By the year 2040, more than 95% of all purchases will be through eCommerce. This is why as early as now, various brands and companies are already pushing the limits of user engagement to establish their brand in the long haul.

The definition of user engagement varies for all industries. To narrow it down, this article will mainly focus on user engagement within eCommerce websites' bounds.

User engagement is quantifiable through Key Performance Indicators (KPIs) and is highly correlated with a brand's revenue and profitability. When users find value in a website, product, or service, they are more likely to buy or avail and spread the word to their families and friends.

Good news for small businesses, the most effective form of advertising is free: word of mouth. In a study conducted by Nielsen, it is found that 92% of all consumers trust recommendations from peers and family members.

Through customer engagement, consumers would be able to relate to a brand at the emotional level that will result in long-term relationships.

Metrics to Measure

Now to calculate user engagement, brand owners must decide on which KPIs to measure. To help you out, we have listed our recommendations.

1. Conversion Rate

Conversion rate is the percentage of visitors who completed an action your website aims them to, like signing up for a mailing list or completing a purchase. Low conversion rates may be caused by multiple factors, such as the product and service price, lack of information, or mediocre website design.

Check this out: 20 Outstanding Niche-Based Websites

Average conversion rates may vary slightly across industries, but it comes in at 1.85% for most of eCommerce. That's 185 conversions per 10,000 unique visitors. Imagine if you can raise that to at least 4%, which would mean doubling your ROI (return on investment).

Conversion Rate = (Number of Conversion ÷ Number of Unique Visitors) x 100

2. Average Order Value

AOV is the number of dollars a customer spends on each transaction. Say, for a month, your catered to 100 orders and generated $3,000; your AOV is $30. As one of the most essential metrics to take a good look at, AOV directly reflects consumer's behaviors towards a brand. To raise this metric, business owners can try creating bundles of products, gentle upselling, or free shipping for customers who spend at least a certain amount of money.

Average Order Value = Total Revenue ÷ Number of Orders

3. Retention Rate

Retention rate is the percentage of shopping customers that also shopped 6-12 months ago. As the age-old proverb goes: a bird in the hand is worth two in the bush. Customers familiar (and happy) with a brand generate between 3 to 7 times revenue than a first-time visitor.

According to this study, increasing your retention rate by just 5% would push your profits by 25-95%. This is why a lot of brands roll out their own versions of loyalty programs.

Retention rate can be calculated by dividing the number of customers who purchased in the last rolling year that also shopped within the past 6 months by the number of customers who shopped in the last rolling year.

Retention Rate = Active Repeat Customers (From Start of the time period) ÷ Total Number of Customers (From Start of Time Period)

4. Cost per Acquisition

Another important metric to monitor is the cost per acquisition of a customer. This will give a clear indication of how much a business must spend to get a single conversion. The lesser a company spends on each acquisition, the more effective and efficient its engagement tactics are.

Say a business spends $100 on email campaigns, Facebook advertising, and discount offers and closes 15 purchases. We will simply divide the total marketing budget by the number of actual conversions or purchases. 100 ÷ 15 = $6.67 per acquisition.

Cost per Acquisition = Total Marketing Spendings ÷ Total Number of Conversions

5. Cart Abandonment Rate

This metric is perhaps the hallmark of an almost successful engagement. When dealing with cart abandonment rates, business owners must consider many factors such as the price, clarity of product and pricing, other fees, and shipping time, among many others.

Suppose a website generated 100 transactions, and products were added to shopping carts 400 times. In that case, we will subtract 100/400 from 1 and then multiply the result by 100%. This will yield the cart abandonment rate, which is 75%.

Cart Abandonment Rate = 1 - (number of transactions ÷ number of carts created) x 100%

Get Your Game Face On!

Now that we know how to put things into perspective, it is time to develop a game plan to raise your user engagement to its full potential. Below is a list of important aspects of a business or website to take a closer look at. They are listed in no particular order.

1. First Impressions Last

In the internet landscape, design trends continually claim to be timeless. But, like anything in life, the only constant thing is change.

