As I mentioned in my previous blog, any successful transformation starts with the right end goal in mind. In the world of e-commerce, measuring success is an important task. With so many moving parts, it can be challenging to pinpoint which metrics to track and how to use them to make informed decisions. In her book Leverage Points: Places to Intervene in a System, Donella H. Meadows describes that one of the most efficient ways to change a system is to alter the goals and what you measure in a system.
Here are five critical areas of KPIs that I used to improve e-commerce businesses performance:
- Acquisition
There are various metrics to track, including media performance, media mix, social mix, and channel mix. Acquisition KPIs focus on how businesses attract new customers to their websites. Media performance metrics include clicks, cost per click (CPC), cost per order (CPO), cost per acquisition (CPA), and cost per mille/1000 impressions (CPM). Media mix metrics focus on the percentage of marketing channel share, the number of visitors per source, owned vs paid traffic, ad impressions, and unique visitors. Social mix metrics track the cost per engagement (CPE), cost per follower (CPF), and views per channel. Channel mix metrics focus on the percentage of online channel share, the click-through ratio (CTR) per channel, page views, and the overall click-through ratio. - Activation
New clients, absolute performance, and funnel performance are critical areas to track. New clients focus on the number of new accounts created, orders/conversions, sign-ups, transactions, and leads. Activation KPIs track how many new customers sign up for the website and complete transactions. Absolute performance metrics track the number of unique visitors and sessions. Funnel performance metrics track the conversion ratio, the number of pages viewed, the time on the page, and the bounce rate. - Retention
Retention KPIs track how well a business retains its customers. Email, account creation, and social metrics are vital areas to track. Email metrics track email click-through rates. Account creation metrics track the number of logins, returns to complete profiles, and churn percentages. Social metrics track returns to share, returns to use X feature, length of use, and shares. - Referral
Virality and referral success are two critical areas to track. Virality metrics track shares via email, social media, and posts on Facebook, Twitter, LinkedIn, and other platforms—referral success metrics track invites and referral conversion rates. Referral KPIs track how well a business is being shared and recommended. - Revenue
Revenue attribution and conversion quality are two key areas to follow. Revenue KPIs track the financial success of a business. Revenue attribution metrics track paid conversion leads per source and leads to sales conversion. Conversion quality metrics track activation to sales conversion, sales, revenue, and average order revenue.
In conclusion, measuring KPIs is critical for e-commerce businesses and any digital transformation. It allows them to track and analyse their performance and make data-driven decisions to improve their business. By focusing on the five critical areas of KPIs, companies can stay on top of their performance and achieve success in the highly competitive world of e-commerce.
