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Ecommerce Metrics : 3 Core Metrics for Revenue Growth

Ecommerce Metrics


Hello! 😀 I’m Dasom Park, the Data Analyst (DA) for Datarize.


Datarize has introduced a new webpage titled 'Core Metrics’. This page allows users to simultaneously view metrics such as the number of sessions, Purchase Conversion Rates (CVR), and Average Revenue Per Paying User (ARPPU) for their ecommerce store. Today, we'd like to explain the reasoning behind creating this new page and the type of support it provides.


Why Ecommerce Metrics Matter?

When driving, it's essential to monitor your dashboard in a vehicle. The dashboard provides critical information and plays a key role by displaying warning lights to alert the driver of any problems. Ignoring these indicators could lead to potential issues or even accidents. (Of course, you might still reach your destination safely if you're lucky.)

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Core Metrics serve the same purpose as a dashboard in a vehicle. Consider Core Metrics as the dashboard that offers you crucial information needed to achieve the ultimate goal of increasing 'Revenue'. However, for those unfamiliar with analyzing such indicators, this task can seem daunting. To tackle this challenge, we at Datarize have developed a 'Core Metrics' page to simplify the analysis of e-commerce indicators.


3 Ecommerce Metrics that Needs Your Attention The Most

We can agree that the primary metric in e-commerce is 'revenue', correct? Revenue is determined by the number of visitors to the site, the number of sessions, the actual ratio of sessions resulting in a purchase (Purchase Conversion Rate, CVR), and the price of the products purchased (Average Revenue Per Paying User, ARPPU). We will provide a detailed example.

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In the scenario where there are 100,000 sessions with a 10% Purchase Conversion Rate (CVR), and the Average Revenue Per Paying User (ARPPU) significantly influences Revenue. The same Purchase CVR and ARPPU, but with a different number of sessions, can greatly affect Revenue. These three indicators are essential for achieving a specific 'Revenue' target in e-commerce.


Datarize’s Core Metrics Curated for Ecommerce

Datarize’s Core Metrics exhibit 3 distinct characteristics for ‘Simplicity in Analytics’.

  1. You can assess your ecommerce site's performance with these 3 metrics: number of Sessions, Purchase Conversion Rate (CVR), and ARPPU within 30 seconds.
  2. Rather than providing a general diagnosis, you can pinpoint the exact issue.
  3. It offers suggestions on how to enhance the performance of underperforming areas.


How to Increase your Ecommerce Revenue Utilizing Core Metrics.

We will illustrate how to utilize Datarize's Core Metrics, which embody the three characteristics mentioned above. Before we start, it's important to acknowledge that Core Metrics are crucial for understanding Revenue. Therefore, if there is a decline in Revenue, these indicators should be your first point of examination. Identifying the problematic aspect and understanding its cause is essential to devising an accurate solution. Review the 'Core Metrics' and consider implementing suitable actions for these three scenarios


Case 1: If the Session Count decreases.

_레퍼런스는 여기에 정리해주세요 (2)1. When there’s a decrease in new visits among the sessions.

Assess whether there has been a change in marketing strategies aimed at attracting new users. Marketing significantly influences session counts and is deeply connected with attracting traffic. Subsequently, consider increasing exposure for content that has demonstrated high click rates across your advertising channels.

2. If there's a decrease in repeat visits among the sessions.

Verify whether there have been changes in retargeting marketing strategies for repeat visitors, or if any CRM initiatives have been implemented to encourage customers to make repeat visits. Attracting repeat visitors is generally more cost-effective than acquiring new users. If your advertising budget is restricted, maintaining a steady flow of repeat visit sessions becomes paramount. Continue to implement CRM marketing strategies for both repeat visitors and loyal customers.

Case 2: When there has been a decrease in the Purchase Conversion Rate (CVR).

