If you are about to lead marketing, these 4 KPIs are essential when launching e-commerce:
Are you able to quantify what it costs you to acquire a new customer? This is vital for monitoring the profitability of your business. Measuring it is as simple as dividing your marketing budget by the number of customers acquired. The real challenge lies in estimating it and forecasting it during planning. If you’re not sure how to do this, ask me: there are free tools that can help you calculate it very accurately.
How can I increase my customers’ average consumption? Unfortunately, it is common to encounter these questions after launching an e-commerce site. Neuromarketing concepts applied to #CrossSelling and #UpSelling are very useful. Even more so if they are taken into account during planning. But one thing that should never be overlooked is having a reward system in place.
So, what are the first practical steps to doing this well?
What is the expected value of potential revenue represented by a new buyer?
The main mistake we make when evaluating the profitability of a digital business is to cross-reference the CPA with the ticket. It must be clear that a buyer’s life cycle does not end with the first purchase, and therefore, the return on investment should not be measured until the end.
By understanding the purchase frequency associated with each product, we can first estimate and then measure the average consumption value of a buyer throughout their life cycle. The great news is that we have a second variable at our disposal to increase e-commerce revenue, apart from the ticket: extending the customer’s life cycle (which leads us to include in our loyalty strategy not only a good reward system, but also constant improvement in the customer experience).
How profitable is my digital investment? We know that ROI is the ratio between LTV and CPA, which tells us directly how to improve it:
– By increasing LTV (we have already explored how)
– By reducing CPA, for which there are optimization techniques on the one hand, and channeling strategies such as affiliate marketing on the other.
