E-commerce metrics and KPIs play an important factor in determining the performance of businesses. You can track how daily changes affect the overall development of the company. Site traffic, average time spent on site, sales, and profits are important KPIs that businesses should follow. Carefully analyzing your KPI’s will help you to achieve your businesses goals more effectively. By increasing the number of KPIs you follow, you can easily notice in which direction your business is developing or falling behind.
Are you spending company revenue the right way? Are you setting a sufficient budget for advertising and marketing? What is your new customer acquisition rate and your customer churn rate? Are your customers loyal to you?
You can find the answers to the above questions by tracking the required KPIs. In this blog, we will get to know KPI metrics closely with these titles:
- What are KPI Metrics?
- What is the Difference between KPI’s and Metrics?
- Importance of Key Performance Indicators
- Types of Key Performance Indicators
- The Best KPI for E-commerce
- KPI Examples for E-commerce Marketing
- What is a KPI Metrics Dashboard?
What are KPI Metrics?
KPI is a key performance indicator that can be measured at any time for a determined target. They are milestones that show the progress and development of a business. It helps companies in the decisions they need to take in their next steps. Key performance indicators help improve everything from finance to marketing to sales.
What is the Difference Between KPIs and Metrics?
Even though key performance indicators and metrics are similar, there is a difference between them:
- KPIs show you the paths you should take to make the most impact on the results of your business. It shows you what your teams should focus on primarily.
- Metrics support KPIs that guide you to improve your company. It measures the success of your employees’ work, customers, income, etc. It is important to the outcome of your success, but not as critical as KPIs.
Importance of Key Performance Indicators
KPIs show whether your team is supporting your business’s goals on the road to success. Here are a few examples of why you need your KPIs:
- Creates a common goal for teams: Regardless of employee or project success, KPIs keep teams moving in the same direction, so you can achieve faster and more successful results.
- Health check: Key performance indicators show risk factors and provide a realistic path for your company.
- Learning from your results: KPIs show your businesses success rates as well as your failures. This way you can identify the areas of improvement in your business.
Types of Key Performance Indicators
There are several key performance indicators that can clearly show what results occur from the mistakes made in the past, predicting future success or failure. KPIs are used in many industries. If we talk about e-commerce, we can talk about 5 different titles. These are:
- Project Management
- Customer Service
The Best KPI’s for E-Commerce Companies
Here are some examples:
Customer Acquisition Cost
Customer acquisition cost (CAC) is the average amount of money spent on acquiring new customers. You can calculate it by dividing your businesses total marketing and sales costs for a specific period of time, by the number of new customers you acquired during that period of time. The resulting number is the cost of acquiring new customers.
Average Order Value
It reflects the average value of the orders placed. As this value increases, your income also increases. When you shop online, it tries to increase the sales value by suggesting similar products according to the product you added to your cart.
Encourage customers to buy multiple products: You can make more sales with customized ads according to the products they add to their carts or wish lists.
E-Commerce Conversion Rate
This shows the percentage of visitors who have become customers on your site. The rise in conversion rate is directly proportional to your income. Well, how can you increase this rate?
- Fix technical issues. Problems like slow loading times, images not loading, or a slow problematic checkout process drive customers away. They should be corrected as soon as possible
- Find areas of frustration. By using the necessary analysis tools, you can find out in which area of your site your potential customers and permanent customers are lost. You can systematically improve them by finding areas where your customers will have trouble and fix them.
- Keep your website pages simple. Do not provide e-mail participation for both product sales and product evaluation on one page. If there is more than one job on a page, customers may be confused, so it should be presented as plain and simple as possible.
- Use a simple website design. Remember that the direction of your goal is to sell more to your customers. Since your website will be used by people from many age groups, it should be simple to use but aesthetically pleasing.
- Create a sense of urgency. If you want to increase the conversion rate, you can put a deadline on the products you sell, or you can increase your conversion rates by writing things that will make you feel that the products are sold out, prices will rise, that customers are missing an opportunity.
KPI Examples for E-Commerce Marketing
Marketers use KPIs to understand which products are selling, who is buying, why they are buying, and how they are buying. By using them, we learn more about the customers we offer products and services to. By analyzing this data, you can get better at developing or promoting products.
Examples of key performance indicators for marketing include:
- Site traffic: It shows the total number of visits to your e-commerce site. A high number indicates that you have been visited by many people.
- Traffic source: It shows where your visitors come from or how they found your site. In this way, you can have information and data about which social media, paid collaborations, or organic searches affect more. You can also find out which of these communication channels you should invest more in.
- Average time spent on site: It shows how much time your customers spend on your e-commerce site. Having a high average time spent on your site indicates that your customers are interested in your site, and it is an indicator that your communication with customers is strong.
- Average session duration: Shows the average time a person spends on your site during a single visit.
- Bounce rate: This shows the number of times your customers exit after viewing only one page. If this number is high, you can try to find what you need to improve on your site and reduce this rate.
- Pageviews per visit: It shows the average number of pages that people open during their visit on your website. A high ratio indicates that your interaction is high. But another reason for this is that the site interface is complex, and it can show that your customers are having difficulties finding what they want.
- Daypart monitoring: You can find statistics on which time of the day people visit your site more.
- Email open rate: It shows the rate of your subscribers opening your e-mails. If this rate is low, you can try to send interesting headlines or more customized e-mails.
- Email click-through rate: This shows the percentage of people who clicked on the links within your email. It is very important to give the percentage of the audience that is actively interested in the content you post within your email.
- Number and quality of product reviews: Product reviews give you realistic feedback on the products you offer and build trust for potential customers. The number of product reviews are KPIs to watch out for.
Using Juphy, you can manage all customer communication channels from one platform, this way you will have plenty of time to interact with your customers and therefore have an active customer support line. It also automatically produces engagement and performance-based reports. These reports help you to measure your team’s or businesses overall performance and identify areas of improvement. With these reports/graphs provided you will be able to track:
- Total conversations your team had in a specific period
- Overall average response time of your team
- Total number of conversations you had on specific channels between certain dates
- The number of customers most engaged with your business
If you work as a team, you can also follow your support team members individually as for their average response time, assigned conversation rates, and the number of replied conversations.
Juphy also has many other features for you to easily manage your business, save time while doing it and make your business reach top-level customer support standards; even if you are working as an individual or a crowded team. So be sure to check out its features on Juphy’s website.
As we were saying, tracking these metrics is beneficial to constantly improve your business and team’s productivity. Being able to understand and read them is also as important.
What is a KPI metrics Dashboard?
A KPI dashboard allows you to review and learn more easily, quickly, and practically by showing you key performance indicators with graphs and charts.
You can use key performance indicators to strategize or modify a target over a while. Utilizing graphs makes it easier to see data. This way, data can be easily acted upon with better analysis. It collects every return to your company or e-commerce site in one place and clearly shows what needs to be focused on and improved.
According to the data obtained in the template seen here, a roadmap to plan the next step for your business can be drawn.
These KPI dashboards can be used in many areas, for example:
- Project Management
- Customer Service
- Human Resources
- Social Media
As a result, key performance indicator are something that we use in our minds not only in business but also in our daily lives. If we make decisions by considering all of our past experiences or possible results while making many decisions in our lives key performance indicators do this for companies.
But be careful, KPI’s are not stable, they are dynamic and change all the time, therefore your business’ plans rotate too. So it is important to progress with a well-followed KPI. At the end of the day, indicators provide you with the most logical and accurate data to guide the future.