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How to define KPIs in an e-commerce strategy

11/02/2016 - Jordi Ordoñez

KPIs are key performance indicators that are designed so we can visualize how a business progresses and meets objectives. In e-commerce we can quantify these goals in different areas like sales, logistics, or customer service where the output of our strategic performance plan will be reflected.

Hello again! I’m Jordi Ordóñez, I’m sure you know me from other posts like “Web analytics: What you can’t measure, you can’t improve” or the series “Steps to set up an online store”. Today I’m bringing you the good stuff as far as web analytics goes. We’re going to define the main e-commerce KPIs but also keep in mind the different areas. for e-commerce keeping in mind different areas:

  • Sales Performance / conversion, transaction and life time value
  • Marketing
  • Service
  • Logistics and supplies
  • Navigational

 

goals

Sales performance, conversion, transaction, and LTV KPIs

Here I will group together the indicators that can give us an idea of if we’re doing well in terms of sales and of purchase repetition and frequency. The KPIs to keep in mind are:

  • Average ticket
  • Tickets that don’t reach the minimum for free shipping.
  • Average time allotted per order
  • Conversion rate: This isn’t a good indicator; we have to keep in mind that not everyone that enters your store wants to buy something, meaning it would be better to define the conversion rate in users that have shown a particular interest (they’ve looked at more than two product sheets) or those that have entered the checkout funnel.
  • New orders
  • Recurring orders and frequency of recurring orders (this allows us to create client clusters according to their order frequency). A good KPI would also be to see if there are increases or decreases in those recurring purchases to see if the client has gone to the competition.
  • Total transactions and income
  • Change in costs of purchase per customer.
  • Cart abandonments, exits from checkouts, and funnel abandonment in general.
  • Sales and sales periods (daily, weekly, monthly). Here we can assess sales per hour or fractions of an hour, depending on the number of orders we have.
  • Average number of products, ie what is the average number of items customers order.
  • Errors in payment methods that result in incomplete
  • Cash on delivery and unpaid or incomplete bank transfers
  • Unopened postal transactions

 

Traffic capture and marketing KPIs

  • Sole visitors and returning visitors
  • Time spent on the site from users that have a less than 40% rebound rate
  • Categories viewed per visit
  • Products viewed per visit
  • Number of users that enter a category versus users who enter a product page
  • Main traffic sources (SEO, PPC, Email, Direct, Referral, Social, Membership, etc)
  • Main traffic sources versus conversion sources
  • Main source of direct orders
  • Main sources of indirect orders (by order channel contribution)
  • Number of visits / conversions coming by brand searches versus those that aren’t by brand
  • Followers on social networks
  • Traffic on parallel sites (blog, for example)
  • Blog: number of posts read
  • Blog: number of posts read that resulted in a visit to the store and / or a sale
  • User engagement on the blog (by shares on social networks and comments on each post)
  • Days and hours of peak traffic and conversion
  • Days of the month when people buy more (to see if we have peaks at the beginning or end of the month, for example)
  • Number of newsletter subscribers

 

Service KPIs (customer service)

  • Chat sessions started, completed, and that have ended in placing an order
  • Average problem solving time via chat
  • Emails received
  • Emails answered
  • Emails with positive feedback
  • Emails with negative feedback
  • Calls received at customer service
  • Calls answered by customer service
  • Calls received with positive feedback
  • Calls received with negative

 

Navigational KPIs

  • Abandonment on pages important for the transaction
  • Unseen blog content
  • UX problem analysis by device: desktop, tablet, mobile
  • Search engine uses
  • Conversions resulting from using the search engine
  • Top search words
  • Users that use the search engine and don’t convert (don’t find what they’re searching), data that we can also take from customer service

 

Logistics and procurement KPIs

  • Out of stock and unsent orders
  • Out of stock and backorders
  • Orders delivered late
  • Orders delivered early
  • Broken orders
  • Lost orders
  • Returns
  • Reasons for return

 

And, since I am by no means an expert in logistics, I leave you with the KPIs that define this post, which, to me, are phenomenal 🙂

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