구매전환율 (2)1. When there is a decline in the overall Purchase Conversion Rate.
Identify which stage of the journey has encountered a decline, through Funnel Analysis. (Essential E-commerce Funnel Analysis Methods You Need to Know) Understanding this is crucial for funnel analytics in e-commerce. Addressing stages with a decline in Conversion Rate (CVR) is imperative. Typically, a decline in CVR is commonly linked to alterations in UX/UI design or policies that are related to the declining stage. The following three examples are the most illustrative of such cases.

  • Moving the 'Add to Cart' button or the 'Pay' button of the checkout page.
  • Raise in the minimum purchase amount for 'free shipping', e.g. from $30 to $50. 
  • Changes in the landing page for an advertisement.
2. When there is a decline in the Purchase CVR in new visitors

Review the influx of new visitors and the Purchase Conversion Rate (CVR) on the "Onboarding" page for each advertising channel. Increasing the proportion of the advertising channel that shows superior performance in these two indicators will naturally lead to an increase in the Purchase CVR for new visitors. It's important to note that most new visitors typically have a lower Purchase CVR compared to repeat visitors, who have already had a positive experience on our site. Nevertheless, new visitors often exhibit a higher acquisition rate than repeat visitors. Therefore, enhancing the Purchase CVR for new visitors can be an effective strategy for boosting revenue.
Second, consider evaluating the landing page and the advertising content that attracted the highest number of new visitors. Often, new visitors leave because the advertisement aroused their interest, but the landing page did not fully meet their expectations. Try improving the consistency of your message to encourage purchasing intent.
Third, consider showcasing products that have a high click rate on their thumbnails and a high Purchase Conversion Rate (CVR) on the landing page linked to the advertisement. Products that are popular among existing customers may also appeal to new visitors. You can identify which products meet these criteria by visiting the 'Products' page.

3. When there is a drop in Purchase CVR for repeat visits.

Customers can be classified into three distinct categories.
First, for repeat visitors who have not yet become members, consider displaying the on-site popups to them. These visitors are individuals who have shown interest in a product during a previous visit but hesitate to make a purchase, often due to the price. Offer them incentives such as coupons, discounts, or additional benefits to encourage them to complete a purchase.
Second, for members who have already completed a purchase, consider sending a CRM message. Utilize information about products in which the customer previously expressed interest to tailor your message. This approach could persuade them to reconsider making another purchase.
Third, for customers acquired through advertising, analyze which channel they used to visit our site. There will be repeat visitors who returned because of advertising. As highlighted in our second point, identify the channel with the highest Purchase Conversion Rate (CVR) and a significant ratio of repeat visitors, then prioritize optimizing advertising for that segment.


Case 3️ : What if the ARPPU drops?

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1. When the entire average revenue per paying user (ARPPU) has decreased
Check for any recent increases in events, coupon distribution, or the issuance and usage of points. Indiscriminately offering benefits could lead to a decrease in Average Revenue Per Paying User (ARPPU).

2. When there’s a drop in ARPPU for new visitors.

Examine whether events and marketing efforts targeting new visitors have been actively conducted. You can increase the Average Revenue Per Paying User (ARPPU) by offering incentives such as free gifts, rewards, and free shipping. It is essential to develop a strategy that takes into account the ARPPU of products sold on our site.

3. When there’s a drop in repeat visitor ARPPU
Consider implementing two types of strategies. First, create a cross-selling strategy. Recommend products in which the customer has shown interest, or products that complement what they have already purchased. Utilize the data previously collected to make these recommendations. The 'Related Products' page can provide useful insights for this approach.
Second, consider devising a strategy that incentivizes customers to make multiple purchases simultaneously. For clothing, offer a set of outfits; for groceries, provide a discount based on the number of products purchased or create a bundle to encourage larger purchases.


Today, we've discussed strategies that can boost your revenue through the use of Core Metrics. Now, you shouldn't struggle to navigate with the dashboard, ensuring you reach your destination swiftly.  When facing revenue challenges, we hope you'll consult the Core Metrics and swiftly implement a solution. In our next post, we'll explore how to utilize Detailed Indicators, including Cohorts and User Segments. We'll continue sharing helpful insights that simplify e-commerce data analysis and support your business's growth.

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