KPI eCommerce: what are the most important indicators?
To monitor an online business it is not enough to observe
the number of sales, but it is necessary to rely on useful parameters to establish
if the strategy used works and if they give room for growth.
To observe the progress of a web project it is essential to
monitor the KPIs, i.e. the Key Performance Indicators.
These indicators are useful for understanding if an online
sales business is bringing profits, customer satisfaction and in what
way. An eCommerce will have its own KPIs based on specific needs, in fact
we will see that there are many.
What are KPIs?
The performance indicators, indicated precisely with the
acronym KPI, are numerical and quantifiable parameters, which consist of useful
data to measure the performance of an eCommerce activity according to
pre-established objectives. They are generally used for any type of business
and vary according to the type of business. By collecting these parameters,
marketing strategies are then planned.
Why use KPIs?
KPIs allow you to evaluate your company, as well as the
sustainability of your business model.
An online store generates a lot of data, but not all of them
are essential: a lot depends on the target market, the segment, the size of
your company and the intended results. For this, it is necessary to define the
reference KPIs useful for achieving the objectives.
The first performance indicators concern the performance of
your e-shop and its visibility . If you want people to buy from your eCommerce,
they need to be able to find it. You can use specific measurement tools to
access this data:
traffic and number of
unique visitors;
the time your customers spend on a particular page;
the bounce rate .
Which KPIs to choose for an eCommerce?
If we had to analyze and take into consideration all the
existing performance indicators we could stay here for weeks or months,
considering that they exist in practically infinite quantities and every day
different ones are born to meet the new needs of the activities.
But there are certain KPIs that are useful for evaluating
the performance of an online shop which cannot be ignored. Let's see the main
ones.
Number of sales and average cart
The first parameter indicates the number of sales in a
certain period of time, while the second is useful for identifying the average
value of each transaction, which is obtained by dividing the total revenue by
the number of orders placed in a certain period of time.
Conversion rate
This is one of the most popular KPIs. The conversion rate,
not surprisingly, is very useful for determining the effectiveness of an online
sales activity, indicating the conversion rate.
To calculate the percentage, simply divide the number of
actual customers by the number of visitors, multiplying by one hundred.
ROI
Acronym for Return On Investment, it is the rate of return
on total investments. This means that the ROI indicates how profitable a given
investment is or not.
The ROI calculation is obtained by dividing the operating
income by the invested capital.
Cart abandonment rate
All eCommerce managers have to deal punctually with the
abandonment of items in the cart. In any case, this behavior is an indication
of interest on the part of the user, who, for some reason, has decided not to
terminate or postpone the purchase.
If the dropout rate is high, it will be necessary to
intervene to understand the causes.
KPIs to measure User Experience (UX)
Some KPIs are used to identify interactions with their
customers and to know their preferences and purchasing habits, in order to give
the best experience. UX indicators are more complicated to identify as they
correspond to qualitative data, which will then be transformed into numbers for
analysis.
These KPIs are divided into behavioral and attitudinal
Behavioral KPIs
These indicators express how a user interacts with a product
or website through:
Task success rate : Task success rate is the percentage of
tasks successfully completed by users. This is probably the most used
performance metric that reflects how effectively customers are able to complete
certain tasks.
Time on task : This metric measures the average time it
takes a user to complete a task, expressed in minutes and seconds. The lower
the figure, the better the user experience will be even if there are exceptions
based on the objectives. For example, if the intention is to keep the user more
engaged, such as staying on the Facebook news feed, longer uptime might be
better.
Use of search vs. navigation : this is a useful metric for
evaluating the efficiency of the architecture and navigation of your website,
providing data on the number of users who use the search bar. Generally, this
indicates a navigation difficulty.
User error rate : This metric is useful for detecting any
errors during navigation, providing an idea of how easy your website is to
use. The higher the score, the greater the number of usability problems.
Attitudinal KPIs
Key attitudinal indicators are generally more difficult to
collect, but equally valuable in customer buying behavior analysis as they
quantify lifetime value, retention and loyalty.
CSAT, Customer Satisfaction Score . This parameter measures
customer satisfaction and is part of those best practices that aim to increase
the number of customers who repeat their purchases.
NPS, NET Promoter Score. It measures customer loyalty in
response to a direct question that is usually asked in these terms: "How
likely is it that you would recommend this company / product / service /
experience to a friend, relative or colleague?"
SUPR-Q. This is a questionnaire consisting of eight elements
useful for measuring the quality of the user experience on the website.
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