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Top eCommerce KPIs

Every online business process is characterised by 4 main phases: reaching qualified
prospects, engaging with them on site, converting their actions into sales/call to action, and
thus offering those services ensuring their brand loyalty.


Each phase has to be monitored analysing the historical (4-week, 3-month Moving Average
and %Y-on-Y) trend of bespoke KPIs.


Successful eCommerce websites use some variation of the following metrics to convert a
visitor:
    websites use some variation of the following metrics to convert a visitor:


                                                          Repeat


           REACH
                          ENGAGE
                        Landing Page
         Targeting &                           ACTIVATE
                        Effectiveness
         Acquisition



                                                        LOYALTY
                                  Modifying & Testing Hypothesis




   1. REACH


All eCommerce websites have as main goal to reach qualified prospects. Following the well-
known Pareto rule, roughly 80% of the outcomes come from 20% of the prospect – the
qualified one. Thus it is compulsory the analytics software to include segmentation tools.
The best KPIs to monitor at this stage are:


KPIs                        Calculation              Definition                  Reason

Visits to Purchase by       Total visits by AS       Shows the best traffic      Manage MKT campaigns to

Acquisition Sources         leading to a purchase    sources in terms of         focus on sources producing

                            on Total Visits by AS    likelihood of converting    the higher outcome

Cost per referrer           Total MKT cost per       Shows the best traffic in   Manage MKT campaigns to

Visits                      referring source/Total   terms of cost per visit     focus on sources producing

                            number of visits per                                 the lower associated cost

                            referring source                                     per visits
Visits to Purchase by      Total visits by Kw       Shows combination of          Manage SEM campaigns to

Keywords/Key               leading to a purchase    keywords (both                focus on Keywords

phrases                    on Total Visits by Kw    considering the quality and   combinations producing the

                                                    the quantity) in terms of     higher outcome

                                                    likelihood of converting


     2. ENGAGE


In eCommerce the term engage mainly refers to a set of measurements of the activities a
customer performs whilst interacting with the onsite marketing features. Typical old school
KPIs were: 1) Click-Depth: defined as the number of clicks your customers completes whilst
searching onsite, and; 2) Duration: usually defined as the average time spent onsite.
Whilst these KPIs are still valid, more sophisticate measurements have been developed for
describing how your qualified prospects engage with your site.


The starting point is the landing page which represents the first page a visitor encounters
after a successful search. Few eCommerce sites still consider as a landing page their Home
page. Whilst this may still be true for users who bookmark your site URL in their browser or
use your brand name as a search keyword, the majority of your visitors will experience your
site thought your product page, and so you should use this as a landing page.


The landing page must contain a call to action, leading the prospect visitor into the
beginning of the buying funnel.


To measure the effectiveness of individual landing pages, various calls to action, and
landing page designs, we need to monitor the following KPIs:


KPIs                       Calculation              Definition                    Reason

Landing Page Bounce        Total visits to LP by    Shows the lost opportunity    Manage MKT campaigns to

Rate by AS                 AS viewing just one                                    focus on sources producing

                           page on Total number                                   the higher depth of visits

                           of visit to LP by AS

Shopping Cart              Total number of          Shows the funnel drop-off     Show shopping cart room

Abandonment rate by        purchase by AS on        by AS                         for improvement both by

AS                         Total visits to                                        AS and Total

                           shopping cart by AS

Scoring Customer           Visits from high score   Show the effectiveness in     Manage MKT effort in

Segment ratios             customers as             attracting high score         attracting engage

                           proportion of visit      customers (likelihood of      customers, likely to be
from low score          buying the product in the     product CONNECTORS &

                           customers               next 3 days, sharing info,    CHAMPION

                                                   …)

Task completed Rate        Total number of         Shows the effectiveness of    For design purpose, help in

                           complete task on        call to action features (my   identify unnecessary call to

                           Total visits lending    basket, shipping costs, …)    action

                           page


       3. CONVERT


Conversion is the most important action in an eCommerce website, and occurs when a
prospect finally becomes a client.


