10+ Conversion Metrics & Business KPIs to Track in 2022 (Explained)

10+ Conversion Metrics & Business KPIs to Track in 2020

Ecommerce moves fast and every year, it seems like there are constantly new metrics to keep tabs on and new “breakthrough” hacks to use in order to get those coveted conversions.

If you’re tired of trying to keep up with the “hottest trends” and sick of feeling lost in the sauce, this article is for you.

This article will help you zero in on the proven metrics that are actually worth your time and effort in 2022. Let’s jump in! 

How often should I check my conversion metrics?

The short answer is that you’ve got to find a balance.

Checking conversion metrics too frequently can lead you to make a rash decision based on a short period of time, and if you don’t check frequently, then you don’t have a pulse on your business.

With that being said, here are a few things to keep in mind when deciding how often to check conversion metrics:

  • Seasonality (Christmas, Black Friday, and other big events during the year can affect your conversion metrics dramatically.) 
  • Data Volatility (Some metrics can change on a week to week basis while others are pretty steady. Think about the most important metrics in your business and keep the focus on those.) 
  • Ability to take action (How quickly can you act on your insights? Do you have the resources/permissions to implement changes rapidly? Is it even worth it to take quick action?)
  • Length of the sales cycle (Customer buying journeys differ from business to business. Think about yours and give yourself a realistic timeline to gather enough data to see if a change is affecting the bottom line.) 

Speaking of metrics, you should make it a habit to review the metrics that matter the most to your business on a regular basis. Every year (at least), take stock of the metrics that really moved the needle in your business the previous.

Understand what mattered and what was … well, a waste of time to track. 

To help you head into 2022 with more clarity and focus, here are the top metrics to keep track of: 

1. Interactions per visit

What is it? 

This metric determines the behavior of users on your site and how that affects your conversions. Are users leaving comments on your blog? Are they spending a particular amount of time on certain product pages? This helps you get a better idea of the type of interactions users are having with your site so that you can influence behavior in your favor. 

Why is it important? 

Tracking these interactions puts you in the driver’s seat. You can influence user behavior because you’ve studied and understood what type of content they like, where they spend the most amount of time on your website, what type of content generates shares and reviews, etc. 

How to track? 

One of the best tools to track Interactions per visit is Crazy Egg. This tool helps you improve your website by showing you what’s working, what isn’t, and what you should try.

How to improve it? 

The more you increase interactions that lead to purchases, the better. Take note of the elements on your website that make users interact and keep improving those elements. Tools like Crazy Egg and HotJar help you visualize those interactions and improve on them. 

2. Leads generated

What is it? 

This metric defines those who are interested in your products/services and show that interest by the actions they take on your site. 

Why is it important? 

Usually, before a customer becomes a customer, they were a lead. They were a prospect interested in your products and with the right push, they became a customer. Not every lead will become a customer and that’s why it’s important to properly track where the lead came from and their likelihood of buying. 

How to track? 

There’s a wealth of tools out there to help you track leads generated and to dissect those leads to granular levels so that you can only target those who are the most interested aka the most likely to buy! Leadfeeder, Prospect.io, Clickfunnels, Unbounce, and Hubspot are some of the leaders in tracking leads generated. 

How to improve it? 

Using the tools mentioned above, you can see the percentage of how many leads turned into conversions. The higher that percentage is, the better your conversion rate! Keep note of the channels that are generating the best leads and invest more in them. 

3. New visitor conversion rate

What is it? 

The old adage “first impressions are everything” also applies in eCommerce. This metric calculates how many new visitors become customers. 

Why is it important? 

You only have a few seconds to grab a visitor’s attention when they land on your website and if you’re not sending the right message, you’ll lose them. 

Make sure that your first impression is clear, useful, and valuable to the new visitor and it’ll be the gift that keeps on giving! 

How to track it? 

Google Analytics is one of the best tools for tracking new visitor conversion rate. Here’s a handy guide on using GA to track new visitor conversion rate. 

How to improve it? 

Isolate this metric from loyal or returning customers conversion rates. Understand what they’re interested in when they first visit your website and use that insight to improve the experience.

4. Returning visitors conversion rate

What is it?

Put simply, this is a key loyalty metric. It measures how many visitors came back and turned into customers. 

Why is it important? 

Return visitors conversion rate gives you a good idea of whether your content, marketing, and retargeting efforts are working. 

How to track it? 

Google Analytics is probably the best tool for tracking return rate conversions as well as understanding the general path to conversion. Here’s a good resource to learn about tracking this metric. 

How to improve it? 

Ask yourself the following questions: 1) Why did that person return? and 2) Did they convert the first time around? If not, how can you convert them the next time they visit? Digging into this will help make the conversion process easier. 

5. Cost per acquisition

What is it? 

This metric is the cost of convincing a potential customer to buy a product or service.

Why is it important? 

It’s a fundamental metric because it directly measures the revenue impact of marketing efforts.

How to track it? 

In Google Analytics, divide marketing expenses by the total number of customers to get the Cost Per Acquisition number. Keep an eye on this figure and regularly track to make sure that marketing efforts are having a positive impact on your bottom line. 

