Business & KPI’s

On my previous posts ,I would have spoke about various e-commerce platforms and how does it connect our Business.

Now we all fancy the term Business,I will not try and bore my few countable readers again by explaining what is a Business, then I got something interesting for you by telling how a Business is measured in quantity, the business you do might be huge , but still it has to be quantify-able.

How will you indicate that your business is doing good or bad ? That is right, We use performance indicators, A performance indicator is a quantifiable measurement or data point used to gauge performance relative to some goal . So there will be n number of variables(X1 , X2 , X3……) which might decide the value of Y, But some variables may or may not give the desired result, so what we do? we filter these variables , decide which one is key and land up in term Key Performance indicators,

whats the key here , ?  KPIs are those measurements that most accurately and succinctly show whether or not a business in progressing toward its goal . In a commerce world which is booming up , these may be considered as the three categories where KPI’s can be based upon

1. Sales
2. Marketing
3. Customer service

SALES

Now sales will be first thing where everyone loves to measure, it all sticks and dwells with retro thing and also you can find many posts and wiki spaces on how to increase sales, it can be indicated by the following aspects in E-commerece, where the below cover entire entities of an purchase cycle.

• Sales: E-commerce retailers can monitor total sales by the hour, day, week, month, quarter, or year.
• Average order size: Sometimes called average market basket, the average order size tells you how much a customer typically spends on a single order.
• Gross profit: Calculate this KPI by subtracting the total cost of goods sold from total sales.
• Average margin: Average margin, or average profit margin, is a percentage that represents your profit margin over a period of time.
• Number of transactions: This is the total number of transactions. Use this KPI in conjunction with average order size or total number of site visitors for deeper insights.
• Conversion rate: The conversion rate, also a percentage, is the rate at which users on your ecommerce site are buying This is calculated by dividing the total number of visitors (to a site, page, category, or selection of pages) by the total number of conversions.
• Shopping cart abandonment rate: The shopping cart abandonment rate tells you how many users are adding products to their shopping cart but not checking out. The lower this number, the better. If your cart abandonment rate is high, there may be too much friction in the checkout process.
• New customer orders vs. returning customer orders: This metric shows a comparison between new and repeat customers. Many business owners focus only on customer acquisition, but customer retention can also drive loyalty, word of mouth marketing, and higher order values.
• Cost of goods sold (COGS): COGS tells you how much you’re spending to sell a product. This includes manufacturing, employee wages, and overhead costs.
• Total available market relative to a retailer’s share of market: Tracking this KPI will tell you how much your business is growing compared to others within your industry.
• Product affinity: This KPI tells you which products are purchased together. This can and should inform cross-promotion strategies.
• Product relationship: This is which products are viewed consecutively. Again, use this KPI to formulate effective cross-selling tactics.
• Inventory levels: This KPI could tell you how much stock is on hand, how long product is sitting, how quickly product is selling, etc.
• Competitive pricing: It’s important to gauge your success and growth against yourself and against your competitors. Monitor your competitors’ pricing strategies and compare them to your own.
• Customer lifetime value (CLV): The CLV tells you how much a customer is worth to your business over the course of their relationship with your brand. You want to increase this number over time through strengthening relationships and focusing on customer loyalty.
• Revenue per visitor (RPV): RPV gives you an average of how much a person spends during a single visit to your site. If this KPI is low, you can view website analytics to see how you can drive more online sales.
• Churn rate: For an online retailer, the churn rate tells you how quickly customers are leaving your brand or canceling/failing to renew a subscription with your brand.
• Customer acquisition cost (CAC): CAC tells you how much your company spends on acquiring a new customer. This is measured by looking at your marketing spend and how it breaks down per individual customer.

Marketing

Now comes my favorite topic, Marketing, does not seem to be an easy task, Marketers need to know their target audience , In depth product knowledge which they are going to sell and lot of patience (which money cannot buy),  Marketers use KPIs to understand which products are selling, who’s buying them, how they’re buying them, and why they’re buying them.

