At Hostdedi, we help optimize WordPress, WooCommerce, and Magento sites and stores. We’re thrilled to take that one step further today by partnering with Fast to bring their one-click checkout to thousands of onlines stores hosted on our WordPress and WooCommerce plans.
As the leading high-performance cloud solution built to optimize stores, Hostdedi fully managed WooCommerce hosting is an ideal pairing for Fast’s one-click checkout technology, which is helping today’s online merchants solve the number one problem in ecommerce: shopping cart abandonment.
Fast was created to solve the broken ecommerce checkout process that wastes untold time for consumers and costs merchants billions of dollars in lost sales. It’s the easiest way to buy online and the fastest way for online merchants to increase sales by getting customers through checkout in seconds.
Fast eliminates redundant and time-consuming forms, such as:
Usernames
Passwords
CAPTCHAS
Address
Payment information
And more.
Fewer forms to fill out provides online shoppers with a better user experience — and that seamless one-click transaction results in reduced cart abandonment and improved sales and conversions.
“Cart abandonment is the leading problem in the ecommerce industry — even more so than site speed. Online shoppers get distracted or frustrated with long forms, and they abandon their carts. Fast solves the problem that leads to cart abandonment,” says Chris Lema, Vice President of Product at LiquidWeb, the parent company of Hostdedi.
“Unlike Amazon, which pioneered the one-click checkout, Fast is solving cart abandonment on a larger scale. It can be implemented on any site and platform an online store uses.”
To help you achieve results faster, we’ve highlighted the top ecommerce metrics and KPIs you should measure and how they benefit your online store.
Top 13 Ecommerce Metrics and KPIs To Track
1. Average order value (AOV)
2. Shopping cart abandonment rate (CAR)
3. Customer acquisition cost (CAC)
4. Return on investment (ROI)
5. Add-to-cart rate
6. Website traffic
7. Average session on website
8. Bounce rate
9. Pay-per-click (PPC)
10. Email conversion rate
11. Customer satisfaction score (CSAT)
12. Customer lifetime value (CLV)
13. Customer retention rate
These 13 important metrics fall under three major categories: sales, marketing, and customer service.
Let’s go over each category to see what these metrics are and how they help your ecommerce store.
Category #1: Sales
Keeping an eye on the top ecommerce metrics and KPIs for measuring sales is paramount. After all, they help you decide many aspects surrounding your business.
What Are the KPIs of Ecommerce Sales?
Average Order Value (AOV)
Shopping Cart Abandonment Rate (CAR)
Customer Acquisition Cost (CAC)
Return on Investment (ROI)
Add-to-cart rate
Average Order Value (AOV)
AOV is the average dollar amount a customer spends when they place an order on your website.
Tracking your AOV gives you an insight into shoppers’ behavior and helps you create better pricing and content marketing strategies.
Here’s a simple formula to calculate your AOV:
AOV = Total revenue / Number of orders
Shopping Cart Abandonment Rate (CAR)
This ecommerce metric shows you the percentage number of visitors that added products to carts but didn’t complete their purchase.
Average session on website is another vital ecommerce metric to watch out for. It is the average time a visitor spends on your online store in a single visit.
A high average web session could mean you have great content or that your website usability is excellent.
Here’s how you calculate it:
Av. web session = Total session duration / Total number of the sessions
Bounce Rate
Bounce rate is an ecommerce metric closely related to the average time people spend on your website. After all, the more time people spend on your website, the lower the bounce rate.
Knowing your bounce rate helps you determine the number of visitors that leave your ecommerce website after looking at specific pages.
Here’s how you calculate it:
Bounce Rate = Total number of one-page visits / Total number of entries to a website
Pay-Per-Click (PPC)
PPC lets you see the amount of money you spend every time someone clicks your ads. You can use it for your social media campaigns and search engine marketing (SEM).
Here’s how you can determine if your PPC campaign is working:
PPC = Total advertising cost / Total number of ads clicked
Email List Conversion Rate
Email marketing is an effective way to improve your brand growth.
Ensure that you provide email opt-in to convert first-time website guests into subscribers. Then, send valuable and personalized email campaigns to build trust.
Here’s how to determine it:
Email List Conversion Rate = (Total number of new subscribers - number of unsubscribes) / (Total number of subscribers x 100)
Category #3: Customer Service
Here are the top ecommerce metrics and KPIs to track the quality of your customer service.
Customer Satisfaction (CSAT) Score
This ecommerce metric tells you the number of customers who were satisfied with your products or services — according to their responses in your surveys.
Here’s how to calculate your total score:
CSAT = The addition of all the scores / Total number of respondents
Customer Lifetime Value (CLV)
CLV represents the total sum of money a customer spends as an existing customer of your business. Here’s how you calculate it:
CLV = Total average order x Average number of purchases per year x Average retention time in years
Customer Retention Rate
Customer retention rate measures the percentage of customers your business retains over a specific period.
It gives insights into ways to improve your customer service. Here’s how you calculate it:
Customer Retention Rate = (Total number of customers - Number of new customers) / Number of customers before acquisition
Final Thoughts: Ecommerce Metrics: The Top 13 KPIs To Track
Knowing the top ecommerce metrics and KPIs empowers you to perform effective conversion rate optimization and create a better user experience for existing and potential customers.
The bottom line is to start tracking your ecommerce metrics to know what areas to improve on.
Whether it’s the marketing channels to focus on or the product pages to simplify, follow our guide to find out the top ecommerce metrics to track for maximum success.
