If you have an online business or work with clients who have online businesses, you likely already know the importance of tracking metrics.
But when there are potentially hundreds of trackable metrics, how do you decide what to prioritize? What’s the best strategy for e-commerce metrics, and how can you simplify your system?
Read to find out the top e-commerce KPIs and how to pick the metrics that work for you.
What Kinds of Metrics Do You Need?
E-commerce is a whole different animal when it comes to tracking metrics and setting KPIs (key performance indicators). While you might see some crossover terms like conversion rate and impressions, the way we define these metrics in e-commerce are different than how we define them in social media or other mediums.
The key to having a solid e-commerce KPI strategy is simplicity. With so many possibilities, it’s best to narrow down your goals and choose KPIs that specifically drive your priorities.
The goal of all e-commerce is to complete sales, but you have secondary goals that are part of how you make that main goal happen. For example, if you’ve noticed you have a drop off from social media clicks to add-to-cart clicks, you would set the goal to improve conversion rate. Or if you find people are leaving a lot of items in their carts, you’d work to improve your cart conversion rate.
Here are some other common goals you can think about for e-commerce.
E-commerce Goals
Your goals should always be specific to your brand and brand category and based on the data you see.
Improve Cart Conversions: Consider setting this goal if your data shows you have a high cart abandonment rate – if customers are shopping, liking products, then leaving them in the cart when they check out. Or worse, abandoning their cart altogether.
Optimize pages for Search: If you’re getting plenty of site visits but find customers aren’t hitting “add to cart” or leaving from your home page, think about optimizing your in-site search. It’s possible they aren’t able to find what they’re looking for.
Build Customer Loyalty: This one is a little trickier and harder to measure. Return customers, social media engagements, and positive reviews are all indicative of customer loyalty. You can choose how you measure customer loyalty – we suggest picking a KPI and sticking with it over time to accurately measure this goal.
Increase Page Traffic: This is pretty straightforward. If you want people to shop on your site, you have to increase page traffic. You can choose KPIs that measure visitors, acquisition, and more.
But what if you have all these goals and more? That’s okay, too. While we recommend simplifying your goals and strategy, you can aim for multiple goals and attach multiple KPIs to them – just make sure each goal is aligned with specific KPIs and create a system that ensures they are separate and organized as you track them.
So what e-commerce KPIs can serve these goals and more? See our recommendations below.
Our E-Commerce KPI Recommendations
These top e-commerce KPIs can help you meet your goals. We've assembled our top 10 but there are many more that can help your brand thrive.
- Conversion rate. A conversion rate is the number of people who take action on your site versus the number of visitors. The conversion rate is one of the top KPIs you need to focus on no matter your goals.
- Cart abandonment rate. This is when people add items to their cart and don't check out. This can show success or failure in your checkout process and the ease with which customers can navigate your site.
- Checkout abandonment rate. This is different than cart abandonment since it happens later in the process, usually when people have to begin inputting information. Tracking this KPI can help ensure you're getting customers to the last and most important part of their journey, the actual purchase.
- Time on site. Tracking the time customers spend on the site on average will help you see how satisfied people are with the experience and the ease of your customer journey. (You might also consider tracking metrics like bounce rate to see when and where customers exit your site).
- Customer return rate. Of course, you need happy customers who return again and again to use your site and buy your products. Repeat customers are a great indication that you're doing something right, and can be helpful for you to build loyalty programs or offer other incentives.
- Average order value. An average order value is the average each customer spends on an order. High and low AOVs can tell you a lot about how customers view your site and product.
- Net/Gross profits. This one speaks for itself. Any business needs to track net and gross profits and an e-commerce site is no different.
- Cost per acquisition. The "CPA" is an extremely important e-commerce KPI. It measures the total cost of getting a customer from the first touch point in your funnel.
- Customer acquisition cost. This is the total cost of acquisition of each customer who completes a purchase.
- Return on investment. ROI measures how well your marketing investments have performed. You'll use ROI often and it'll come up whenever you implement campaigns or initiate ad spend.
Ready to implement your e-commerce KPI strategy? Contact us now to talk about how we can work together.
