KPIs are powerful tools, but they mean very little when siloed. Their real power comes from how they integrate into a larger narrative and create a mosaic of internal and external connected data. With opportunities for comparison, we can identify areas of improvement and objectively assess your performance in both quantitative and qualitative approaches.
Is a 6% click-through rate on my homepage’s main CTA good or bad? Why is it better or lower than last quarter? How does that stack up with the rest of my industry? Is it because of something the team did or because the Fed raised interest rates again last week?
In this article, we’ll explore ideas to evaluate the health of your ecommerce operations and gain insights into your performance. By leveraging a mix of internal KPIs, industry benchmarks, and peer comparisons, you can develop a comprehensive understanding of your ecommerce ecosystem. We will help you find resources to select the KPIs that are most important to your specific industry and empower you to understand what areas need to focus on with your team.
Where to Start?
Let’s start right now. Jot down a current list from memory of what KPIs you track today. If you can pull twenty from memory, awesome! If you can pull three, don’t worry. This exercise isn’t meant to do anything besides provide a benchmark and help you understand what metrics are most important to you today. It’ll be a good thing to look back on as you gain new ideas.
Take a try first, but if you’re looking for inspiration, scroll down to our Top 30 KPIs at the bottom of this article.
Selecting Your KPIs
Metrics provide insights into various aspects of your ecommerce operations, including sales performance, customer satisfaction, and operational efficiency. Internal KPIs offer valuable data and trends, while external comparisons can help you identify areas for improvement you may be overlooking. It is essential to use both sources to identify which metrics are most important for your business and in many cases, to step outside of your niche for new inspiration. In either case, each KPI you monitor should have a clear link to your strategic priorities. For example, if your primary objective is to increase customer retention, focus on metrics like customer lifetime value (CLV), repeat purchase rate, or customer satisfaction scores (CSAT).
External Data Sources
Reliable Industry Reports: Reputable industry reports provide invaluable data on ecommerce benchmarks across various sectors. Sources like the National Retail Federation (NRF), Forrester Research, and eMarketer regularly publish reports with insights into ecommerce trends, conversion rates, cart abandonment rates, and average order values. These resources can help you gauge your performance against your peers and pinpoint areas for improvement.
Leverage External Agencies: Specialist ecommerce agencies, such as GRAYBOX, have an information advantage in the fact that we deal with numerous clients and conduct complex projects multiple times each year compared to some in-house teams who may only have to undergo certain initiatives a handful of times in their career. There are tactical improvements and innovative solutions that change quickly from year to year, and agencies have access to industry trends and best practices, helping to enrich your strategic planning. Leveraging an external agency's expertise can offer an outside-in perspective and foster innovation within your strategies.
Industry Associations and Networks: Joining industry associations and networks can provide connections with other ecommerce leaders who are facing similar challenges. These communities often share aggregated data, providing an opportunity to anonymously compare your performance with others. Participating in these groups can help you identify blind spots and learn from the experiences of others.
Peer Comparisons: Engaging in peer-to-peer benchmarking can offer deeper insights into your performance and uncover areas where your business could improve or excel. While industry benchmarks give a broad overview, direct comparisons with similar businesses can provide a more nuanced understanding of your standing.
Professional Conferences and Events: Attending industry events provides an opportunity to network with other ecommerce leaders. You can discuss challenges, strategies, and outcomes to identify gaps or areas for improvement within your own organization. Make sure to participate actively and engage in dialogue to gain the most benefit from these events.
Online Communities and Forums: Digital communities such as LinkedIn Groups, specialized ecommerce forums, and social media groups provide a platform for discussions around performance metrics and strategies. Active participation in these communities can provide valuable feedback and help you identify blind spots in your strategies.
Industry Publications and News: Stay informed about industry advancements by regularly reading relevant publications, blogs, and news sources. Keeping abreast of new tools, technologies, and strategies can enhance your operations and keep your business competitive. Following influential thought leaders and joining relevant LinkedIn groups can also provide valuable insights.