How to improve it? 

Compare your session values with your top traffic channels to see the quality of traffic per channel as well as which channel led to the most customers. For more ways to improve this metric, head over here

6. Average order value

What is it? 

Average Order value tells you the average value of an eCommerce transaction. In layman’s terms, it tells you, on average, how much revenue an order brings in. 

Why is it important? 

This metric can help you understand your customer’s spending habits. When you know this information, you can identify opportunities to upsell, downsell, and create tailored offers to them. 

How to track it? 

To track Average Order Value, divide total revenue by the total number of orders. 

How to improve it?

Certain techniques to use to improve your Average Order Value include offering free shipping for orders above a certain $$, offer certain discounts, use live chat, and offer financing for high ticket items. You can find other ideas to experiment with here

7. Customer retention rate

What is it? 

Customer Retention Rate helps you understand how happy you’re making your customers and how good you are in keeping them as customers. It’s another essential loyalty metric that you definitely want to focus on.  

Why is it important? 

Customer retention is on average 7x less expensive and a faster process than customer acquisition. Customers are the lifeblood of any business, therefore, it is paramount to know how happy they are with you (and quickly implement the necessary changes, if need be).  

How to track it? 

There are three pieces of information you need to calculate customer retention:

1) Number of customers at the end of a period (E)

2) Number of new customers acquired during that period (N)

3) Number of customers at the start of that period (S)

When you have this info, here’s the simple calculation to get the percentage: 

Customer Retention Rate = ((E-N)/S)*100

How to improve it? 

Some effective strategies in keeping customers include using customer accounts, improving customer service (especially when it comes to feedback channels), running a loyalty program, and improving your email outreach. Get inspired by other powerful retention strategies here. 

8. Lifetime value

What is it? 

Lifetime Value aka Customer Lifetime Value measures the value that a customer will contribute to your business over the span of their “lifetime” (this lifetime, usually measured by months, varies depending on industry).

Lifetime Value is probably the single most important metric for measuring gross profit and success over time. 

Why is it important? 

This metric can help you find a balance between customer retention and acquisition. When you can calculate at what point a customer becomes profitable, you can then confidently allocate the right budget for a particular marketing channel. 

How to track it? 

To track Lifetime Value, you divide the lifetime customer revenue by the total lifetime customer costs. Here’s an excellent article on measuring Lifetime Value. 

How to improve it?  

To increase your customer lifetime value, you can increase order frequency, increase the customer lifespan, increase average order value, and develop a subscription payment model. For more battle-tested techniques, check out this article. 

9. ROI

What is it? 

Return on Investment aka ROI shows the profit generated by a specific marketing action. 

Why is it important? 

When you know which marketing and advertising channels are the most profitable, you can double down on those and get rid of the ones that are not performing well. 

How to track it? 

Return on Investment is often expressed as a percentage. To get this percentage, you would subtract the “cost of the investment” from the “total gain on investment” and then divide by the “cost of the investment.

How to improve it? 

There’s no shortage of ways to improve ROI on particular campaigns or on a general target like boosting traffic for example. A few ROI boosting ideas that work wonders in eCommerce include optimizing product pages, using landing pages as sponsored content, creating product guides, using guest blogging, and dabbling with user-generated content. 

10. Bounce rate

What is it? 

Bounce Rate refers to the percentage of people who leave your site immediately after arriving. 

Why is it important? 

If consumers are leaving, that means they aren’t buying. If users are arriving on your site and leave within seconds, there’s a grave problem. Knowing your bounce rates can help you quickly implement fixes that are favorable to conversions. 

How to track it? 

To discover your bounce rate, divide the number of people who leave your site without taking a single click by the total number of visitors. 

How to improve it?

Optimizing your product pages, properly segmenting your email list, making the user experience as smooth as possible, and being transparent are just some of the best ways to reduce your bounce rate. You can check out some other techniques here

11. Exit pages/Exit Rates

What is it? 

Often confused with Bounce Rate, Exit Pages/Exit Rates refer to the pages a user was on when they left your site after viewing more than one page. This figure is often represented with a percentage. 

Why is it important? 

A high exit rate usually means problems in your conversion funnel. Remember this where they’re dropping off. When your exit rate is high on a particular product page, it usually means that there’s something on that page putting your users off.

In short, exit pages show you where you need to optimize.

How to track it? 

Google Analytics is the best tool to help you figure out your exit rate. Here’s a detailed guide to see your exit rate. The general rule is, the lower the exit rate, the better. 

How to improve it? 

To lower your exit rate, you can use exit intent popups and tailored messaging, perform A/B test on product pages, and use exit surveys to collect valuable customer feedback.

Conclusion

There you have it! We’ve covered the top 11 metrics to focus on going into 2022.

From Interactions per visit to Bounce Rate, you’re armed with a laser-sharp focus and a trusty guide to cut through the “conversion congestion” and only worry about the metrics that affect your bottom line.

Let us know metrics you found surprising on this list below. 👇

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