Guess what? Only tracking site traffic, average page views, conversion rate and a couple more KPIs like time on site is simply not enough if you want to understand your customers and ultimately sell more.
The point of this article is to help you discover (other) valuable metrics and how to use them to increase sales, not just list a bunch of generic KPIs. But let’s address the elephant in the room first:
80% of online retailers don’t use their #analytics sufficiently or correctly according to eConsultancy. * Tweet This
Most eCommerce entrepreneurs I’ve talked to usually obsess about a few generic KPIs like site traffic, average order value and conversion rate. While few have experienced & able-minded marketers who keep an eye on very specific metrics, most struggle to find the time to dig deeper into data and determine the best course of action.
That being said, let’s jump straight into the list of KPIs relevant to eCommerce businesses.
1. ROI: return on investment
The supreme KPI. Period. Most marketers (me included) tend to boast about things like 100%+ traffic & conversion rate incre, but shy away
ROI should be calculated and tracked constantly both per marketing channel and globally, so you can have a baseline to compare campaign/channel performance with.
2. Cost per conversion
How much does a new conversion actually cost (should be tracked per channel as well)? Also, do not confuse it with customer acquisition cost.
3. CR: conversion rate
Conversion rate is the #1 obsession of eCommerce marketers / entrepreneurs. Maybe you’re secretly ashamed of a 1.3% average conversion rate. Maybe you’re assuming your competitors are doing so much better in terms of conversion. Well, you’re not the only one and conversion rate can turn out to be a horrible metric to focus on.
About 1/4 of all Adwords accounts have less than 1% conversion rates. The median was 2.35%, but the top 25% of accounts have twice that – 5.31% – or greater. Source: WordStream* Tweet This
Out of 2,912 responses, we saw that overall conversion rates were most frequently less than 5%, with many responses below 1%. Source: MarketingSherpa* Tweet This
But, like it or not, it’s still going to be used as the #1 metric in eCommerce for many years to come.
3 steps to approach your conversion addiction:
1. Benchmark it. What’s the industry average?*
2. Get out of the site-wide conversion rate mindset. If you’re going to focus on conversion rate, make sure you slice it and analyze:
- Conversion rate by traffic source and even channel
- Conversion rate per visitor type (new vs. returning)
- Conversion rate per device type (hint: pay more attention to mobile)
3. Strike a balance between strategically growing traffic and doing conversion rate optimization. The truth is that CRO can eat a lot of your time and resources and some times increasing exposure is more profitable. That’s mostly because the law of diminishing marginal productivity applies very well to conversion rate optimization as an activity.
4. Figure out valuable secondary goals (live chat interactions, store locator visits etc.), assign value to them and track these micro-conversions.
* If you’re unfortunate enough, you will not find data on your niche. Also, take every stat you find online with a pinch of salt. Most are made up, inflated or extracted from specific scenarios.
Ideally, you’d want to have the lowest possible bounce rate, but that’s simply not going to happen.
“It’s not you, it’s me.” One’s first reaction to a high bounce rate would be to make various changes to the page / website in order to make it more . My advice is to segment first: see what channels . It’s a known fact that social media visitors
4. AOV: Average Order Value
AOV = Total sales revenue / Number of orders
AOV is a very valuable metric we should focus on. The average order value . Ideally, this should be tracked alongside average # of products ordered.
Unlike other metrics we can influence, there are many tactics to increase average order value with very few potential downsides. I’ll cover this one in a separate article, since it’s relevant to eCommerce sales tactics.
5. Pending transactions
How many carts are just waiting there for the user to come back and go to the checkout? What are they worth?
Quick tip: determine what products have a higher than average add-to-cart rate, but don’t end up purchased and then test various promotions on them.
6. Shopping cart abandonment rate
After trying to get visitors to finish their order through remarketing, reminder emails and other tactics, you’ll still have a lot of abandoned shopping carts. I usually set a 30 day limit until I consider a shopping cart abandoned. The chances that the order will be placed are incredibly low for most online stores.
7. Checkout abandonment rate
Your first thought here is probably: why split the whole abandonment issue into 2 KPIs? Well, for starters, it’s much easier to figure out where the problems are. Most people pass the blame onto the checkout (which is usually true) and it’s usually true, but the checkout abandonment metric should include only that segment that actually made it to the checkout page (some calculate abandonment as % of people who added products to the shopping cart and have not finished the order, which can be misleading).