Internal Data Sources
As an ecommerce professional, you have access to a range of internal data sources that can provide valuable insights into your business performance. Here's where you should look to track your Key Performance Indicators (KPIs):
Ecommerce Platform: Your ecommerce platform (such as Shopify, Adobe Commerce, or Big Commerce) will be a rich source of sales data. You can track metrics like total sales, average order value, conversion rates, and cart abandonment rates directly from your platform's analytics dashboard.
Web Analytics Tools: Tools like Google Analytics are essential for understanding your web traffic, user behavior, and online sales. You can track metrics such as new vs. returning visitors, traffic sources, bounce rates, and page views.
CRM Systems: Your Customer Relationship Management (CRM) system (like Salesforce or HubSpot) can provide important data about your customers, including their purchase history, interactions with your company, and any feedback they've provided.
Email Marketing Software: Platforms like Klaviyo or Dotdigital can provide metrics on email open rates, click-through rates, and conversion rates, helping you gauge the success of your email marketing campaigns.
Social Media Analytics: Each social media platform (like Facebook, Instagram, or LinkedIn) provides its own set of analytics. You can monitor metrics like follower growth, engagement rates (likes, shares, comments), and click-through rates on your website.
Paid Advertising Platforms: If you're running paid ads, platforms like Google Ads or Facebook Ads Manager will provide important data on your ad performance, such as impressions, click-through rates, cost per click, and conversion rates.
Customer Service Platforms: Tools like Zendesk or Gorgias can offer insights into customer satisfaction, common customer issues, and the effectiveness of your customer service team.
ERP systems: These platforms bring deep data organization like embedded inventory management and enable vital data like top-selling products, stock levels, and sales forecasts. This information is pivotal in making decisions like optimizing purchasing and sales strategies.
Build your Narrative
The lists above might seem like an endless array of metrics but remember to focus on those that align with your strategic goals and contribute to your understanding of business performance. If you take the time to evaluate important metrics regularly, or even better yet, integrate systems to continuously monitor KPIs, your online presence will continue to delight clients and outpace competition. Keep in mind, however, that the data you collect should always serve a purpose. It should contribute to your broader business understanding and provide stepping stones toward enhancing your strategies. Each industry has its own set of specific metrics that reflect its unique business dynamics. Here are a few examples for different ecommerce industries:
Fashion and Apparel: Due to high return rates in this industry, key metrics could include Return Rate and Average Order Value (AOV). You should also track Product Page Conversion Rate to understand how effectively your product pages turn visitors into buyers.
Electronics: High-value goods like electronics often have longer sales cycles and rely on detailed product information. Therefore, metrics like Time Spent on Site and Bounce Rate can be important, along with traditional sales metrics like Sales Conversion Rate.
Food and Beverage: In this industry, Repeat Purchase Rate and Customer Lifetime Value (CLV) can be crucial due to the recurring nature of purchases. Cart Abandonment Rate is another important metric due to the typically lower average order values.
Health and Beauty: Like the Food and Beverage industry, the Health and Beauty industry often relies on repeat purchases, making CLV and Repeat Purchase Rate key metrics. Additionally, Product Review Scores can be a significant factor due to the personal nature of these products.
Home Goods/Furniture: Due to the high-ticket and infrequent nature of these purchases, Pay Per Click (PPC) Conversion Rate, Average Order Value (AOV), and Customer Acquisition Cost (CAC) could be key metrics to track.
Lastly, if you're seeking a fresh perspective or assistance in honing your ecommerce strategy, remember that GRAYBOX is here to lend a hand. Our vast experience, spanning over 14 years and hundreds of clients, has equipped us with the insights to assist you in refining your strategies and achieving your business goals. As your digital partner, we bring a blend of professionalism and personal engagement to every interaction. We're always ready to help you turn data into actionable insights, enabling informed decisions that drive your business toward success.
Top 30 KPIs (In no particular order)
Website Traffic: This is the total number of visits to your website. It's an indicator of your site's popularity and the effectiveness of your marketing efforts.
New vs. Returning Visitors: Tracking the ratio of new to returning visitors helps measure customer loyalty and the effectiveness of customer retention strategies.
Traffic Sources: This metric breaks down your website traffic by source (organic search, paid ads, social media, direct traffic, etc.), helping you understand which channels drive the most traffic.
Bounce Rate: This is the percentage of visitors who leave your website after viewing only one page. A high bounce rate may indicate issues with your landing page or misalignment between your marketing messaging and site content.