Create an intuitive website that supports analysis of the top ecommerce metrics and KPIs with Hostdedi StoreBuilder.
Don’t forget you can also avail of our WooCommerce hosting solutions to ensure your online store offers a top-notch customer experience and enhances customer loyalty.
Get started today with a free two-week trial of fully managed WooCommerce hosting.
Should I buy the shoes I have always bought, or should I check out those new shoes?
Will it be worth it?
Shall I buy that top-reviewed software? Will it pay off?
There are tons of similar questions that customers ask themselves on a daily basis. In the end, most of them end up purchasing nothing.
You can bypass that by providing a stress-free and personalized customer experience.
How?
By starting a subscription business.
You can learn how to start a subscription-based business model and access a larger customer base.
You get your customers as subscribers, which lessens customer acquisition costs, increases customer lifetime value, and provides predictable revenue on a regular basis.
UnivDatos Market Insights forecasts that the global subscription ecommerce market will reach $478.2 billion by 2025. Starting from mere magazines and newspapers, it has expanded to bloggers, entertainment platforms, startups, and websites like Netflix and Amazon.
Read on to learn how to start a subscription-based business.
Subscription Business 101
In a subscription business model, customers receive a product on a regular basis through subscriptions, which get renewed — manually or automatically — at the start of every billing cycle.
Customers looking to cancel their subscription can do so after an agreed period with or without cancellation fees.
By learning how to start a subscription business, you can satisfy the varying and specific needs of a wide range of customers.
Benefits of Subscription Businesses
Starting a subscription business provides several benefits to small business owners.
Three major benefits that should get you to start a subscription business are:
Predictable Revenue
Small and new business owners have a hard time managing their expenses. They never know what they will make in the current month before its end, let alone the revenue for the next month.
Subscription-based business models change that and help in predicting cash flow. Knowing the subscribers you have, you can quickly estimate your revenue.
Lower Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the cost of getting a new customer to buy your product or service. If you spend $300 on ads and win 10 buyers, your CAC will be $30.
Starting a subscription business will lower your CAC by getting you a higher profit from a single acquisition, as retaining an existing customer generates recurring profits.
Higher Customer Lifetime Value (CLV)
By nature, a subscription-based business sells products to its customers for a long time due to convenience and seemingly low costs.
As a result, starting a subscription business not only lowers your CAC but also increases your CLV.
Customer Lifetime Value (CLV) is the total amount of money a buyer spends on your products or services throughout their time as your customer.
Types of Subscription-Based Businesses
There are four common types of subscription-based businesses.
If you’re looking to start a subscription business, you can choose one depending on your industry and your business goals:
Boxes
Many ecommerce businesses have opted for the subscription box business model, in which they deliver a monthly subscription box containing their products to their subscribers.
It is a popular business model among companies selling makeup, food, pet care, and clothing.
Ecommerce
In addition to subscription boxes, some ecommerce businesses offer an open subscription. Customers can specify the products they want and the frequency with which they require it.
Software
Software-as-a-subscription (SaaS) is a popular business model for software companies.
Starting a subscription business as a SaaS involves:
Accessibility
Accessibility is a subscription model that is a blend of software and ecommerce subscriptions.
Entertainment services like Netflix and Amazon Prime use this subscription model to provide access to movies and TV shows and extra shipping benefits, respectively.
Steps in Starting a Subscription Business
Here are the major steps to start a subscription-based business.
1. Develop Your Business Idea
Every great business starts off as an idea.
For subscription-style businesses, start by:
Selecting a niche — Choose a target audience and the product you want to sell to that audience.
Market research — Research your customers and competitors.
Product sourcing — Decide how you will get the product.
Subscription type — Select the type of subscription.
Marketing strategy — Develop a marketing strategy that fits your needs.
2. Adopt a Pricing Strategy
Based on your market research, check out the pricing strategy that fits your business.
If you are selling a one-of-a-kind product, opt for a price skimming pricing strategy. In contrast, a freemium model suits you if you are a SaaS company.
3. Build a Website
When your marketing strategies succeed and attract several potential customers, you want your website to be ready to showcase your offers. It will help you to start a subscription business effectively.
While building a functional website generally takes a while, Hostdedi’s WP QuickStart for membership sites is an efficient solution to help you create a custom subscription business website in minutes.
4. Plan Out Inventory and Logistics
If you are sending physical products or subscription boxes, you should ensure that you:
Source high-quality products from trusted suppliers.
Get branded labels to customize your boxes.
Streamline and track customer requests from order to fulfillment.
Add shipping costs that customers are willing to pay.
Deliver products on time and without damage.
5. Market Your Subscription
A major part of starting a subscription-based business is persistent marketing.
To get new customers for your own subscription box business, you need an effective marketing strategy to promote your offers from pre-launch to post-launch.
You can use marketing tactics like influencer marketing, social media, and content marketing to get a successful subscription box business.
6. Keep an Eye on Churn
Customer churn accounts for the customers who stop using your product or service in a specific time period.
Retaining your customers after starting a subscription business is crucial for your business growth.
Monitor subscription cancellations and unravel why customers are opting out. A high churn rate may be a result of credit card issues or economic changes.
Take steps to improve your subscription service and reduce churn.
Final Thoughts: 6 Steps to Starting a Subscription Business
With the ever-changing business landscape, starting a subscription business offers a relatively stable and predictable source of income.
Follow our six simple steps on how to start a subscription-based business and have a bite of the growing subscription-based economy.
Build a fast, functional site that supports your subscription business in minutes. Get started with WPQuickStart for membership sites.
