5 MOST IMPORTANT KEY PERFORMANCE
Indicators for Enterprise eCommerce Platforms
Focusing on sales revenues alone in eCommerce cannot determine what is working and what is not working. Conversation rate is vital, and it all depends on the quality of traffic you receive. Or is it? But if you want to increase the sales volumes, you need to know the five most important key performance indicators for enterprise eCommerce.
Here, we will show you what KIPs metrics you need to measure that will help you know where your business is most successful and where it’s underperforming and what changes you need to make to increase revenue and build your customer base in the US, UK, and Austalia. Let’s dive right in.
How to Use KIPS
Using KIPs is relatively simple, you need to set some short, smart and measurable goals that you can easily reach. For instance, you can set a goal of increasing your sales by $800 every month. Now, that’s a reasonable and reachable goal. With this in mind, you can now monitor a handful of KIPs to monitor your business.
Here are some ways that KIPs can help you know if you’re meeting your business goals and objectives to generate more revenue for your e-store.
- Increased conversion rate – every eCommerce enterprise will encourage more visitors to make a purchase.
- Increase the average order value – You can entice your online visitors to spend more while they are making a purchase.
- Minimizing the cost for every acquisition – to have a sustainable business, you need to reduce those costs that you spend to acquire a customer
Important KIPs for Measuring the Performance of an E-commerce Business
Tracking eCommerce metrics in Google analytics will help you know where new customers and returning customers are coming from such as Facebook, Email, Twitter among others.
Not understanding your KIPS can make your online business stagnate and even make loses. As an eCommerce retailer, you need to understand KIPs to be able to pinpoint where your e-store needs to adjust in times of turbulence or take advantage of favorable winds for more speed. This guide gives you some insights into important eCommerce metrics that you can access through Google Analytics.
1.Average Order Value
You can generate more revenue from your e-store by inspiring visitors to purchase more products when they visit your e-store. You can improve the Average Order Value by including add-on offers in the checkout process to increase total order value. There are other incentives that an eCommerce enterprise can use like free shipping.
To calculate the AOV, you get the total sum of the revenue generated and divide it by the total number of orders. There are several ways to raise your AOV.
- Upsell – encourage your customers to purchase high-value products than what they are currently buying
- Product bundles – you can also focus on selling some products in a bunch which will help the customer purchase more
- Discounts – offer discounts on minimal spending threshold
2. Shopping Cart Abandonment
69 out of 100 customers abandon orders and leave the website before completing a purchase. To analyze this behavior, you can use the Google Analytics tool and view the shopping cart abandonment. In most instances, customers will abandon the shopping cart when they encounter additional fees. Therefore it is important that you find the best e-commerce shopping cart solution.
However, you need to keep this to a minimum since the same visitors can convert after an advertised retargeting and make a sale at the end of the day.
3. Revenue On Advertising Spend
The Revenue On Advertising Spend (ROAS) metric allows you to track the effectiveness of advertising. The analysis shows you the amount of income versus the amount of money spent on advertising. If you want to make your advertising campaigns effective, you need to increase the revenue on ROAS.
4. eCommerce Conversion Rate
A conversion can be anything from signing up a newsletter, watching a video or subscribing to a service. In eCommerce enterprise, visitors who take action and convert can tell you how effective the e-store is at encouraging passive visitors to take action.
Tracking micro conversions can help you meet your business goals. Micro conversions ultimately lead to macro conversions which allows you to end up with increased sales. By using Google Analytics, you can set up four different goals that include;
- Target destination – By picking this goal, you make your page view into a conversion metric
- Event – a visitor’s interaction with your website as a metric for conversion
- Time Span– you can track the time spent on a page as a metric for conversion
- Page or screens per session – you can measure the number of page views for conversion
5. Customer Lifetime Value (CLV)
CLV is the amount of return you can earn from a specific customer in their lifetime. This metric is vital in assessing market expenses on advertising for customer acquisition and will also help you measure how much you spend on average per customer.
Google Analytics allows you to see how different customers purchase your products through various channels through the lifetime value report. Additionally, returning customers are an essential metric in analytic data since they have a higher average order value. With CVL you can track where your returning customer is coming from, like social media platforms and Email marketing.
There are other ways you can advertise your site for increased sales such as coupon sites and tracking links to such offers. If you’re running paid traffic, you can breakdown the metrics into organic and paid to curl underperforming campaigns.
Bonus metric - Gross Profit Margin
Gross profit margin is the percent of revenue for actual profit before adjusting for operating costs like salaries, marketing and overhead.
These streamlined key actionable KIPs like average order value, revenue on advertising spend, conversion rate and shopping cart abandonment among others are crucial metrics that every retailer in the U.S, U.K, and Australia should be on the lookout if they are looking to meet their business objectives and generate more revenue.
Returning customers is also a vital metric that can help you leverage the opportunity of generating more income from the return customer. Tracking your KIPs can help your eCommerce business with everything from making more sales revenues, marketing, scaling and recruitment.