The shopping cart is where sales are made and revenue is generated. These are the lifeblood of your business, without which, you cannot support future operations. To gain insight into your current performance and where improvements need to be made, you’ll want to focus on revenue per session, average cart value, conversion rates and gross revenue.
By themselves, these metrics don’t provide a complete picture of your business performance. However, when measured together and combined with other KPIs from other parts of your business like customer service, they can tell a story of success or failure and point you toward future improvements.
- Revenue Per Session – Orders tell you that your online store is functioning well to a certain extent, and are an important metric to track. But measuring revenue per session helps track the traffic that flows in and out of your site. This lets you know which parts of your checkout process and shopping cart can be improved to shorten the time to purchase.
- Average Cart Value – This metric is useful for determining the success of your cross-sells and up-sells. It also provides more context for your revenue per session metric and along with gross revenue is useful as a baseline for testing your price points around the world.
- Conversion Rates – Conversion rates tell you what%age of unique visitors to your site become actual paying customers. This metric tells an even deeper story than focusing on paid and unpaid orders.
- Gross Revenue – Gross revenue tells you how much money you’ve earned regardless of your expenses. You may think profit is the be-all and end-all of performance metrics, but while net revenue tells you what’s costing you money, focusing on gross revenue helps identify where money is coming from. This in turn tells you what your strongest and weakest channels are. Similarly, gross revenue provides more context to your performance. For example, if you reach a target goal for conversion rates – that’s good; but if it doesn’t lead to your target revenue goals, your awesome conversion rate doesn’t really help your business. But if you have a lousy conversion rate that hits your revenue goals, you’re in a much better place financially speaking.
Segmenting by Place and Product
When you’re measuring your ecommerce KPIs, make sure that you provide context to your analysis by breaking each data point down by region. What might work well in the U.S. does not work well in Germany so be cognizant of that. Drilling down into your ecommerce KPIs and making regional adjustments also lets you know where your strongest markets are located. If three countries are making up 50% of your revenue, make sure that you are investing the most time and effort into those markets.
If you sell more than one product make sure that you drill down into these ecommerce KPIs according to each product’s path to purchase. Don’t just watch the overall performance of your site. Make sure the path for a B2C product is as successful and as optimized for an individual consumer as the path for your B2B buyer.
Test, Test, Test
As always, testing is the most important part of improving your performance. Testing your shopping cart against the essential ecommerce KPIs helps you understand what is contributing to your success. It teaches you how to create solutions to improve your online shopping cart’s performance. For example, you can test:
- Different button shapes, sizes and placements
- New price points and different prices points in different regions
- In-cart text: Are your customers persuaded to purchase by more or less copy?
- Configurations: Does a multi-step checkout processes generate more revenue than a single step, no review process? Remember that a single step no review checkout process is illegal in a number of important countries like Germany, so make sure you have a tool that is able to exclude certain regions from your tests.
Determine ecommerce KPIs that measure success and combine them together to provide the greatest context into your business performance. Then start testing various elements in your shopping carts and checkout processes to move the needle.