8. Repeat purchase rate
How many % of your customers are repeat customers? This is one of the most important stats you can track and you should do your best to increase the percentage of repeat customers through available marketing tactics.
9. Time to purchase / visits to purchase
Knowing how much time it usually takes for a new visitor to purchase on your online store and/or how many visits it usually takes allows you to fine tune your campaigns (especially when it comes to remarketing & email marketing).
10. Customer satisfaction index
This is one of the few KPIs you can’t track automatically, but it’s vital that you constantly know how the satisfaction levels of your current customers. Sending out a customer satisfaction survey a couple days after the order was received should be enough.
11. Unique visitors
12. Repeat visitors
How many of your visitors are repeat visitors? Ideally, more than 1/3 of your traffic should consist of repeat visitors. And don’t forget to reward those repeat visitors.
13. Purchase intention
You’re not going to like tracking this KPI, but it’s important to determine how many % of visitors actually have a purchase intention. There are various methods of determining the % of audience with a purchase intention, but the simplest way consist of segments (referring to Analytics) built with rules such as: “has viewed pages X, Y, Z”, “has completed goal X” etc. Not a very exact method, but it’s a quick’n’dirty solution that gives you an insight on how much of your traffic actually has a purchase intention.
14. Page views per visit / product views per visit
Page views per visit fits into the “nice to know” category of metric and can turn out to be misleading and/or irrelevant, especially if you invest heavily in content marketing. An increase in page views does not necessarily translate into more sales.
On the other hand, tracking product views per visit is a more useful approach, as it can be used as a good metric for optimizing product navigation / merchandising techniques. For example, I’ve tested a completely different category view / display style for one customer, which had a very positive impact on product views per visit and translated well into actual sales in the following months.
15. Bounce rate (top pages)
The main reasons for high bounce rates are usually: the lack of compelling content, an ineffective call-to-action (or too many) and…unqualified traffic. Figuring out the reasons for a high bounce rate (above 60%) isn’t always straightforward, but tools like KissMetrics & CrazyEgg can help you do wonders for conversion & user retention.
16. Exit rate (top pages)
Pages with high exit rates deserve your full attention, especially if they highly trafficked pages. With so many different reasons to leave, it’s up to you to determine at page level why visitors didn’t go further down the funnel. There are many cases in which analyzing pages with high exit rates can provide valuable insights. For example, a high exit rate on specific FAQ pages may show that the user has discovered a deal-breaker that changes his mind and leaves.
17. Average time on site / page
While average time on site doesn’t tell you much, but time on page can be useful if you compare it to the estimated time it takes to go through the content. Also, you can compare similar length products’/pages’ average times to determine what content is more engaging (yes, consumption can be interpreted as engagement – most people do not share, comment, link etc.).
18. Day part monitoring
Monitoring can be useful in various cases, such as optimizing ad campaigns, setting live chat schedule (especially if you don’t have a full time person on live chat), launching new content or promotions at the right time etc.
19. Internal searches
Most eCommerce entrepreneurs that I ask: “How many people actually use the site search?” don’t have a clear answer. Tracking site search as a metric isn’t very valuable itself, but if the amount of people that use site search is large enough it makes it worth to track & analyze internal keywords & phrases used and apply other optimization tactics that may lead to more sales.
20. 404 visits
You’d be surprised how many people end up on 404 pages that are not personalized (or even tracked!!!). While you can’t stop this from happening every time, you can create redirects, design an engaging 404 page, integrate search in the 404 page and many more things to make sure you don’t lose that visitor.
48 percent of the most popular pins lead to expired pages on retailers’ sites. Source: Curalate
21. Visitor satisfaction
How would a visitor rate his experience on your site? There are a lot of tools you can use to gauge visitor satisfaction and they mostly consist of questionnaires that ask them to rate their experience. The most efficient tool I’ve worked with (that actually does more than simply survey) is Qualaroo. I highly recommend giving it a try.
