Sales, earnings, and traffic are all apparent and crucial KPIs for e-commerce firms to measure, but these are only a handful of the numerous metrics you should be tracking. In this article, you'll discover how leveraging eCommerce business data through 24 essential KPIs can drive sales and revenue growth for your online store.
What are KPIs?
A KPI is a metric that you track to gauge how your business is performing and how you can improve. It helps you determine whether your strategies are working or if they need to be adjusted.
If you're trying to improve something, these metrics will provide precise numbers to help you make necessary adjustments. You'll have data that shows exactly how things are going, what impact changes had, and whether it was positive or negative.
KPIs should be simple, but they should also give you enough detail to be helpful. There are many different types of KPIs; some are used for specific purposes, while others can be used in various situations.
Why Track Ecommerce KPIs
It doesn't matter what stage of your e-commerce business's growth; you should be tracking KPI.
You need a baseline to show progress; KPIs are an excellent way. Once you collect enough data, you can create trend reports, which help you learn more about how things are changing and what your goals should be moving forward.
So, why track e-commerce KPIs? They are essential even if you don't need them to grow your business. They provide meaningful information, which helps improve processes and make decisions that can help you drive profitability.
What are Effective E-commerce KPIs?
The most important thing about your e-commerce KPIs is that they provide insight into what's going on in your business. If you don't have this insight, tracking them doesn't do any good. The KPIs you choose will depend on how your online store is structured. You can track anything from the number of sales to the length of time for each sale to your bounce rate.
The problem with tracking too many KPIs is that it makes analysis more difficult. You may need more information from too few of them, and you'll likely need more data than you can reasonably collect if there are too many. So, consider only tracking the most important things.
It's also essential to ensure that the metrics you choose provide insight into what's going on in your business; ignore vanity metrics that don't matter because they don't tell you if something is working. This includes metrics such as "likes" on various social media platforms and blog views.
Instead, pay attention to sales and traffic.
The following are the top 23 e-commerce KPIs.
1. Conversion Rate
2. Conversion Rate Per Traffic Channel
3. Customer Lifetime Value (CLTV)
4. Customer Retention Rate
5. Annual Repurchase Rate
6. Average Order Value (AOV)
7. Net Profit
8. Cart Abandonment Rate
9. Checkout Abandonment Rate
10. Add to Cart Rate
11. Orders Per Active Customers
12. ross Merchandise Volume (GMV)
13. Return on Investment (ROI)
14. Influencer ROI
15. Return on Ad Spend (ROAS)
16. Return on Marketing Investment
17. Cost Per Acquisition (CPA)
18. Customer Acquisition Cost (CAC)
19. Average Profit Per Customer
20. Revenue Per Site Visitor
21. Time on Site
22. Bounce Rate
23. Organic Search Rankings
24. Customer Satisfaction
KPIs Every Online Store Should Track
Below are some of the most common e-commerce KPIs you should track to help grow your business. This is a partial list but an excellent place to start. Once you're tracking these, you can add others more specific to your business structure or goals. For example, once you start selling products that require longer lead times, you'll need KPIs that specifically show how long things take to produce and how much they cost.
You should track how many orders you receive each month to measure your performance. It's good to look at these numbers every month or every quarter so that you can see how they trend over time and know if changes are needed.
If you're looking for more insight, you can break down orders into domestic vs international, product categories, and so on. If one of these areas is performing well, it may be worthwhile investing in it because that will help boost sales overall.
You should also track traffic to see how many people visit your website every month and what their behaviors are like when they're there (i.e., what pages they visit and how long they stay on each page). This will tell you whether your site keeps people in the right place, whether people are coming back, and how many convert into sales.
You should also look at your bounce rate. This will tell you how likely someone is to leave after visiting your site, and it can help you define what's working and what isn't so that you can take action on the things that aren't.
You'll want to track the total dollar value of orders by KPI. Your total sales are important, but they don't tell you where the money came from or what products are performing best. You'll need to interpret those numbers to gain more insight into your business.
Average order value
This is an important KPI that shows how evenly your customers are spending their money, and it can give you a sense of which areas are doing the best and which ones aren't; however, it only gives you one side of the story.
You'll also want to track customer engagement, especially customer satisfaction, and likelihood to recommend (LTV). For example, if your products tend to cost $100 combined, but 90% of customers end up ordering higher-priced items instead of combined sales, then that metric will tell you what's not working so that you can fix it.
Your customers are a massive part of your business; without them, you wouldn't be selling anything. So, you must know how they feel about your online store. One good way to do that is by tracking customer satisfaction. This shows what things are going right and where improvements can be made (i.e., what to stop doing and what to start doing). You'll also want to track the number of complaints you receive so that you can address any problems before they get worse and drive away customers.
Your team may have set processes or formulae for figuring out how long various tasks take, but it's good to keep track of this by KPI as well. This will help you adjust timelines if something isn't working.
You'll want to track the number of sales made per visitor to know how well your site converts visitors into customers. You can also look at this as a percentage of visitors or transactions per session to make it more actionable (i.e., it's a better practice to look at the success rate per session than per visitor).
Where are your customers coming from, and what do they like about your site? Is it an email campaign? A social media post? An RV show? You should track this information to be strategic about where you spend marketing dollars and efforts.
For each traffic source (or channel, if you will), you should track the number of visitors and sales it brings in. This will help determine where your focus should be and what kind of ROI it's bringing to your business. You can also look at clickthrough rate by channel to see which things are working best.
Oftentimes, changes you make to one area will affect others, so this helps you benchmark where things stand currently and how they may change as other sites change or improve.
Traffic source conversion rate
This KPI shows what percentage of visitors convert into sales. It's similar to conversion rate, but it's a more business-oriented metric that will better help you determine what channels and campaigns are doing the best and helping drive sales.
KPIs are an essential part of e-commerce management . You may be doing important things incorrectly or not at all without them. If you're beginning your e-commerce operations, you may not have the time or resources necessary to track everything before embarking on that first sale, so it's best to start small and grow from there. These e-commerce KPIs give you a good starting point and help you define how to spend your time and money wisely.