Your visuals serve as your website's eye-magnet. Poor design may result in a high bounce rate -- the percentage of people clicking into your site and then exiting immediately without further engagement. This, in turn, directly and negatively affects your conversion rates.

Designing a breathable yet intuitive website requires a deep understanding of what your consumer niche finds pleasant. Like any business decision, changes necessitate research.

A/B Testing

One way to yield the best results for an optimal website design is to implement the A/B Testing. It is done through tweaking minimal changes to a website to determine which elements produce higher engagement with your visitors. This may include changing the calls to action, button colors, and even content style. Once you know (through data) which ones work most efficiently, then your website can be at its best possible version.

2. Impart Value

As human beings, we have an instinct to only pay attention to things that we could benefit from. We know a waste of time when we see it. Once we feel like a piece of information is not needed, we flick a switch in our brains to block it out. This is where valuable content finds its strength. When visitors profit from the information they consume on your website, they are more likely to be converted into paying customers, social media sharers, or email sign-ups.

One of the best ways to impart value to your visitors is through evergreen content. You can learn more about evergreen content through this article: What is Evergreen Content? How does it relate to Thought Leadership?

3. Clarity is King

Attractive website design, compelling discount offers, and valuable content will not be enough to get that sale when your engaged customer cannot find the 'Order Now' button.

IKEA, one of the largest furniture retailers, takes navigation to a whole new level. Their stores are laid out to make a path for their customers to see all of their products. Their showrooms look like real kitchens, bedrooms, and living rooms to show their products actual value. Not only that, IKEA's guided pathways make customers a bit more mentally passive and more receptive to suggestions.

Once your website can replicate this through proper product arrangement, easy customer service, accessibility options, and overall smooth navigation, your website's engagement may shoot through the roof.

4. Call to Action

The standard for great calls to action may vary across industries. Still, we know that an effective one can be explosive in terms of user engagement and overall revenue. To help you come up with a killer CTA, here are three tips you may use as a checklist when writing those one-line converters.

Use FOMO to Your Advantage: Over the years, more and more people have developed a fear of missing out (hence the term 'FOMO') on things other people enjoy. When you have a chance to leverage on this emotion, your call to action could pound hearts. Examples are: "Join the fab!", "Thousands are already enjoying. . .", "Check out what our customers have to say."

Provoke Enthusiasm: Just pulling facial muscles to curve our lips to smile may actually elicit positive emotions, according to this study. If you can make your visitors smile through your calls to action, they could be more open to clicking on your suggestions. Examples include: "Had fun reading this blog? We've got a lot more!" and "Ready to boost your sales? Get our free newsletter!"

Explain Benefits: The word 'free' pops up in most calls to action. Want to know why? Because we love getting free stuff. When used properly (and not in a pushy manner), freebies can surely get you that sale. Take a look at these examples: "Sign up for our newsletter and get a free [something] on your next order!" and "Get 1 month of premium subscription on us after signing up for our free newsletter."

5. Brand Retention

The 80/20 principle, also known as Pareto's Law, posits that 80% of your revenue will come from 20% of your customers. To get this 20% to continue purchasing or availing of your services, you must establish your brand to be a household name, at least for these customers. This can be done through engaging emails. But the real challenge is to get one-time customers to buy again.

Making repeat customers can be similar to maintaining a relationship. It's always give and take. One way to give to your customers and, at the same time, get them to buy again is through second purchase discounts. Of course, this needs great calls to action, so formulating one is necessary.

6. Reinforce Trust

Clear product descriptions are powerful to close a sale, but they cannot compare to good reviews. Did you know that 63% of all customers are more inclined to buy a product from a website that has reviews? Also, reviews cause an average raise of 18% to overall sales.

When designing your eCommerce website, perhaps you should consider adding review tabs and encourage your visitors to read what your customers have to say.

Final Thoughts

High user engagement is a result of the factors we have discussed working hand-in-hand. Lifting user engagement statistics for your website may take weeks, months, or even years without proper planning and execution.

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