Key Performance Indicators or KPIs are used to measure the progress of an intended result or you can they measure a business’ performance based on the objectives and target. Evaluating KPIs helps companies identify the progress towards marketing, sales, and many other things.
KPIs tell you how effective you are at achieving your objectives whereas metric track the status of a process. Put simply, KPIs reflect the result while the metric reflects the process.
Let’s understand the various key performance indicators in eCommerce. In this article, I have specified key performance metrics for Sales, Marketing (including email marketing) and Facebook Marketing.
Sales KPIs measure how your business is doing in terms of conversions and revenue. It includes:
E-retailers can monitor the total sales by hour, day, week, month, or year.
Also called average order size or average purchase value, it tells you how much a customer spends on a single order.
This KPI helps sales team evaluate the profit margin over a period of time across products and services.
It is the rate at which conversions are happening on your website. It can be assessed by dividing the total number of visitors to total conversions.
This KPI tells you how much a customer is expected to spend on your products or services over their lifetime. This requires strengthening the relationship with customers and building customer loyalty.
The retention rate tells you the percentage of customers you have retained over a period while the churn rate is the percentage of customers leaving your brand over a period.
This KPI tells how many users are adding the product to the cart but not purchasing it. A high cart abandonment rate can have many reasons including an intricate checkout.
It tells you about the products that are purchased together, helping you improve your cross-selling strategies.
This KPI tells you how much amount you are spending on acquiring a new customer.
This is calculated by subtracting the total cost of goods sold from total sales.
It refers to the total number of users visiting your website.
It provides data on the time spent by a visitor on your website and web pages.
It is the percentage of visitors who exit from your website after viewing only one page. Higher bounce rate is an indication that your homepage is not appealing enough to generate curiosity in the visitors to explore further web pages.
It tells you the average time a user spends on your website on a single visit.
The traffic source tells you where most of your visitors are coming from, for example, Google (organic), social media, paid ads, etc.
It tells you the percentage of your email subscribers who open your email. If you have a low email open rate, you can try to improve it by testing different subject lines, removing inactive subscribers, or even sending emails at a different time.
This marketing KPI tells you how many subscribers are clicking on the inside link after opening your email. This is important because if they are not clicking on the link, you won’t be able to drive them to your website.
It tells you the percentage of subscribers who unsubscribed to your emails.
It provides you insights on how your followers are interacting with your brand on social media.
This KPI tells you the total number of clicks on the link and can be measured for website, social media, email, ads, etc.
It provides you with insights on your Facebook followers. You can know which gender is more attracted to your brand, which age group most of your followers belong to, which location does most of your followers belong to, etc. This helps you analyze your target audience.
This KPI tells you how quickly your brand is growing over Facebook.
It tells you how many people have seen your post or Ad on the platform.
Engagement tells you how often people are interacting with your brand. Low engagement is a sign of boring content.
It tells how many users filled out your lead form be it through paid ads or organic reach.
This KPI tells you how many leads got converted.
It tells you how quickly you are responding to your messages. Facebook shows the response time for pages.
There are many performance indicators in eCommerce. Once you have set your objectives and selected KPIs, monitoring them will become your daily routine.