Lifetime Value Passes Conversion Rate and Cost per Acquisition as Top eCommerce Statistic
Digital Marketing Trends and What They Mean for Your eCommerce Website
Last week, MediaPost shared some important metrics about eCommerce and what they mean for digital marketing. We’re sharing some of the big takeaways as well as what that means for your business.
96% of Brands Plan to Increase Digital Spend This Year
We all say this one coming after 2020. With the increase in time and money spent online during 2020, we’re going to continue to see that trend grow and it’s important that businesses adapt. Whether it’s building out an eCommerce store or expanding your digital marketing tactics or increasing your ad spend, the growth we are seeing makes sense and it’s important to keep up.
Lifetime Value is Now One of the Most Important KPIs
KPIs are changing. Conversion Rate and Cost per Acquisition used to be #1 & #2. Now it’s LTV. Personally, We’re fans of this shift. New customer acquisition can be tricky and Return on AdSpend might not always be what a client wants it to be - but ROAS (and CPA) doesn’t tell the whole story. If that newly acquired customer is a repeat buyer, or even better, a long-term loyal customer, then even if ROAS on the initial acquisition was lower-than-ideal, it can still be worth it in the long run.
Lifetime Value is also a great way to consider feedback for your business. If your clients are loyally buying from you - that’s a great sign that they like what you sell! Consider loyalty programs to keep their lifetime spend up and keep them happy.
First-Time Shoppers Will Make Up, on Average, 52% of Visitors
As we mentioned - this makes sense with the growing number of users online since they can’t shop how they usually do. This is an important statistic to keep in mind when looking at Conversion Rates. This is because returning users tend to convert at more than double the rate of new users. That means, if you have higher-than-average new users, your conversion rates could be skewed compared to benchmarks if other sites are averaging just 52%, new users.
It’s good to remember that we new visitors and shoppers do mean that your brand is growing and you’re getting exposed to more people than you have.
New Spots for Friction
This article points out that the top 3 friction points for new shoppers are as follows:
- Account Creation,
- Product Search Issues,
- Lack of Product Reviews
We’ve known for a while that forcing users to create an account to checkout is a huge detractor from conversion rates. Guest checkout is a must (most have this, but some don’t), or using a platform like Fast that makes one login for multiple sites. If you really want users to create an account, that process should be as smooth and easy as possible.
Including a product search on your website is really important to make sure users can find what they need, as well as making sure that your products are optimized to be listed in things like Google shopping.
Product reviews come by way of the volume of sales so that comes with time, but automated email followup asking for a review is always a good thing to try to get more reviews. A great platform for something like this is our partner at Yotpo, who has a robust platform that helps gather more real, authentic reviews that can even include photos. Their platform also sends automated emails after a certain number of days since the customer ordered, giving them time to form an opinion on the product!
For the full article, be sure to check out the article by MediaPost.
This post was written by our Paid Digital Strategist Chase Plischke.
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