4 E-commerce Metrics to Improve Customer Satisfaction ASAP
Written by Toonimo
Our first guest post is by Elena Dobre, content marketer at Marketizator and Conversion Rate Optimization consultant.
Today’s data driven business environment requires a sharp focus on metrics. When it comes to the less measurable aspects of the e-commerce website, such as the customer’s behavior and attitudes towards brands, marketers should pay attention to 4 key metrics.
These metrics are:
- VSI - Visitor Satisfaction Index
- CSI - Customer Satisfaction Index
- CLV - Customer Life Time Value
- NPS - Net Promoter Score
Clearly, metrics that require financial data, such as costs, investments or profits (like the Customer Life Time Value), should also be included in such an analysis, they will be discussed later on in the article.
1. Visitor Satisfaction Index
Until a visitor becomes your customer, you have to run efforts to persuade and eliminate converting barriers, the ones that stop people from placing an order on your website. But how would you know what are the fears of each of your website’s visitors? You can get that knowledge by testing your website with A/B testing or by using online surveys to assess the visitor's satisfaction. I recommend you to combine these two approaches: use surveys to generate hypotheses to test with A/B testing and optimize your website constantly.
At the first visit on a website, almost no one completes an order: 99% of people don’t buy from their first visit, according to See Why’s extensive research. This fact should worry you, certainly, but the majority of these people will return to your website. Make sure to use the first visit to capture the e-mail address by offering vouchers as incentives to subscribe to the newsletter. Micro-conversions have their role in the sales funnel, so make sure to welcome your visitors well and get information about them.
In order to persuade a visitor to convert at his second or third visit on your website, get as much information as you can get about him. An effective tactic to do that is using the on-exit survey. It is clear that once a visitor has the intent to exit the website he will not get back soon. This is the moment to trigger some short questions to get feedback and measure the first impression that someone gets when landing on your website.
Visitor satisfaction index is a scalable measurement of satisfaction with aspects like:
- loading speed
- variety of products
- delivery & returns conditions
VSI can be determined by asking questions like:
- Did you find what you were looking for on our website?
- What is the reason of not placing the order?
- How can we improve your experience next time?
And then use a lead capture to save the visitor’s e-mail address in a database. With Marketizator, you have the option to ask nicely for the e-mail address right after a visitor completed the survey and then to export data in a csv format file.
One tip here: ask open questions. People will answer in a few words, which will give you information to improve the efficiency of your questions. In other words, you will be able to find out the exact information that you need to know for the benefit of your business.
2. Customer Satisfaction Index
We all know that satisfied customers are the key to determine success for almost any type of business. By measuring CSI, you can build a long-term relathionship with customers and transform them into fans.
Customer Satisfaction Index is a scalable measurement of satisfaction with aspects like:
- delivery and shipping
- payment options
- returns policy
Usually, post-order emails are a great source to get information concerning the aspects listed above. People are willing to tell you what to improve, because it’s in their interest to do so. Analyze their answers and adjust your product policy, offers, promotions, prices and services (delivery, shipping, etc.) according to your final conclusions.
CSI can be determined by asking questions like:
On a scale from 1 to 10, how satisfied are you with the following aspects?
- product quality
- delivery time
- shipping costs
What’s your general opinion on our website?
How did the product’s price compare to your expectations?
Do you have any suggestions for us to improve your experience?
Will you return to shop on our website?
Unlike visitors who are prospecting the market to find products to fit their needs, customers are more willing to answer to a few questions. There is no need to use money as an incentive to convince a customer to answer to a few questions; gifts or a rewarding system for loyal customers would work better.
3. Customer Life Time Value
This indicator is a measure of profit. It takes into account the value that one customer brings to your business. It is vital to determine CLV because you will know which traffic sources and behavioral patterns are worth to invest in, in order to remain profitable.
CLV= (Profit per year x Number of years) - Cost of Acquiring Customer
This indicator requires determining some other basic indicators like CAC, the cost of acquiring a new customer. This cost does not include only the product cost, but all of the research, marketing and accessibility costs. To determine CAC, just divide the total acquisition spendings to the total number of customers gained from a marketing campaign.
We all know that it’s more cost effective to keep an existent customer than acquiring a new one. Thus, CLV will predict the economic value that one customer will bring to your business. CLV goes hand in hand with the Net Promoter Score, the last indicator that matters in measuring customer satisfaction.
4. Net Promoter Score
NPS reveals how many customers are willing to recommend you to others. Why is recommendation so vital for an online shop’s long-term profits? It’s the Word of Mouth (WOM) that explains why some businesses increase their sales and brand awareness without investing in advertising.
NPS can be determined by raising the following question to your customers: “From a scale from 1 to 10, how likely are you to recommend our website to your friend?”
The instrument to measure NPS is the online survey. Use a 0 to 10 points rating scale to measure the NPS. (0-not at all likely and 10- extremely likely). After analyzing the answers, you will have to identify 3 groups: Promoters, Passives, Detractors.
Promoters > Score: 9-10
Promoters are very satisfied and loyal customers that will recommend your website to their friends. You can transform these people into brand ambassadors in many ways. For example, with web personalization, you will be more relevant for these customers on-site, whereas, post-order emails will help you to measure satisfaction and to ask for suggestions to improve their experience.
Passives > Score: 7-8
Passives are satisfied customers, but not very enthusiastic about their experience. They will not mention you in their conversations, because they don’t feel like there is something outstanding about your website to share with others. They will more likely talk about you if they dwell because of their potential to become detractors if not treated properly.
Detractors > Score: 0-6
Detractors are unhappy customers who will definitely not recommend your website to others. The best way to go with detractors is to investigate why they had an unpleased experience and then to find a solution to stop the negative WOM to spread over their groups.
For a more accurate precision of your findings and predictions, consider determining all of these 4 e-commerce metrics: CLV will tell you what type of customers are worth to invest in, while CSI and NPS will define the future marketing actions to increase satisfaction and boost your conversion rate and sales.
Elena Dobre is a content marketer at Marketizator and Conversion Rate Optimization consultant. She’s testing different marketing tactics like web personalization and A/B testing. For any questions, suggestions or proposals, get in touch with Elena @HDobre.