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B2B Ecommerce Metrics: All You Need to Know About Them

Jun 21, 2022  |  Sharjeel Ashraf

While everyone is moving towards digital business, it is important to understand how digital business works. For those who are starting a digital business for the first time and don’t have any idea about it, this blog is for them.

Let’s get started and learn all about digital metrics that are used to measure the success rate of any business.

Why are Metrics Important?

Metrics are ways to measure the success or the failure of any business/project. We use metrics all the time in business. For example, if we have a brick and mortar store our metrics will be:

  • Daily footfall
  • Daily order volume
  • Daily average profit
  • Average price per order

There are many other metrics that we will use for our business but these are the most generic ones. These metrics help us give an idea if our business is successful or not. If our business is not successful, we can use the metrics to make improvements to the store.

For example, if the average order price is not leading to better profits, then we can change the order price. This will impact the overall business strategy. This is just a minor example of how metrics work and why they are so important for any business.

Why are Ecommerce Metrics Important?

Similar to the example of a brick and mortar store, an ecommerce store also needs to measure the profitability that it gets by doing business. This is measured by the number of conversions (orders) and obviously margins for selling each product to the users.

Ecommerce metrics are relevant for anyone who is linked to the ecommerce market in one way or the other. Most of these ecommerce metrics are highly relevant and the rest are just a way to measure the completion rate of tasks.

How to Measure B2b Ecommerce Metrics?

There are various ways to measure different metrics of ecommerce. We use Google Analytics, HotJar, PayPal, and various other ecommerce associated tools to measure various b2b ecommerce metrics that can help us see where our ecommerce store stands on the internet. 

Google Analytics allows you to measure the website traffic, bounce rate, and average time on page. Similarly, HotJar allows you to measure the conversion rate through Heat maps and Scroll maps.

Finally, PayPal allows you to directly measure the conversion rate or the order volume of the website.

Top B2b Ecommerce Metrics That You Should Know About

Now that we have an idea about how b2b ecommerce metrics are measured through tools, let’s see what are the top metrics to measure.

  1. Conversion Rate

First in our list is the total conversion rate of the product. This is further drilled down into paid and organic conversion rates that we will be discussing later on in the article. Conversion rate is the number of conversions in a specific period, usually a month or a year.

If you have 1 conversion for 100 visits to your online store, that will be a 1% conversion rate.

Formula: Conversion/visitors *100

  1. Customer Acquisition Cost (CAC)

Customer acquisition cost (CAC) is the total cost of acquiring each customer in a specific period of time. A customer can make multiple purchases (conversions) so a customer acquisition cost would be different from the conversion cost.

Moreover, the customer acquisition cost focuses on 

Budgeting is a part and parcel of every B2B enterprise’s activity, so it should only be natural to also compute the CAC. This is the division of costs spent on acquiring more customers (marketing or associated expenses) by the number of customers acquired in a particular period.

  1. Customer Retention Rate

The customer retention rate of an ecommerce store is the number of customers that return back to the store to order products again. Customer retention rate can be calculated with the following formula:

Retention Rate = ((E-N)/S) x 100.

E: Number of customers at the end of the period

N: Number of customers acquired during the period

S: Number of customers at the start of the period

Customer retention rate is an important metric for an ecommerce store as it helps it measure the overall traffic and the conversions of the store.

  1. Cart Abandonment Rate

Cart Abandonment Rate is the number of visitors that added products to their cart but left them mid-way. It is estimated that around 60 percent of people will abandon a cart on a website.

Cart abandonment rate = (total orders/total visitors)*100

If your visitors are leaving your website, then there is a fair chance that they have a better deal available. Find out what are the reasons for cart abandonment and then fix them one by one to improve the conversion volume.

  1. Customer Lifetime Value

Customer Lifetime Value is the time a customer spends with your product. It is a metric used by SaaS products or subscription based ecommerce stores.

Consider this: If a person keeps buying your product for two years, then the customer lifetime value will be two years at max. 

Customer lifetime value is an important metric for businesses where the business model focuses on subscription. Take website hosting. A website hosting company will want to sell hosting for cheap because it can acquire more customers this way. The more customers a hosting company has, the more it will be able to earn from them.

This is also called the recurring revenue.

  1. Refund Rate

Another important metric that dilutes the ecommerce revenue is the refund rate. Think about it. If your customers are filing for a refund, then you are giving back their money. This is not just fruitful for you but it will also lead to additional time wastage.

Here is a simple formula to improve the refund rate of your website:

Refund rate: (Number of refunds/total order volume) * 100

  1. Average Order Volume

Next is the average order volume. Average order volume is all about the number of orders you can get in a time period. It is usually measured on a per day, per week, or a per month basis. Average order volume tells a lot about the velocity and the health of an ecommerce store. If store owners want to improve their business, then the best way is all about increasing AOV.

  1. Average Price Per Order

Another important factor to look at for your ecommerce store is the average price per order. Average price per order tells about the total price of the order in a given time period.

If you received three orders in a week.

The first order price was $10.

The second order price was $12.

The third order price was $15.

The total order price of the order would be: $12.3

Bottom-line: B2b Ecommerce Metrics Explained In Detail

You need to make sure that your average order price is high. Because that is the only way you can make more from your ecommerce store.

These are some of the best ecommerce metrics that you should focus on for your ecommerce store. If you have any questions about these ecommerce b2b metrics and would like to know more about them, then comment below.

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