Another one of KPIs, you will think. I’m one of them until the (piiiiiiiiii).
And you are right. The truth is that about the KPIs for eCommerce (key performance indicators or in Christian words, key indicators that tell you how you are doing things) rivers of ink have run (okay, billions of pixels have been turned on), but in general, quite obscure and not very accessible to the layman who has an e-commerce store and wants to know what to look for. First, let’s clarify the terms. Too many times we confuse metrics with KPIs.
KPIs Vs Metrics
To numbers that we obtain from a tool such as , if we are talking about a website, or any of the monitoring tools of , in addition to the data that the networks themselves give us (for example, number of followers on Twitter, number of RTs, of mentions…). all of these are metricsraw data, some of which we can use as KPIs if we are interested, but not all.
Usually, KPIs are usually the product of mathematical operations based on metrics. Although there are tools that can calculate them for you, if your budget is limited or you don’t want to rack your brain trying which tool suits what you need, many of them will have to be done yourself using a spreadsheet.
If you don’t have a strategy, you don’t need KPIs for eCommerce
As simple as that: KPIs are indicators of fulfillment of strategic objectives. So, If you have not previously defined what your objectives are, you will hardly find the right KPIs for eCommerce to know if you are on track to meet them or not. In fact, a very common phenomenon is information overload.
Managing a lot of data but not being able to draw conclusions from it, because you are not clear about what you want to achieve. So first, what are your objectives, whether we are talking about your business in general or if it is a specific action or promotion.
Beware: “I want to sell more” is not a strategy. It is starting the house from the roof. Sales are the result of a process that has many stages, and that is where you must actin each of these stages, making decisions whose final result will be a certain level of sales. And in each of these stages you have to have an indicator that tells you if you are fulfilling what you set out to do or not.
That is the real utility of KPIs, to become a scorecard of your business, just like a car not only informs us of the speed at which we are going, but also has a multitude of indicators and red lights that turn on if something goes wrong, because the sensors that capture the data tell the electronic brain of the car that something is wrong and the car responds by turning on a red light on the instrument panel.
https:///how-to-create-a-dashboard-for-ecommerce/
KPIs are the red lights of your business.
8 KPIs for eCommerce
Go ahead that the definition of the appropriate KPIs depends, as I said before, on your specific strategy. However, we can classify the most common in relation to the aspects that we want to measure Here are some examples (there are not all the possible ones, I am not so daring, but you get the idea)
1. KPIs related to the investment effort
Since attracting customers costs money, we can relate the investment we make in marketing with the final result or with different parts of the process:
cost per lead
The are not the gross visits to your website, but those that you have had to “fish” on social networks, on a blog or on third-party sites. You have all this information for free in Google Analytics and you can put it in relation to what you have invested in that “fishing” effort.
advertising performance
The important thing about purely advertising actions is not how many clicks they generate, but how many of those clicks become sales. A in this case could be the % result of dividing the total cost of a campaign by the sales attributable to that specific campaign. So you can know the cost effectiveness (the famous ROI or Return of Investment) that those campaigns generate for you and what it costs you to get a sale. This is very useful when comparing the effectiveness of different types of campaigns or doing A/B tests.
two. KPI’srelated to user behavior on the web
For the sales to arrive, it is necessary that a significant part of the users complete the sales process. Introducing measurement criteria through KPIs at key points in the process (the famous sales/conversion funnel) can help you a lot to know which parts of your eCommerce store are meeting the preset objectives and where you should act.
conversion rate
It is the % of visits that They end up turning into sales. It gives us information about the entire process as a whole- It is one of the recurring KPIs in any analysis, but, although it is very useful, it does not give us information about in which parts of the process the abandonment of potential clients occurs according to the source of origin of the visits, since it will tell us in which channels we are most effective.
A case of a metric that is pulled directly from Analytics and can be used as a KPI. It measures the percentage of home page bounces without performing any interaction with the web. It is a good indicator of the effectiveness of said page to retain visits, as well as it tells us if the “call to action” of this page are being effective.
Average purchase value
Total purchases of a period divided by the number of buyers. It gives us information about cost effectiveness (if we combine it with the cost per lead or the advertising performance) as well as whether or not we are close to the sales target per client that we have set for ourselves.
recurrence rate
It informs us of the % of visitors who are not new, but have already visited the website before. If we break it down by channels of origin of the visits, it is a good indicator of the degree of loyalty that we are achieving.
abandoned carts
The % of y sales not completed tells us if something goes wrong in the checkout process, in addition to indicating which products abandonment occurs most frequently. The latter can give us clues about the degree of competitiveness of our products compared to the competition, or if we are abusing shipping costs.
Abandonment rates on each web page
Knowing at what point customers abandon is essential to be able to remedy it.
… and many more KPIs for eCommerce
We could include many more KPIs for eCommerce, related to the social media activity, online reputation or brand appeal, Among many other things. The above is only valid as an example, since the design of the KPIs must be customized according to each business and its particularities.
The important thing is that before launching to measure we must be clear about what we want to measure, why it is being measured and, most importantly, what actions we are going to take based on what the indicators tell us. And let’s not forget that an isolated KPI does not tell us much.
It is important that we know how to relate each other and observe the temporal evolution based on the corrective actions that we have taken in each case.
Ultimately, it is about design a based on our objectives, which we must update and review at least every month. The ideal: to have an application that automatically calculates the KPIs for eCommerce that we want (many CRMs and ERPs allow it) but this is usually expensive, both financially and in implementation time.
sometimes a Excel sheet is more than enough to start a small business.
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