Customers For Life: LTV Is Now The Top Ecommerce Metric, Study Shows

Ecommerce brands are heading into 2021 with bigger budgets — and a rejiggered set of priorities.

A staggering 96% plan to grow their digital spend this year, with 49% planning to increase it from 10% to 20%, and 25% by more than 20%. according to The Annual eCommerce Leaders Priorities Survey Report, a study by Namogoo and Astound Commerce. 

One change is that customer lifetime value will be the top KPI for 58%, putting it in first place on the list.

In contrast, the conversion rate has fallen to second place (53%), customer acquisition cost to third (51%), and new traffic acquisition to fourth place (50%). Average order value comes in fifth (34%). 

It’s not clear whether the move toward LTV reflects increased sophistication — advanced companies are most likely to track it — or a decision to focus on retention because acquisition is so frustrating.

Of the brands polled, 97% see first-time shoppers as a challenge. Those consumers are:

  • More sensitive to price — 58% 
  • More easily distracted by competing promotions — 51%
  • Less brand loyal than existing customers — 45%
  • Not enough data to personalize for new online shoppers — 43% 
  • Higher cart abandonment — 36% 
  • We don’t have challenges — 36%



This is no small thing, given that first-time shoppers will make up 52% of total visitors this year.

What are the main causes of friction for customers?

  • Account creation — 28%
  • Product search issues — 27%
  • Lack of product reviews — 26%
  • Third-party ad injections — 21% 
  • Limited payment options — 20%

Whatever the problem, email marketing be a key factor in resolving it.

Discounted offers are typically sent out via email. Moreover, email is critical in reclaiming abandoned carts and engaging buyers at all stages of the customer journey. 

And with interactive email, shoppers can order right from their inbox without moving to  web page, although few brands are probably providing that yet. 

Of course, the biggest ecommerce hurdles in 2021 seem to have little to do with email. They are:

  • Difficulty delivering complex profits due to work-at-home — 55% 
  • Dependence on IT/Data — 54%
  • Hiring the right talent/employees — 51%
  • Proving impact/ROI — 50% 
  • Reduced budgets — 41% 
  • Stakeholder buy-in — 29%

Their investment priorities include:

  • Site performance — 70%
  • Personalization — 52% 
  • Replatforming and/or headless ecommerce — 51%
  • Omnichannel optimization — 51%
  • Product discovery and product search — 47%

Meanwhile, 49% expect COVID-19 to impact their technology selection. 

In another sign of investment, 87% expect to grow their headcount, with 51% who plan to increase it by more than 10%. Right now, 77% of ecommerce departments have more than 20 employees and 45% have more than 50.

Namogoo and Astound Commerce surveyed 100 senior eCommerce managers in  November 2020. 



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