5 Pillars to protect your Brand whilst maximising online sales


An eGuide explaining the five key Metrics that Brands should be collecting, monitoring and analysing.



The sheer volume of data can seem overwhelming, but the most useful information can be found in five key metrics:

1. Conversion Rate

2. Funnel abandonment rate

3. Lifetime value of a customer

4. Percentage of returning customers

5. Average Order Value



Conversion Rate

Tackling low conversion rates

Factors impacting your conversion rate and what you can do about them:

Conversion rates are a fragile creatures that can be affected by any number of factors from site speed, layout and even colours. For eCommerce brands, every second counts. Literally every additional fragment of a second a page takes to load means losing customers. A 1-second delay could cost a brand making $100,000 per day on its site $2.5 million in lost sales every year. The good news is that simple tweaks can make a significant impact on a site’s speed. Every site is different so having an expert do a thorough analysis is best, but to get you started:

  • Eliminate plugins that drag down load times
  • Choose native apps and functionality
  • Compress large image and video files
  • Take advantage of browser caching to speed up loading of CSS files

Systemic issues such as site speed aside, conversion rates are also directly impacted by the user’s experience on a site. Again, analysis of drop off points (funnel abandonment or bounce rate) in conjunction with conversion rate can help to pinpoint specific steps or phases in the buying process that aren’t working. This is where regular A/B testing plays such an important role. Test everything from font size and style and headlines to images and intuitive tap zones for mobile users. Real-time metrics will show immediately what affect these changes are having on conversion rates and which changes should be widely implemented. Good eCommerce platforms typically perform A/B testing and can automatically optimise a site based on testing results.

“Granular insight can lead to wholesale changes”

The continuous assessment of a conversion rate, including granular data like product and channel conversion rates, can also aid effective stock management, product design and channel development. Monitoring the conversion rate of specific products gives brands detailed insight into how popular the product is and how fast it’s selling.

This real-time data can be used to shape inventory management and determine optimal stock reorder points in order to avoid stockouts.


Examining channel conversion rates gives brands a clear picture of where their customers are originating from. This is invaluable data that can shape future investment; a brand is investing heavily in Google AdWords and see significant traffic as a result, however, despite less traffic, customers coming via Facebook Ads typically make more purchases. Armed with data like this brands can adjust their spending accordingly to focus on more effective channels.



Funnel Abandonment Rate

Funnel abandonment rates allow brands to understand at what points customers are exiting the sales funnel.

We’re all familiar with conversion rate, arguably the most frustrating statistic any brand will see. And it is typically high: according to the Baymard Institute, cart abandonment rates for online stores vary between 60-80%, depending on the sector.


But cart abandonment rate only tells half of the story. What about the customers who dropped out of the sales funnel before they reached the cart? This metric is called the funnel abandonment rate and it allows brands to understand at what points customers are exiting the sales funnel.

In many cases, it won’t be clear why a customer abandoned their online shopping cart, or why they dropped out of the sales funnel at a particular page.

General industry consensus suggests that the top reason for cart abandonment is unexpectedly high shipping costs.

Customers with lower value orders are more likely to abandon their carts if shipping is high: the lower the order value the higher the shipping fee can seem in comparison. Taking this into account, brands should take steps to be clear about the full price (including shipping and any other fees) as early as possible in the buying process.

How to react to funnel abandonment trends

So what can brands do by tracking their cart abandonment rate?

Using this benchmark figure as a starting point brands can experiment with A/B or split testing, that is making tweaks and monitoring the effects of those changes. While it’s not always possible to reduce shipping fees, brands can reduce the burden on customers who make lower value purchases.




Lifetime Value of a Customer

As any brand knows, it costs more to acquire a new customer than to retain an existing one.

That’s why the lifetime value of a customer (or customer lifetime value) metric is so critical to understand. It is a prediction of the net profit ascribed to a brand’s entire future relationship with a customer. It gives brands a clear picture of how valuable individual customers are to their business and how valuable they will continue to be in the future.

In calculating the lifetime value of a customer brands need to determine the value of purchases a customer has made in the past and combine that with the predictive value of purchases they will make in the future. This second figure is always going to be an approximate one but by accurately tracking not just historic transactions but also specific customer behaviour brands can get close to a precise figure.

Accurately calculating the lifetime value of a customer gives brands that clearer picture of how much they can spend on customer relationship building and marketing. Although the cost of acquiring a customer in the beginning might seem high, developing that customer into a loyal, returning customer has a positive impact on the lifetime value and gives brands more financial freedom to invest in marketing and product development.


By monitoring the purchase history of a customer over time a brand can more accurately deduce the time between up upgrades and use that data to ramp up their online advertising and marketing campaigns.

According to RJ Metrics, after one year, the top 10% of customers are worth six times the industry average and the top 1 % are worth almost 18 times more. These figures prove the worth of investing in developing those lifetime customers and gaining their loyalty. The lifetime value of a customer is not set in stone. There is the potential to change it. For example, a customer may be acquired via a marketplace but with clever marketing or exclusive offers they could be re-directed to higher margin channels or enticed to increase their average order value.



% of Returning Customers

Follow up communications should be a staple for every eCommerce Brand

As the cost of acquiring new customers continues to rise and consumer loyalty becomes ever more elusive brands cannot afford to underestimate the value of returning customers.

According to RJ Metrics, just under a third (32%) of customers make a second purchase in their first year as a customer. In fact, 69% of a customer’s first-year spend happens in their first 30 days as a customer. Brands should consider this short time frame as the crucial time during which they can win customers’ loyalty.

Monitoring this sub-metric of percentage of customers returning within 30 days could throw up some actionable insight for brands who could set re-marketing targets that focus specifically on that time frame. By continuously monitoring this figure, brands can see if their follow-on efforts are paying off, or not. 

Specific offers customised to the customer’s purchase can be used to encourage a return visit.

Free shipping if they complete a purchase within 30 days or a discount on a complementary product or accessory. Follow-me ads using re-targeted software can remind customers of items they looked at but didn’t purchase, perhaps offering an incentive like free shipping or a product discount.




Average Order Value

The average order value, which is also known as the average basket or cart value, is a vital metric to keep track of. It is calculated by dividing total revenue by the total number of orders.


The figure is of best use for brands looking to establish a benchmark for their customer behaviour, i.e. how much they typically spend on a site per visit. While this figure doesn’t offer the insight of how much profit/margin is being made per visit it does provide intelligence that can guide future pricing strategies and sales and marketing efforts. Once a brand knows their average order value they can continue to monitor it, checking for peaks and troughs and getting to understand the change in behaviour. Having this benchmark means brands can more easily identify surges in spending and can then combine that data with other metrics – conversion rates, product conversion rates, cart abandonment rates – to determine the reason.


Continuous monitoring of the data in the five key metrics will enable brands to respond to changes and trends in behaviour.


About Luzern

Luzern is a leading ecommerce platform and related services provider. We are experts in delivering innovative strategies for Amazon Marketplaces and for Direct to Consumer webstores. Luzern is proven to dramatically grow online revenues for brands across the globe and is trusted by Philips, Fossil, JDE coffee, Petsafe, Gatorade and Nestle.

With the Luzern platform, brands receive real time alerts and triggers enabling them to actively manage and control sales margins, position against competitors, and drive conversions across multiple channels.

For more information contact our expert team and find out how Luzern can accelerate your eCommerce strategy.