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KPIs (Key Performance Indicators) are very important for monitoring business progress and achieving goals. Ecommerce KPIs can tell you a lot about how your business is performing and what you need to do to improve things.

Most KPIs are tracked through data associated with specific metrics, and there are many ways to collect metrics. For example, enterprise resource planning (ERP) software allows you to capture data on everything from transactions to logistics and use that data to monitor and analyze performance.

Similarly, email marketing software and social media trackers can provide continuous metrics analysis on marketing, engagement, and more.

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So let’s take a look at 10 important eCommerce KPIs, the metrics that measure them, and what they can tell you about your business.

1. Revenue and sales KPIs

WooCommerce revenue analysis screenshot
Image from WooCommerce.com

Revenue and sales KPIs tell you how much profit your business is making and which products are most profitable and when. For an accurate and holistic view of your revenue, it’s a good idea to track and collect data from things like billing software and combine it with data from retail analytics software.

Below are some important revenue and sales KPI metrics.

  • Average order value (AOV): AOVs are useful for things like setting up shipping charges. For example, a high AOV means you’re more likely to be able to offer discounts or free shipping, while a low AOV means you might have to charge a little more.
  • Conversion rate (CR): This defines the rate at which people perform the desired action (in this case, a purchase). CR tells you how many times you had a chance to achieve your goal and how many times you actually achieved it.

2. KPIs for customer acquisition and retention

These KPIs can tell you a lot about how your customers feel about your brand. For example, low customer retention rates may indicate that your product needs troubleshooting or that your brand needs to take steps to improve customer loyalty.

Below are some metrics to monitor acquisition and retention KPIs.

  • Customer Lifetime Value (CLV): CLV is important for measuring loyalty and knowing where to focus on retention.
  • Customer acquisition cost (CAC): CAC tells you how much it costs on average to acquire a new customer. This will help you consider whether you should put more money into things like lead collection.
  • Churn rate: By tracking this, you can understand the pace at which customers are leaving your brand, canceling subscriptions, and discontinuing your services.

3. Website performance and user engagement KPIs

Website Analytics Photo by Luke Chesser on Unsplash
Photo by Luke Chesser on Unsplash

An e-commerce website is your storefront. To see if your ecommerce store is engaging and converting, keep an eye on the following metrics:

  • Website traffic: This refers to the number of people who visit your e-commerce store within a certain amount of time. It’s a very useful metric to follow when tracking your website’s performance KPIs, as more web traffic usually means better conversion rates.
  • Page views per session: A high number of page views may indicate a clunky purchasing process. People like to be able to convert in as few clicks as possible. Therefore, try to relate the pageviews per session metric to your customer’s journey.
  • Bounce rate: Bounce rate indicates how often and how quickly users “bounce” from your site. A high bounce rate may indicate a performance issue (such as a glitch) on your website. It may also mean that you need to reconsider your web content and formatting.

4. Inventory and fulfillment KPIs

warehouse photo
Photo by Petrebels on Unsplash

Whether you’re dropshipping or operating your own warehouse, measuring inventory and fulfillment metrics can help you understand how efficient your inventory system is and how well your ordering and shipping processes are working. You can see how well it is functioning.

In this case, tools such as retail system ERP can be very helpful. Because you can use it to manage inventory, warehouses, suppliers, and collate all your business data. This gives you complete visibility across your business and allows you to easily access your data and track these useful metrics.

The metrics to track are:

  • Inventory turnover rate: Inventory turnover rate indicates how quickly inventory is depleted and replenished. If your sell rate is higher than your sales revenue, you may not be meeting your KPIs for inventory and fulfillment.
  • Repeat purchase rate (RPR): This KPI helps show whether you are meeting your loyalty KPIs. It also helps you know which products sell the most and need to be restocked most often.

5. Marketing and advertising KPIs

Since marketing and advertising is driven by data, KPIs are the easiest to track.

Below are some important marketing and advertising metrics.

  • Reference source: It’s important to know where your revenue is coming from. Monitoring your referral sources will tell you which platforms, channels, and referral marketers are performing best and which ones you need to step up.
  • Pay per click (PPC): If you’re advertising in a PPC format, monitoring your PPC rates will tell you both how much you’re spending on PPC ads and whether those ads are working.
  • Average rank: This refers to the average ranking in the SERP (Search Engine Results Page). The higher the value, the more effective your SEO efforts are. If it’s low, it means your SEO may need some work.
  • Return on advertising spend (ROAS): ROAS tells you how much revenue you make compared to the amount you spent on your advertising campaign. It can be applied both to specific campaigns and to your overall marketing strategy.

