3 KPIs to turn the COVID-19 crisis into an opportunity
The coronavirus pandemic has impacted nearly every business in some way. Brick-and-mortar retail stores are struggling to remain open to serve their communities while also keeping shelves stocked with food and goods. As a result, Ecommerce businesses have seen a significant spike in sales and the number of online buyers, fulfilling the cliche that when life gives you lemons, make a lemonade! So now it’s more important than ever for Ecommerce businesses to measure performance. In this article, we will outline three primary Key Performance Indicators (KPIs) that Ecommerce businesses should be tracking to monitor performance and thrive in these uncertain times.
1. Average Order Value (AOV)
The AOV is an essential KPI for Ecommerce businesses because it allows them to monitor specific merchandise performance related to customer orders. When customers increase the number of items or products in their carts, this contributes to the overall AOV.
Why Is AOV Important?
AOV provides Ecommerce businesses and decision-makers with insights into specific customer buyer patterns, advertising spend habits, and even product-related performance and pricing. For example, AdScale helps Ecommerce stores to create carousel ads with products that frequently bought together, based on their store order history. This alone helps to increase the average AOV.
2. Return Customer Rate
This metric measures the ratio of buyers who complete an initial purchase and those who return for a second or third purchase.
Why Is the Return Customer Rate Important?
Monitoring the return customer rate allows an Ecommerce business to see the overall customer retention level. In fact, the average order purchased from a return customer is 30 percent higher than that of new customers. Furthermore, the acquisition cost is much lower than acquiring new customers, which increases overall customer lifetime value (LTV). AdScale can increase the return customer rate for your website by retargeting past customers and creating dedicated sales offers for returning customers.
3. Repeat Customer Order Frequency
This metric measures the frequency and likelihood a customer will return to make another purchase. The goal is to reduce the purchase frequency of the returning customer.
Why Is the Repeat Customer Order Frequency Important?
As we mentioned in the point above, studies have shown that it is more cost-effective for Ecommerce businesses to market to repeat customers than first-time visitors. AdScale allows Ecommerce businesses to create dedicated sales offers for returning customers. This level of dedicated advertising directed to existing customers tells them when certain products are in high demand or are running low on stock, which encourages them to make another purchase.
How AdScale Helped Braxley Bands
After its initial launch in 2017, Braxley Bands quickly outgrew its current processes and couldn’t invest the time and resources to manage its advertising efforts efficiently. Braxley Bands turned to AdScale to help automate its advertising efforts. Braxley Bands also used the above three primary KPIs to measure overall performance of its online store. As a result, Braxley Bands was able to overcome the challenges brought on by the coronavirus pandemic while also boosting their ROAS to 685%! For Ecommerce businesses that are struggling to keep up with the increased demand of online shoppers, or just stay on track during the global crisis, AdScale just might be the solution for you.