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 min read
January 3, 2017

Primal Metrics & KPIs to Thrust E-Commerce Companies Upwards


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E-commerce companies need a slightly different way to compute their success. A Key Performance Indicator (or KPI) is a quantifiable metric by which these companies can gauge the performance of their commercial enterprise. It helps monitor progression, digression or regression, and helps you understand where and when you need to make amends to reach your goal.

Depending on the type of company you run and the specific destination of that company, there are many many many KPIs and sub-KPIs you will need to employ. Like, increasing a percentage of sales by a certain time frame, increasing footfall and conversions, reducing drop-offs and the number of customer calls etc. However, in this blog we highlight a few important ones that are standard across the realm of e-commerce.

To begin with, here are two things you need to get started with:

  • Have a system in place to consolidate and analyse data which is needed to measure your KPI.
  • Set up your KPIs accurately and monitor them constantly.

Important KPIs:

Website Footfall: All the people visiting your site

By understanding the traffic on your website you understand how many new people have visited, and the extra sales they delivered. Additionally, gauge the amount of time they spend with you. You also see patterns in where they drop off, and can analyse it for change. Include all viewers – direct, referral, social media, pay-per-click traffic and so on.

Conversion Rate: The percentage of visitors becoming buyers

You can calculate this by dividing the number of buyers by the number of visitors. For instance, say 30 people purchased products out of a 1000 who visited during a particular period. So 30/1000 multiplied by 100 gives you 3%. It’s important to have a good conversion rate. At the end of the day this translates as sales per effort!

Repeat Customer Rate: People who come back to shop with you

This is the percentage of loyalty and love (if you will). You can gauge this percentage by dividing the number of returnees by the number of newbies in a given time frame. This number must look good because it is your lifebuoy and anchor and the wind in your sales.

Average Order Value: How much patrons spend on average

Simple maths: total order value divided by the number of orders. If this is low it means you aren’t making much of a return per customer. And vice versa.

Customer Lifetime Value: Your relationship with your patron

This is a spin-off from repeat customer rate. It is how much value a person is to your business for the entire duration of their association with your company. Using the current monetary value they offer as the premise, you can project the profitability of the relationship.

Customer Services Requirement: An expedient or a crutch?

Evaluate how many customer service calls, e-mails or chats are being done or are in progress. On the one hand you need to provide excellent customer services and have a good average resolution time. But on the other hand your customers shouldn’t be faced with so many difficulties that they swamp your customer servicing people.

Study the performance of your company à Make decisions based on those analyses à Use KPIs to execute your purpose à Enjoy better results.

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