6. Customer satisfaction and service KPIs

InMotion Hosting's Net Promoter Score (NPS)
Net Promoter Score® Chart

Customer satisfaction and customer service are closely related. Customer satisfaction KPIs can tell you a lot about how well your customer service is working and whether your product is up to the task. Similarly, customer service metrics can reveal a lot about general customer satisfaction.

Some of the important ones are listed below.

  • Complaint rate: Complaints can be measured in several ways, including by subject, by demographic, and by the general number of complaints received. It’s a very good idea to keep an eye on your complaint metrics as it gives you accurate information on how to improve both customer satisfaction and service.
  • Return rate (RR): A high return rate usually means the product does not meet customer expectations. If a particular product has a high return rate, it is less likely to meet your performance KPIs.
  • review: The ratio of positive to negative reviews can give you an overall idea of ​​how satisfied your customers are with your product or service. To gather more information, dig into the reviews and note the ones that jump out at you.
  • Net Promoter Score® (NPS): This measures customer experience, overall perception of your brand, and predicts business growth. This metric provides the perfect anchor for your customer experience management (CEM) program and complements other metrics and insights from different points in the customer journey.

7. Mobile Commerce (mCommerce) KPIs

People using mobile phones to shop for Black Friday
Photo by CardMapr.nl on Unsplash

mCommerce is a growing field and can be very helpful in reaching your customers directly. mCommerce KPIs indicate how well your e-commerce store is optimized for mobile and how effective your mobile marketing efforts are.

mCommerce metrics include:

  • SMS list of subscribers: A large SMS subscription list means your SMS marketing strategy is working. Monitor the growth of your SMS list to understand how many people are engaging with you via mobile.
  • Number of app downloads: High app download rates are generally a good thing. Be sure to also pay attention to your app’s retention rate. This will tell you how effectively users are discovering your mobile app.
  • Opt-in for push notifications: The number of people who have opted in to push notifications is a good indicator of how many people are actively engaging with your app/website.

Social media and influencer metrics indicate the success of your social media presence. Social media is prone to mistakes, so it’s important to monitor these metrics like a hawk.

Social media metrics include:

  • Engagement rate: This tracks all types of engagement, including shares, comments, and likes.
  • arrival: This refers to the total number of people who viewed your social media content.
  • thoughts: These are the number of times your content will be displayed. Unlike reach, people may not actually see the impression.
  • Click-through rate (CTR): Click-through rate primarily refers to the number of people who click on your social media ad and visit your e-commerce website. For social commerce, this can be replaced by social media conversion rate.

9. Sustainability and social responsibility KPIs

Concrete building covered with green shrubbery
Photo by Danist Soh on Unsplash

Sustainability and social responsibility are important on more than an ethical level. Millennials and Gen Z are more likely to vote on these matters and avoid buying from unethical brands.

We therefore recommend paying close attention to sustainability and social responsibility indicators such as:

  • Carbon footprint: This refers to the amount of carbon consumed by business operations, including product miles driven, employee commuting, energy use, shipping emissions, etc.
  • Diversity and Inclusion (DAI): A good DAI metric shows that you are a fair employer that does not discriminate and takes pains to ensure the work environment is unbiased and representative.

10. Data analysis and performance improvement

All these KPIs and their metrics are useless without data analysis skills. Monitoring performance improvements (or lack thereof) requires continuous analysis of KPI metrics.

Therefore, set KPIs for data analysis. For example, let’s say you set a goal to generate an analysis report once a month. This is very easy to do with the right e-commerce tools.

Don’t worry if you don’t have data analysis training. Most e-commerce platforms and tools these days have some kind of data analysis functionality. Try out the software and see what it can do.

Things can change quickly, so make sure to keep your data analysis up to date. Monitor your data regularly (ideally continuously) and scrutinize it whenever something changes.

Conclusion: Use KPIs to improve e-commerce performance

KPIs help you closely monitor your e-commerce performance. By tracking and analyzing your e-commerce KPI metrics, you can see where your business strategy is successful and where there is room for improvement.

If you want to learn more about KPIs, why not read our blog on Important Business KPIs You May Have Missed?

Make money with Oziconnect referral program
Make money with Oziconnect referral program
Make money with Oziconnect referral program
Make money with Oziconnect referral program
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