Must-Know E-commerce KPIs for Optimizing Sales and ROI
The performance and success of your e-commerce store depend on many factors. You start with your website and proceed with marketing, SEO, payment providers, shipping, customer support, analytics, social media, legalities, and optimization.
At some point, you will ask yourself, am I being efficient?
Enter the operational Key Performance Indicator (KPI); these help you track the performance of your online business against your set goals and objectives.
KPIs for E-commerce Optimization
KPIs provide a way to control costs and manage time, materials, and labor, which form the heart of operational efficiency.
Here are categorized KPIs relevant to your e-commerce business.
Website and Platform Performance
Uptime: Monitoring your website's uptime on your hosting setup to ensure your site is accessible 99.99% of the time is an important metric. Most hosting providers alert you should there be any service disruptions. Bigger stores generally run their hosting servers and have a team to manage them.
Conversion and Bounce Rates: Conversion rates measure the percentage of visitors who have made a purchase; the higher, the better. Bounce rates measure the percentage of users who leave your website after viewing one page; the lower, the better.
Cart Abandonment Rate: Sometimes, customers may add products to their cart and forget to complete their purchase. There could be a list of reasons why this happens. By measuring this KPI, you will know how often. You can implement email reminders or coupon codes to entice them to complete their order once you have the data, saving you a missed sale.
Product Availability: Popular products must be in stock and available for purchase. Otherwise, it would lead to frustrated shoppers and diversion of web traffic. Measure the percentage of time it is in stock with this KPI so you can always capture that sale.
Product Profitability: Calculating the profitability of individual products considers the cost, pricing, and sales volume. This KPI will help you decide whether a particular product is a good fit for being featured or for marketing purposes.
Return Rate: A generally good indicator of customer satisfaction and product quality is the Return Rate. Measuring this KPI will let you understand how well-received your product is and why customers rejected it.
Support Response Time: Whether by email or your call center, the time it takes to respond to a customer's inquiries is an essential KPI. The shorter time recorded for a reply, the better.
Customer Satisfaction: Overall satisfaction considers many variables, from how easy buying is to how fast delivery and care are.
Customer Churn Rate: Probably the most dreaded of all KPIs, the churn rate measures the percentage of customers who stop purchasing from or visiting your e-commerce store. Understanding when and how often this happens helps you understand customer behavior and could help you develop a solution.
Payment Processing and Checkout
Payment Method Usage: Every customer will have their payment preferences; some may like to pay with credit cards, others with digital wallets, and some may use providers like PayPal. Measuring this KPI helps you increase the shopping experience and reduce abandoned carts.
Payment Processing Time: The amount of time it takes for your customer to complete their purchase is an important KPI. Nobody likes to wait to complete an order. Measuring this KPI helps you improve conversion rates (as fast checkouts mean happy customers) and builds customer trust, which is also attributed to the purchase speed.
Payment Error Rate: Transactions can get errors for any number of reasons. Whether it is on the client's side or your payment provider who may be having an issue processing payments, you need to be aware of where the errors are coming from. Measuring this KPI will help you reduce abandoned sales and keep customers' trust.
In summary, KPIs can be varied; they may be qualitative, quantitative, predictive, or analytical of your past.
Using them for your e-commerce businesses would allow you to gain a comprehensive view of performance, make data-driven decisions, and continually work towards optimizing operations and achieving goals.
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