From social to PPC, each channel has its own KPIs that should be tracked in order to improve overall performance, but let’s talk about the most relevant ones without getting sidetracked:
22. PPC conversion rate & cost per conversion
23. Newsletter open & click rate
24. Newsletter click rates
25. Newsletter conversion rates
Many newsletter get opened & clicked but fail to actually sell something. Although it’s tempting to only judge a newsletter’s performance by open & click rates, it’s still a standalone activity that must bring a positive return on investment.
26. SERP clickthrough rates
If you treat your meta’s lightly and don’t keep an eye on the clickthrough rates for various keywords you’re ranking, you’re going to have a bad time with organic traffic. Great on-page content is useless if your meta title & description is not compelling enough to make the user click.
27. Organic conversion rates
Everyone loves organic traffic. Keeping track of conversions from organic traffic is especially important because it allows you to optimize digital assets (landing pages mostly) that will bring a steady flow of new orders (as opposed to social traffic that tends to spike and go away).
Yes, there are a bunch more KPIs that would fit here, but these are the most actionable ones.
Micro-conversions were at one point the next big thing in eCommerce. The truth is most of your traffic will not end in a macro-conversion (mostly defined as an online purchase), but focusing on micro-conversions can yield significant results. The most common micro-conversions that eCommerce businesses track are:
28. Newsletter subscriptions
This is by far my favorite micro-conversion to play with. With so many tools and so many tactics to grow a newsletter database, keeping track of what forms, pages and incentives delivered the best results is…actually fun. Not to mention extremely profitable, as email brings on average 4
29. Social shares
The rate of social sharing is a very relevant indicator of your content’s popularity and can help bring traffic both directly and indirectly, by boosting search results positioning.
Even more, you can determine the average number of visits per share to determine how active/influential your audience is on social media. If you’re seeing an above average (average being 4-5 visits/share) number of visits per share, then you know your site audience comprises of influencers as well.
Additionally, you should discover and leverage your most shared products / landing pages by extending campaigns or integrating them in new ones.
30. Social follows
Depending on your strategy, the new number of fans/followers may or may not be a useful metric to track. Mostly likely it will fit into the vanity metrics category.
31. Address / contact views
32. Chat requests
33. Account registrations
34. Add to wishlist
35. Compare products
36. Product reviews
Never underestimate the foot traffic an online store can drive. If you’re selling expensive items and have a physical location, you can be sure that your online store will be used as a catalog and many purchases will actually happen in-store.
37. Rich media plays (videos, galleries, presentations etc.)
Quality rich media & interactive content increases conversion every time. Is the user interacting with it enough or is it overlooked?
When it comes to micro-conversion, this is by no means an exhaustive list. You can define your own micro-conversions. For some online stores that focus on the community building aspect, a forum registration, a forum post or a comment can be a valuable micro-conversion.
38. Average Lifetime Value (LTV)
I’m rather surprised how few eCommerce marketers/entrepreneurs use this metric. It’s understandable though: determining LTV can be quite tricky, especially if you don’t have much historical data. Nonetheless, knowing LTV is extremely important, as it allows you to create successful medium and long term strategies.
39. Customer acquisition cost (COC)
40. Cost of goods sold (COGS)
41. Average margin
42. Daily / weekly / monthly / quarterly / annual sales
These are just a few from a plethora of financial metrics, but they’re a must-have on your dashboard.
43. Number of complaints
Surprisingly, a large number of companies don’t track much when it comes to customer complaints and feedback.
44. Complaint classification
How many complaints / returns are related to quality? How many are due to shipping damages? And so on…
45. Number of returns
Returns cost money and are already the result of an expectation not being met. The fewer, the better.
46. Average resolution time
Ensuring great customer support isn’t cheap and if your support processes aren’t well optimized, your CS staff could be wasting time on operations that could be easily automated. That’s why you need to keep track of how long it takes to resolve a customer complaint and identify the bottlenecks (if any). Plus, well organized customer support will reduce resolution times, which is always a plus for the consumer.
47. Resolution outcome (positive / negative)
I think these are enough KPIs to keep you busy and inspired for now and hopefully I’ve convinced you to use more of them.
Me: I’m currently working on some other useful resources to help you save time and track the metrics that truly matter and a series of posts that focuses on optimization and conversion tactics. Subscribe to make sure you receive them.
You: Feel to contribute to the article in the comments section – what other KPIs are important to you? Also, sharing this article would be much appreciated!