Monday, March 21, 2022

How do you rate the performance of your eCom application?

Churn - outflow

Churn shows the percentage of users who made one purchase in your app and never returned to it. High churn is one of the main reasons why your business's LTV may be low. Repeat sales are always cheaper than acquiring new customers, so it's important to control churn and work to reduce it.


The information that you get with these metrics will help your business solve many problems: from choosing a marketing strategy to evaluating the effectiveness of the application itself. And the analytics systems AppMetrica, Google Analytics, Flurry or Mixpanel will help you calculate all the necessary data and make it more visual.


Of course, our list is not exhaustive. There are about ten more metrics that you may find useful, but it depends on the specifics of your application. Write in the comments how you track the effectiveness of your project and what indicators help you understand that you are on the right track.

How to track repeat sales

CRR (cost revenue ratio, or efficiency ratio) - customer retention indicator

CRR shows the ratio between how much you spend and how much you get. To calculate, divide the cost of marketing costs by the total revenue. The lower the CRR, the more successful the business.


P.S. By swapping the numerator and denominator, you will get a different indicator - ROAS (return of advertising spent) - the return on advertising costs. It should be above 100% - then it will be possible to say that your marketing campaign is working.


LTV (customer lifetime value)

LTV shows the total amount of money that the buyer spends for the entire time that he remains your client - this is his "lifetime" value. There are different ways to calculate LTV. One of the simplest: we multiply the average check of the client by his average number of orders for a certain period (month or year) and by the average retention time for the same period.


It is important to consider this metric in comparison with CAC - the cost of customer acquisition, because you need to earn more from your customers than you spend on attracting them. The difference between these indicators should be large enough so that the profit is not only enough to cover current operating expenses.

How do you rate the performance of your eCom application?

Churn - outflow Churn shows the percentage of users who made one purchase in your app and never returned to it. High churn is one of the mai...