Impressions, clicks, and all those other key performance indicators (KPIs) can be seen with a lot of potential in analytics reports like Google Analytics, but ultimately, do those values give you insight into what’s really going on in your business?
It’s amazing to open Google Analytics and see 15,000 unique visits per month! But how many did they buy? How much did it cost you to get those visits in your online store? And how many times do those visits interact with your website before making a purchase?
What are key metrics and indicators (KPIs)?
The metrics are a statistical measure of an activity in your business, while the Key Indicators or Key Performance Indicator (KPI) are specific metrics that your business identifies as indicators or predictors of general growth. KPIs are usually more strategic, while metrics are more tactical.
Constant measurement, evaluation, and response to your KPIs allow you to stay on track and ensure consistent growth. KPIs and metrics work together.
A practical example would be: Imagine that new customer visits are one of your KPIs and suddenly that number begins to decrease. While KPIs identify that you have a problem, metrics will help you understand what is happening. Maybe due to a wrong URL on your website, a problem with your CRM, with a social media campaign or any other issue related to your business.
Let’s review the 3 relevant e-commerce KPIs that can be useful for your online store by Saeed Developer
The conversion rate is probably the most common KPI in any type of online business; this value is the division of sales captured between visits received. In other words, it represents the percentage of visitors who make a purchase. It is vital to analyze and take advantage of this information in order to define what actions you can carry out to optimize each area of action that allows you to achieve your objectives.
After understanding what the Conversion Rate is and what objectives you have to pursue, it is a good time for you to know some of the main factors that affect this indicator in eCommerce.
Design and usability (UI / UX):
The design and development process of your online store should be intuitive and easy to use, as it determines the levels of interaction between visitors and your products. So try to find a professional website developer who can really help you to develop your website according to your desire. The key is to keep the purchasing process as simple as possible, minimizing steps and maximizing ease.
Calls to action
This factor influences the Conversion Rate to the extent that your product pages are optimized to generate sales. You must show clear messages, timely information and other indicators that clearly tell your potential customer what to do to complete the purchase successfully.
You must understand what type of traffic you are attracting to your online store, know it and analyze it. What offers and channels bring you to my page? Is it my target audience? Are they new users or people who are already customers?
To get the most out of the Conversion, it is necessary to break down and analyze the pages that generate the most sales in your online store and the most effective traffic channels (SEO, SEM, social media campaigns, etc.).
- Cart abandonment rate
This ratio indicates the percentage of users who, after having added a product or products to their basket, do not finish making the purchase. It is important that this figure is the lower the better.
If the figure is high, it may indicate that the purchase process is not correctly optimized, from the product card itself, which does not show all the information, to the lack of flexible payment methods, with solutions such as allowing your customers to buy. Now and pay later.
Here are some of the most common reasons for the churn rate:
- Lack of product information
- Slow website
- Expensive shipping
- No free shipping
- Unawareness of shipping costs
- Slow shipping
- Complex purchase process
- Bad user interface
- Customer lifetime value
The lifetime value of the customer, Life Time Value (LTV), is the estimate of the revenue you expect to obtain per customer during its life cycle. Or put another way, it is the total benefit that the client will generate throughout the duration of the business relationship. To calculate the LTV you must multiply the average customer spends by the relationship time and the number of purchases made. Actually the uses of computer now days more and more we are relating on computers from borders to our living are now on computers.
This is one of the most complicated indicators to calculate, but you can use average data from your online store to obtain it. The great advantage of measuring the LTV of your online store is that you can plan long-term strategies and actions; In addition, it is possible to discover buying patterns of your customers and to organize sales tactics.
KPIs are key indicators that will be useful to you and will help you make better decisions in your digital strategy. Each business has its own KPIs, these are 3 of the most common for online stores, which will help you make quick decisions in your business.
If you need help to increase the performance of your online store and improve your KPIs, do not hesitate to count on us.