When approaching an online store project, it is important that it is done with some objectives. And how do we know if we are on the way to reaching them or not? Exactly, measuring. Establishing eCommerce KPIs is one of the most relevant decisions for the success of a project of this type. Let’s see how we can approach the task…
Top eCommerce Metrics to Watch
Usually, the vast majority of companies that operate with an online store follow a series of global metrics. KPIs that could be valid in any eCommerce, that give relevant information and can be acquired in any business.
These indicators have a positive side, and that is that they are widely known; and therefore relatively simple to obtain and understand. In addition, they offer information that can be useful for the future of the online store, the business or even the company. On the other hand, they also have a negative side: they are generic and, for this reason, they may not be useful in certain cases; or worse, they can be counterproductive.
In any case, it is important to know and value them in order to establish the eCommerce KPIs that the company is going to monitor. here, some examples of valuable metrics:
- Acquisition cost; a relationship between investment and sales.
- Customer Lifecycle Value; relationship between revenue and time per customer.
- Return of investment; a relationship between income and costs.
- Conversion ratio; a relationship between sales and customers by channel.
- Rate of return; a relationship between new and returning visitors.
- Average basket value; a relationship between sales and operations by users.
Apart from these indicators, there are Other information that is important to know, follow and rate. For example, new records (leads) and customer satisfaction, based on the notifications collected by Customer Service. Or others that are useful for making decisions about content, strategies and campaigns: demographic data, search history, etc.
Although the examples are quite general, it is important to take into account the information that will be obtained from each eCommerce KPI. This information must be relevant, without falling into those known as vanity metrics; those indicators that you like to show because they are easy to obtain and appeal to the ego a bit, but that are not relevant to the business, nor do they improve customer satisfaction, nor do they help increase sales. For example, number of visits, users, subscribers to the newsletter, page views, etc. Note: this does not mean that these metrics should not be collected and studied; it is simply a reminder that each indicator must be evaluated according to the business objectives.
How to set eCommerce KPIs
With experience and strength of use, more often than not, many of the metrics that are written down in a first draft to track eCommerce KPIs last far too long. Namely: there are no main key performance indicators for an online store.
The reason is very basic: before defining the KPIs of your virtual store, you must ask yourself at least two fundamental questions:
- What do you need to know?
- What do we want to achieve?
If the company is able to answer those two questions (which it should), it will have a marked goal; an essential first step to achieve it. But the answer to these two questions, which seem very simple, should not be taken lightly. To do it right, you have to take into account other fundamental issues: the fundamental objectives of the organization, the business model and other considerations unique to the company.
Thus, for some businesses it will be essential to track reach metrics (likes of Instagram, reach of publications…) and for others, behavioral metrics (average visit time, cart abandonment…).
Evolution of eCommerce KPIs
The objectives can be changed and, therefore, Indicators need to change. that show whether we are approaching or receding. Thus, when facing an eCommerce project, it may be advisable to execute it in different phases.
A first stage, in which the system is new to both the company and the customers, may require more modest goals and simpler metrics. For example, you can choose not to activate the cart at the moment, so that users are encouraged to start visiting and discovering the new website. At this time, it may be relevant to monitor user registration, daily visits or return rate.
Perhaps, later, in a second stage, the cart will be activated to receive the first purchases. Here, it would be helpful to collect data on user retention, average ticket, purchases per customer, or the like to gain insight into customer behavior. In this context, the eCommerce KPIs of the first stage would cease to be relevant and, even, some action would also cease to be relevant, since when it comes to online sales, one of the keys to growth is to dedicate resources to the content creation.
Choose an eCommerce tool that allows you to meet the KPIs
The selection of the eCommerce platform is a key to success to achieve business objectives. This selection can be complex, even more so considering the number of options that exist in the market. But taking into account the possibilities offered by each one of them, it is a question of drawing up a list of those that are most relevant in the current and future situation of the company:
- Cost-benefit ratio.
- Professional relationship with the project team of the tool.
- Possibilities for growth without replacing the platform.
- Understanding of the project and needs by the project team.
- Integration with other key tools of the organization, such as the ERP.
- Knowledge of the business by the platform team.
- Support and maintenance service.
The expectations generated in the selection of the eCommerce platform
Sometimes the key performance indicators are very clear at all times, even before starting the eCommerce project. On other occasions, it may be that the platform itself, the experience of the implementation team or the experience within the company itself, shapes these KPIs. Once it comes into operation and we find reality, it is common, and even recommended, that these indicators change or transform. But from the start, they will always be evaluated and taken into account based on expectations. The expectations generated during the selection of the platform, once it has been chosen and the start-up, form a role that must be taken into account.
Especially in the decision process of the online sales platform, these expectations can help in the selection and search for the main initial eCommerce KPIs; for instance:
- That customers perceive the information of the online store in real time.
- That the team adapt quickly to the eCommerce work system.
- That eCommerce is well integrated into marketing and sales processes and systems.
- That the platform supports the integration of company information (inventory, prices, customers…).
- That eCommerce does not involve an increase in costs for the company.
- Be it a B2B or B2C oriented store or both.
In short. Every business is different and as such, your metrics may be different from another company or industry. In addition, it is necessary to be aware and open to the change of eCommerce KPIs over time to meet the objectives established in each phase. In this sense, it is advisable to have a long-term vision, but setting short-term goals. And one last thing, but absolutely essential: you have to measure and measure.