Ecommerce analytics, the backbone of data driven decisions for online sellers, play a pivotal role in optimizing your business performance. Analytics empower you to identify customer behavior patterns, measure marketing effectiveness, improve conversion rates and maximize revenue.
But what are these ecommerce analytics metrics and how do they enable online sellers to make data driven decisions? We'll explore key metrics like average order value, customer lifetime value, customer acquisition cost, churn rate, approval rate and decline recovery rates.
Let's start with AOV. It's not just a number, but a window into your customer's purchasing habits. Understanding AOV allows you to strategize on upselling and cross selling to increase revenue per order.
Next up, CLTV. This metric estimates the total revenue generated by a customer throughout their entire relationship with your business. It guides decisions on customer retention and acquisition strategies and helps identify high value customers for personalized retention programs.
Then customer acquisition cost, commonly referred to as CAC. This measures the cost of acquiring a new customer, including marketing and advertising investments. Evaluating CAC allows you to optimize marketing budgets and strategies.
Churn rate is another critical metric. It determines the rate at which customers stop engaging with your business, highlighting potential retention issues. Reducing churn is vital for increasing customer loyalty.
And let's not forget declined recovery rates, which provide insights into payment efficiency and revenue optimization.