The Best KPIs for Measuring the Performance of an Ecommerce Business
Scorecards and KPIs You Can Download and Use to Streamline Your Company
Why are scorecards and KPIs your best strategy for measuring performance of an eCommerce business?
Generating profits and increasing your bottom line is one way to measure your success as an eCommerce company. However, you need more clear-cut steps to reach these goals. We’ve identified the best KPIs for measuring the performance of an e-commerce business when you need to identify and improve your business’s specific elements to promote growth.
To ultimately enhance your profits, it’s essential to track and measure each activity-based event on a weekly basis, whether it’s associated with operations, finance, or sales and marketing. Using an eCommerce scorecard and KPI for each element can get this done effectively.
Take the first step towards enhanced profits – implement strategic tracking and measurement today!
Create Efficiency
Having consistent processes in place for each department in your eCommerce business should help increase productivity and efficiency. Having everyone understand and follow each process makes it more straightforward to identify and ultimately solve any issues when they arise. No business runs smoothly all the time. However, removing any obstacles and tackling issues can help provide solutions quickly.
Being proactive and initiating actions to optimize your processes can increase value for your business and customers. It’s an excellent way to implement measurements and allow you to track progress and document each success. Here are some of the best KPIs for measuring the performance of an eCommerce business in your operations, finance, sales and marketing departments:
Get Effective Operations
Having a customer order a product and having it arrive late can hurt their impression of your company. To ensure this process is streamlined, it can help to implement and track these eCommerce KPI metrics:
- Inventory turnover: Examining the inventory turnover in your business and how it links to your supply chain is directly correlated to your ability to produce sales. Taking a deep dive into this KPI can be done by measuring each area of the process.
- Storage and processing time: How long does it take for an order to be picked and processed? Having your inventory organized and a method in place for packing each box can speed this up.
- Shipping: Getting your orders shipped quickly involves how they are delivered to a carrier, and the type of carrier you use. Tracking for this eCommerce KPI can be measured to determine if one carrier is better than another.
Setting up eCommerce KPI metrics for factors in your marketing and sales department makes it possible to track a number of areas that you want to improve. If you have a dedicated digital marketing team, we KPIs that are only related to digital marketing. If you have a blended sales and marketing team, their KPIs should be carefully chosen. If you get stuck, contact us about our business advisory services – where we help businesses set and reach their goals!
Here are useful eCommerce KPIs that will help you achieve business success.
- Organic search rankings: Having your online store rank high in the search engine results pages of popular search engines can build brand awareness. It should also provide a better opportunity to match the products you sell with targeted customers. Measuring your success with specific keywords by keeping track of them with an eCommerce scorecard can significantly improve this area.
- Cart abandonment rate: Every time a customer abandons their cart, it’s a lost sale. Having customers complete a transaction can be done by tweaking your sales page, layout, marketing, and promotions. Dividing your completed transactions by the total number of shopping carts created and multiplying this figure by 100 can give you this statistic. Knowing the stats in your industry can help you understand the average abandonment rate. If your numbers are too high, it may be due to 404 errors, payment processing problems, or high shipping costs.
- Conversion rate: This metric offers a big-picture look at your total conversion rate. Knowing the average rate for your industry will give you a target to beat. Looking at your data and examining the amount of traffic and click-throughs on each page may reveal elements that can be improved. This might include changing a call to action or writing better descriptions.
- Bounce rate: Measuring the percentage of visitors to your site who don’t go to any other pages measures your bounce rate. Tracking where the traffic is originating, such as social media platforms, direct links, or newsletters, should be noted. It’s also helpful to understand the average bounce rate for your industry.
- Customer satisfaction rating: Creating happy customers equals more sales. A satisfied customer is more likely to come back to your store and make another purchase. You can measure this KPI and create an eCommerce scorecard by asking each customer to review your customer service.
- Customer retention: Measure this to determine if your sales and marketing efforts are creating lasting customer loyalty.
- Net profit: Ensuring your revenue is higher than your expenses should help show if you’re staying on track with specific financial goals. Accounting basics play a key role in this element. Having access to current figures provides you with an eCommerce KPI you can track and monitor regularly.
- Customer lifetime value: This is one of the best KPIs for measuring the performance of an eCommerce business that’s more established. It examines the average net profit that can possibly be generated by one customer. Understanding what each customer is worth to your business may help make it more straightforward for you to know how much you can spend on advertising per customer.
- Customer refunds: Credit card chargebacks, exchanges, and refunds can take time to handle and reduce your bottom line. Tracking this eCommerce KPI and knowing the average for your industry can help you see if you’re selling a substandard product.
- Offer discounts: Incorporating eCommerce KPI metrics for discounts can help increase sales. Implementing discounts by taking off a specific percentage or dollar value should be measured to see if the strategy results in enough sales to offset any cuts given. You can also try incorporating a “buy one, get one free” discount, free gift, or free shipping.
- Average order value: Knowing how much money you’re making on each order is critical to track. If you can get customers to buy another product, it can bump up this average and increase your revenue in the long-term. Exploring ways to cross-sell and upsell other products can help influence a customer to purchase a related product. Looking for trends and exploring cross-selling and upselling can help you find a sweet spot to increase sales.
Implementing and utilizing the best KPIs for measuring the performance of your eCommerce business should help make it easier to hone your strategies. Having KPI measurement tools can allow your team to focus on accomplishing their goals and give them a sense of accomplishment when they reach their targets.
Using the right scorecard metrics offers decision-makers a way to gauge outcomes and performance. Remember to keep our KPI and scorecard guide in mind when implementing KPIs.
Personalized Scorecards
At Fusion CPA, we frequently engage with these metrics and would be delighted to help you explore their application within your company.