5 KPIs You Should Follow to Have a Successful High-Converting eCommerce Store
The popularity of eCommerce can be explained by many factors. Simplicity is one of them. In alignment with the idea of simplicity, this post will focus on a few simple KPIs for eCommerce operators. So, what's simple about eCommerce? It is easier to set up a site than it is to find a perfect location and pay tons for decorating and premises. It is much easier to let the technology do the checkout. And it’s never been easier to measure your KPIs and or identify major problems.In fact, you have all the needed data. You can measure how successful your advertisement was to the point where you know how many people looked at it, ignored it, or visited your page. Would it be possible with big banners or ads in a newspaper? You can measure how many customers keep coming back to your shop. Would your shop assistants be able to remember all of their faces and tell who is new and who is not?
Importance of KPIs for eCommerce Business
These are the smallest examples of how accessible key performance indicators (KPIs) are in the eCommerce store. However, it also brings a certain feeling of “there is a lot and I do not know where to start.” In some blog posts, you can find up to 70 KPIs that are absolutely necessary for the growth of your store. That is quite a lot. You will probably need support from dozens of people in order to address so many business factors.In this blog post, we will distill these factors into five main KPIs that you should follow to have a successful high-converting eCommerce store.We will also talk about how to use the information that you get from that measurement and the best way to boost your KPIs for eCommerce. After all, analytics aren’t just about numbers; they are about knowing when something is wrong and uncovering areas you can prioritize to fix issues as they arise. Remember to invest your time in interpreting your data and you will have a truly amazing eCommerce store. With no further disclaimers and warnings, let's get started!
Cost per Acquisition (CPA)
“One of the most important goals of any eCommerce business is to have clients who are buying their products. You may have the most valuable product and the most user-friendly and beautifully designed site, but there is literally no point in your store if there are no people to see it. There will be no revenue or growth,” says, Jared Williams, director of marketing at Essay Tigers. So we all try our best to become noticed by customers.In order to attract new people, we usually spend money on advertisements, email campaigns and so on. However, it does not mean that everyone who sees your ad will definitely buy from you. Sometimes your ads costs are much higher than your revenue. That is a signal that you are doing something wrong.Check if:
You’re targeting the right location
Your campaigns drive traffic (if they do not, do not hesitate to stop them)
You retarget users who abandoned the shopping cart
Your website does not need any fixes (speed, cross-device compatibility, cross-browser compatibility, etc.)
You optimize strategically
Those factors are not hard to check but they will surely help you perform better. You will not have to put so much money into ads and get more customers at the same time!
Sales Conversion Rate (SCR)
Sometimes people like your ads and adore your blog but they never buy anything. This audience is ripe for targeting by your marketing and sales team. In order to measure SCR, you will need this formula:Total Number of Sales / Total Number of Leads x 100In order to turn a lead into a customer you have to:
Respond as quickly as possible to an online query
Make a distinction between different types of leads: new leads, existing customers, and former customers
Connect with customers all the time—if they are not ready to buy yet, they might be in the future
Make sure you show them how your product fulfills their needs
Know your best strategies and do not hesitate to use them repeatedly
Let’s say a customer has finally decided to buy something from you. They add numerous products to a shopping cart and then, suddenly, they leave your site completely and never return. This is a huge disappointment, especially when you realize how much money you could have made. Here are some common reasons consumers abandon their carts, and suggestions for addressing these:
The customer does not trust your payment system. In this case, partner with companies that are trusted by other big eCommerce brands.
A customer was turned off by shipping costs. Consider offering free shipping promos to re-engage these customers.
The checkout process is way too difficult. Make the process as simple as possible, and give an option to checkout without an account registration.
The shopper just browses your website. Add a timer to create a sense of urgency.
Technical problems bog down the shopping experience. Notify your IT department to address the issues.
There are not enough payment options. Offer a variety of trusted payment options so your customers can pay their preferred way.
We have already learned that attracting traffic and turning leads into customers is not an easy task. Therefore, we might as well do our best to get everything possible for one single customer. It is much cheaper and easier to do. To calculate your average order value, you only need to divide total revenue by the number of orders.To help your customers believe they need more, you can:
Cross-sell (do you need a lip gloss to your eyeshadow?)
Up-sell (this phone costs just $50 more but the camera is on point)
Create a volume discount (get 3, pay for 2)
Offer free shipping (no need to pay for shipping if your order is more than $20)
Promote coupons (spend $100 and get 10% on your next purchase)
Customer Retention Rate
It is easier to get an existing customer to buy from you again than it is to attract a new one. If your product was good and shipping was fast enough, they will surely get back to you later and give you a shout out to friends on social media. There are a couple of tips that will make the probability of next purchase higher:
Have helpful customer service, in case things go wrong
Offer them a discount for coming back
With this list of the five most important KPIs for eCommerce, you can quickly measure the essential factors to ensure a profitable eCommerce business. Though the list may seem small, each of these factors will keep you busy with execution. Consider different methods to increase your KPIs. And of course, don’t forget to thank yourself and your team for all the hard work and hours of analyzing the data.Image Source: houseofknowledge.org
About the Author
Stacey Wonder is a content marketer who enjoys sharing best practices for self-development and careers with others. In her free time, Stacey is fond of contemporary dance and classic French movies.