• Site traffic: Site traffic refers to the total number of visits to your eCommerce site. More site traffic means more users are hitting your store.
• New visitors vs. returning visitors: New site visitors are first-time visitors to your site. Returning visitors, on the other hand, have been to your site before. While looking at this metric alone won’t reveal much, it can help eCommerce retailers gauge success of digital marketing campaigns. If you’re running a re-targeted ad, for example, returning visitors should be higher.
• Time on site: This KPI tells you how much time visitors are spending on your website. Generally, more time spent means they’ve had deeper engagements with your brand. Usually, you’ll want to see more time spent on blog content and landing pages and less time spent through the checkout process.
• Bounce rate: The bounce rate tells you how many users exit your site after viewing only one page. If this number is high, you’ll want to investigate why visitors are leaving your site instead of exploring.
• Page-views per visit: Page-views per visit refers to the average number of pages a user will view on your site during each visit. Again, more pages usually means more engagement. However, if it’s taking users too many clicks to find the products they’re looking for, you want to revisit your site design.
• Traffic source: The traffic source KPI tells you where visitors are coming from or how they found your site. This will provide information about which channels are driving the most traffic, such as: organic search, paid ads, or social media.
• Mobile site traffic: Monitor the total number of users who use mobile devices to access your store and make sure your site is optimized for mobile.
• Day part monitoring: Looking at when site visitors come can tell you which are peak traffic times.
• Newsletter subscribers: The number of newsletter subscribers refers to how many users have opted into your email marketing list. If you have more subscribers, you can reach more consumers. However, you’ll also want to look at related data, such as the demographics of your newsletter subscribers, to make sure you’re reaching your target audience.
• Texting subscribers: Newer to digital marketing than email, ecommerce brands can reach consumers through SMS-based marketing. Texting subscribers refers to the number of customers on your text message contact list. 
• Subscriber growth rate: This tells you how quickly your subscriber list is growing. Pairing this KPI with the total number of subscribers will give you good insight into this channel.
• Email open rate: This KPI tells you the percentage of subscribers that open your email. If you have a low email open rate, you could test new subject lines, or try cleaning your list for inactive or irrelevant subscribers.
• Email click-through rate (CTR): While the open rate tells you the percentage of subscribers who open the email, the click-through rate tells you the percentage of those who actually clicked on a link after opening. This is arguably more important than the open rate because without clicks, you won’t drive any traffic to your site.
• Unsubscribes: You can look at both the total number and the rate of unsubscriptions for your email list.
• Chat sessions initiated: If you have live chat functionality on your ecommerce store, the number of chat sessions initiated tells you how many users engaged with the tool to speak to a virtual aide.
• Social followers and fans: Whether you’re on Facebook, Instagram, Twitter, Pinterest, or Snapchat (or a combination of a few), the number of followers or fans you have is a useful KPI to gauge customer loyalty and brand awareness. Many of those social media networks also have tools that ecommerce businesses can use to learn more about their social followers.
• Social media engagement: Social media engagement tells you how actively your followers and fans are interacting with your brand on social media.
• Average CTR: The average click-through rate tells you the percentage of users on a page (or asset) who click on a link.
• Average position: The average position KPI tells you about your site’s search engine optimization (SEO) and paid search performance. This demonstrates where you are on search engine results pages. Most online retailers have the goal of being number one for their targeted keywords.
• Pay-per-click (PPC) traffic volume: If you’re running PPC campaigns, this tells you how much traffic you’re successfully driving to your site.
• Blog traffic: You can find this KPI by simply creating a filtered view in your analytics tool. It’s also helpful to compare blog traffic to overall site traffic.
• Number and quality of product reviews: Product reviews are great for a number of reasons: They provide social proof, they can help with SEO, and they give you valuable feedback for your business. The quantity and content of product reviews are important KPIs to track for your eCommerce business.
• Banner or display advertising CTRs: The CTRs for your banner and display ads will tell you the percentage of viewers who have clicked on the ad. This KPI will give you insight into your copy, imagery, and offer performance.
• Affiliate performance rates: If you engage in affiliate marketing, this KPI will help you understand which channels are most successful

CUSTOMERS

Finally, Customer Service,

 Any new technology adopted in businesses is intended to be used for the betterment of work, employees, and of course, the customers. It helps in executing things in a better, more-efficient manner, leading to superior experiences both inside and outside of a business.
 Measuring and tracking these KPIs will help you ensure you’re providing a positive customer experience.  

Net promoter score (NPS): Your NPS KPI provides insight into your customer relationships and loyalty by telling you how likely customers are to recommend your brand to someone in their network.

Hit rate: Calculate your hit rate by taking the total number of sales of a single product and dividing it by the number of customers who have contacted your customer service team about said product.

Customer service email count: This is the number of emails your customer support team receives.

Customer service phone call count: Rather than email, this is how frequently your customer support team is reached via phone.

Customer service chat count: If you have live chat on your eCommerce site, you may have a customer service chat count.

There may be huge amount of content and volume in the customer experience , but I strongly hope these KPI’s above will surely be able give a benchmark.