The most important KPIs that we need to monitor are:


KPIs                       Calculation             Definition                    Reason

Conversion Rate            Total confirmed         Shows the percentage of       Revenues.

                           conversion on Total     landing page visits that

                           Landing Page Visits     ends with a sales

Cost per acquisition       Total MKT costs on      Shows the cost of             Used for determining the

                           number of sales         delivering one sales          most effective source of

                                                                                 traffic.

Average Order Value        Sum of revenue          Show the value generated      Usually this KPI is to be

                           generated on Number     per unit sold                 segmented by type of

                           of Orders Taken                                       buyers and helps focusing

                                                                                 on the high revenue group.

Days and visits to         Number of days/visits   Show how long it takes for    When segmented by AS, it

purchase                   before an action        a prospect to become a        adds insights on the most

                                                   client.                       effective AS.


The second area in this stage is cross selling. Any visitor, who decides to buy one item, is
receptive to buying multiple items. Once the initial questions are answered and trust
established, the process of cross selling is many times simply the effort it takes to suggest it
to the consumer.
4. LOYALTY


The eCommerce cycle doesn’t end with the purchase. After a product or service has been
successfully delivered, a series of services are offered to the customer to ensure their
stickiness with the brand.


As such, the KPIs that need to be taken into account are:


KPIs                         Calculation             Definition                   Reason

Visitor                      Number of time a        Shows the likelihood of      It gives us insight into

Loyalty/Recency              visitor visits your     visitors to stick to your    whether visitors have a

                             website in a given      brand.                       reason to come back

                             timeframe

My Account usage             Total number of visit   Show the likelihood of       Used to contained Call

                             to My Account section   clients in using My Member   Centre costs.

                             on Total Visits         help.

My Account CTR               Clicks to services on   Show the effectiveness of    Used to contained Call

                             Total visits to My      My member content.           Centre costs.

                             Account                                              Personalisation.

Email Open Rate              Total number of email   Show the likelihood of an    Improve upselling

                             opened on Total         email being read by your     capabilities,

                             number of email         customer.                    Personalisation.

                             received

Email CTR                    Clicks to services on   Show how effective the       Personalisation, Upselling,

                             Total email opened      email’s content is.          repeat buying.

