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Your online store's analytics dashboard is a goldmine of insights and opportunities — if you know what to look for. While conversion rates and website traffic offer a useful snapshot of customer engagement and reach, they’re just the tip of the iceberg when it comes to metrics for measuring online success.
Let’s dive into how to measure business success. Keep in mind that each business’s goals are unique, so consider these key performance indicators (KPIs) as guides, not absolute benchmarks.
Navigating your online business performance without paying attention to analytics is like sailing without a compass — you may stay afloat, but you'll lack a map for where to go next.
E-commerce performance metrics offer a window into the effectiveness of your business tactics, guiding informed decisions for strategic adjustments. For example, a deep dive into conversion rates can reveal strengths and weaknesses in user experience or marketing approaches, while tracking customer lifetime value (CLV) can influence long-term customer engagement plans.
To measure your small business analytics with more precision, consider leveraging tools like those offered by PayPal that feature a comprehensive view of performance, helping you to better optimize your business operations.
With so many potential online sales metrics to track, knowing which ones truly reflect your business's health and growth potential is key.
From website traffic to online engagement, here are some business performance metrics where success manifests most clearly online.
Traffic metrics help decode where your visitors are from, whether it's organic search, social media, or paid campaigns. They also pinpoint which channels are most effective for your business.
Another important metric in this category is device usage data, which reveals if your audience primarily uses mobile or desktop. Analyzing landing page performance is also essential, as it shows which pages effectively attract visitors and which ones may need improvements.
User engagement metrics shed light on how visitors interact with your website. By tracking metrics like clicks and scrolls, you can fine-tune your site to create more engaging and user-friendly experiences, encouraging longer visits and more interactions.
Some common KPIs include:
Remember that you should consult legal counsel to help determine whether or how to disclose your use of engagement metrics to your website visitors and to help you understand compliance with privacy and other laws relating to consumer privacy.
Think of sales and revenue metrics as the pulse check of your online business's health.
You’ve probably heard of a few — conversion rate measures the effectiveness of your site in transforming visitors into customers, while cart abandonment rate reveals missed opportunities. Meanwhile, customer acquisition cost (CAC) calculates the cost of attracting each new shopper to your digital storefront.
One way to help improve sales and revenue metrics is to utilize tools that make the checkout process easier for consumers. PayPal Complete Payments, for example, gives customers a range of ways to pay, including PayPal, Venmo, ApplePay, and the option to Pay Later through PayPal. The tool also lets customers save preferred payment methods for even easier repeat purchases. As an additional upside to your business, money from sales made through PayPal Complete Payments settles into your PayPal business account in as little as minutes, so you can handle business expenses and other needs quickly. Discover how PayPal’s checkout solutions can help you drive conversions and address other e-commerce challenges.
Conversion rates are a popular KPI for a good reason: They directly reflect how effective your website and marketing strategies are at transforming visitors into customers.
As of November 2023, the average online business conversion rate is 2.27%.1 If yours is lower, it may be a sign to reassess and refine your website's user experience and marketing approach.
One way to improve conversion rates is to remove friction from checkout. One study commissioned by PayPal and conducted by Nielsen found that, on average, PayPal bolsters checkout conversions by 46% for small-to-medium businesses compared to other payment methods.2 This figure skyrockets to 110% for electronics merchants and 174% for clothing and fashion merchants.3
How much does it cost for your business to acquire a new customer? This number — known as customer acquisition cost (CAC) — measures the efficiency of your marketing strategies, including ads and sales efforts.
For e-commerce businesses, the average CAC ranges from $53 to $91.4 While this figure fluctuates depending on industry, it’s still a valuable benchmark for gauging your business’s spending efficiency.
To lower customer acquisition costs, consider these strategies:
Beyond the above key sales KPIs to monitor, consider these additional metrics for more insights:
Knowing how to track business performance is a cornerstone for informed decision-making. Consider leveraging tools like Google Analytics to track business sales performance or CRM software to measure customer engagement data.
Then, adopt a strategic approach of testing, analyzing, and tweaking. Tactics such as A/B testing for marketing campaigns, regular reviews of customer feedback, and staying up-to-date with market trends can help turn data into actionable insights and next steps.
Learn how PayPal can help you gather and leverage the data and analytics you need to run and better understand your business.
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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