Average Session Duration: This measures the average length of a user's visit. A longer session duration suggests higher engagement levels.
Page Views per Visit: This measures the average number of pages a user visits during a single session. More page views can indicate higher engagement.
Desktop Conversion Rate: This is the percentage of visitors who complete a desired action (e.g., make a purchase). It's a key indicator of your site's effectiveness at turning visitors into customers.
Mobile Conversion Rate: This KPI measures the effectiveness of your mobile site or app in converting visitors into customers. Given the rise of mobile commerce, this metric is becoming increasingly important.
Sales Conversion Rate (SCR): This is the ratio of actual sales to the number of visitors. SCR provides insight into the effectiveness of your sales funnel and the overall user experience on your site.
Cart Conversion Rate: This is the percentage of visitors who add items to their cart and proceed to checkout. A high cart conversion rate indicates a smooth and convincing transition from browsing to buying.
Cart Abandonment Rate: This is the percentage of customers who add items to their shopping cart but do not complete the purchase. A high rate might indicate problems with your checkout process.
Average Order Value (AOV): This is the average amount spent on each order. Increasing AOV is a way to boost revenue without needing to acquire new customers.
Cost per Acquisition (CPA): This is the total marketing spend divided by the number of new customers acquired. It measures the cost-effectiveness of your marketing campaigns.
Customer Lifetime Value (CLV): This predicts the net profit from the entire future relationship with a customer. It's crucial to understand how much you should spend to acquire and retain customers.
Churn Rate: This is the percentage of customers who stop doing business with you during a given period. It's a crucial metric for subscription-based businesses.
Return on Advertising Spend (ROAS): This measures the effectiveness of a digital advertising campaign. ROAS helps determine the channels that provide the best return on investment.
Net Promoter Score (NPS): This measures customer loyalty and satisfaction. It's based on the question, "How likely are you to recommend our company to a friend or colleague?"
Customer Retention Rate: This is the percentage of customers you retain over a given period, excluding new customers. It shows how good you are at keeping your customers over time.
Revenue by Traffic Source: This KPI shows the revenue generated from each traffic source, helping you understand which channels are the most profitable.
Product Affinity: This shows which products are commonly purchased together, offering valuable insights for cross-selling and up-selling.
Product Relationship: This measures the relationships between products and how the purchase of one product affects the purchase of another.
Gross Profit Margin: This indicates the total sales revenue retained after all the direct costs associated with making a product are accounted for. It’s crucial for understanding the profitability of individual items.
Year Over Year (YoY) Growth: This measures growth by comparing performance to the same period in the previous year. It helps to identify growth trends and assess performance.
Customer Acquisition Cost (CAC): This metric represents the total cost of acquiring a new customer, including all marketing and sales costs. It's crucial for understanding the return on investment for your marketing efforts and is especially relevant when viewed in relation to CLV.
Social Media Engagement: This is a measure of interactions (likes, shares, comments) on your social media channels. It helps gauge the effectiveness of your social media strategy.
Email Open and Click-Through Rates (CTR): These are key metrics for evaluating the success of your email marketing campaigns. A high open rate indicates effective subject lines, while a high CTR suggests that your email content is resonating with your audience.
Stock Keeping Unit (SKU) Performance: This involves tracking sales on a per-product basis. It helps you understand which products are driving your revenue and which might be underperforming.
Return on Investment (ROI): This measures the profitability of investments. It's crucial for making informed business decisions and setting future strategies.
Customer Satisfaction Score (CSAT): This metric quantifies the degree to which a product or service meets customer expectations. High CSAT can lead to increased customer loyalty and positive word-of-mouth.
Repeat Purchase Ratio: This is the proportion of customers who have shopped more than once. It indicates customer loyalty and the success of your customer retention efforts.
National Retail Federation (NRF): https://nrf.com/
Forrester Research: https://www.forrester.com/
Google Reviews: https://www.google.com/business/
LinkedIn Groups: Search for relevant ecommerce groups on LinkedIn.
Industry-specific forums and communities: Explore industry-specific forums and communities for ecommerce professionals.
Relevant industry publications and blogs: Stay informed by reading industry-specific publications and