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Top eCommerce KPIs

  • 1. Top eCommerce KPIs Every online business process is characterised by 4 main phases: reaching qualified prospects, engaging with them on site, converting their actions into sales/call to action, and thus offering those services ensuring their brand loyalty. Each phase has to be monitored analysing the historical (4-week, 3-month Moving Average and %Y-on-Y) trend of bespoke KPIs. Successful eCommerce websites use some variation of the following metrics to convert a visitor: websites use some variation of the following metrics to convert a visitor: Repeat REACH ENGAGE Landing Page Targeting & ACTIVATE Effectiveness Acquisition LOYALTY Modifying & Testing Hypothesis 1. REACH All eCommerce websites have as main goal to reach qualified prospects. Following the well- known Pareto rule, roughly 80% of the outcomes come from 20% of the prospect – the qualified one. Thus it is compulsory the analytics software to include segmentation tools. The best KPIs to monitor at this stage are: KPIs Calculation Definition Reason Visits to Purchase by Total visits by AS Shows the best traffic Manage MKT campaigns to Acquisition Sources leading to a purchase sources in terms of focus on sources producing on Total Visits by AS likelihood of converting the higher outcome Cost per referrer Total MKT cost per Shows the best traffic in Manage MKT campaigns to Visits referring source/Total terms of cost per visit focus on sources producing number of visits per the lower associated cost referring source per visits
  • 2. Visits to Purchase by Total visits by Kw Shows combination of Manage SEM campaigns to Keywords/Key leading to a purchase keywords (both focus on Keywords phrases on Total Visits by Kw considering the quality and combinations producing the the quantity) in terms of higher outcome likelihood of converting 2. ENGAGE In eCommerce the term engage mainly refers to a set of measurements of the activities a customer performs whilst interacting with the onsite marketing features. Typical old school KPIs were: 1) Click-Depth: defined as the number of clicks your customers completes whilst searching onsite, and; 2) Duration: usually defined as the average time spent onsite. Whilst these KPIs are still valid, more sophisticate measurements have been developed for describing how your qualified prospects engage with your site. The starting point is the landing page which represents the first page a visitor encounters after a successful search. Few eCommerce sites still consider as a landing page their Home page. Whilst this may still be true for users who bookmark your site URL in their browser or use your brand name as a search keyword, the majority of your visitors will experience your site thought your product page, and so you should use this as a landing page. The landing page must contain a call to action, leading the prospect visitor into the beginning of the buying funnel. To measure the effectiveness of individual landing pages, various calls to action, and landing page designs, we need to monitor the following KPIs: KPIs Calculation Definition Reason Landing Page Bounce Total visits to LP by Shows the lost opportunity Manage MKT campaigns to Rate by AS AS viewing just one focus on sources producing page on Total number the higher depth of visits of visit to LP by AS Shopping Cart Total number of Shows the funnel drop-off Show shopping cart room Abandonment rate by purchase by AS on by AS for improvement both by AS Total visits to AS and Total shopping cart by AS Scoring Customer Visits from high score Show the effectiveness in Manage MKT effort in Segment ratios customers as attracting high score attracting engage proportion of visit customers (likelihood of customers, likely to be
  • 3. from low score buying the product in the product CONNECTORS & customers next 3 days, sharing info, CHAMPION …) Task completed Rate Total number of Shows the effectiveness of For design purpose, help in complete task on call to action features (my identify unnecessary call to Total visits lending basket, shipping costs, …) action page 3. CONVERT Conversion is the most important action in an eCommerce website, and occurs when a prospect finally becomes a client. The most important KPIs that we need to monitor are: KPIs Calculation Definition Reason Conversion Rate Total confirmed Shows the percentage of Revenues. conversion on Total landing page visits that Landing Page Visits ends with a sales Cost per acquisition Total MKT costs on Shows the cost of Used for determining the number of sales delivering one sales most effective source of traffic. Average Order Value Sum of revenue Show the value generated Usually this KPI is to be generated on Number per unit sold segmented by type of of Orders Taken buyers and helps focusing on the high revenue group. Days and visits to Number of days/visits Show how long it takes for When segmented by AS, it purchase before an action a prospect to become a adds insights on the most client. effective AS. The second area in this stage is cross selling. Any visitor, who decides to buy one item, is receptive to buying multiple items. Once the initial questions are answered and trust established, the process of cross selling is many times simply the effort it takes to suggest it to the consumer.
  • 4. 4. LOYALTY The eCommerce cycle doesn’t end with the purchase. After a product or service has been successfully delivered, a series of services are offered to the customer to ensure their stickiness with the brand. As such, the KPIs that need to be taken into account are: KPIs Calculation Definition Reason Visitor Number of time a Shows the likelihood of It gives us insight into Loyalty/Recency visitor visits your visitors to stick to your whether visitors have a website in a given brand. reason to come back timeframe My Account usage Total number of visit Show the likelihood of Used to contained Call to My Account section clients in using My Member Centre costs. on Total Visits help. My Account CTR Clicks to services on Show the effectiveness of Used to contained Call Total visits to My My member content. Centre costs. Account Personalisation. Email Open Rate Total number of email Show the likelihood of an Improve upselling opened on Total email being read by your capabilities, number of email customer. Personalisation. received Email CTR Clicks to services on Show how effective the Personalisation, Upselling, Total email opened email’s content is. repeat buying.