is where using an intelligent solution like LimeChat comes into play.
LimeChat offers a detailed analytics dashboard and monitors the performance of your engagement campaigns in real-time. It smartly converts this data into actionable and detailed insights, allowing you to be on top of your strategies efficiently.