Running an E-Commerce Business? These Are Your Most Important KPIs:
Whether you own or do marketing for an e-commerce business, you need to know which KPIs to track. These are some of the indicators that should be on your radar:
The first indicator is pretty obvious – sales:
- Sales And Customer Growth
Sales and customer growth are always the most important indicators of health for a business. Every business tracks sales on an hourly, daily, weekly, monthly and/or quarterly basis. You also want to track your sales by promotions and channels so that you know which acquisition efforts are working, where they are working and when they are working. This will help you to spend your ad dollars more effectively.
- Average Sale
You also want to track your average sale on a customer’s first, second and third purchase. Knowing this will give you insights at how purchasing changes over time, such as whether it increases or decreases after the first sale, so that you can develop strategies to improve growth.
- Profit per Order
Profit per order is something else you want to track. It’s important to understand who your high-profit clients are and where they come from.
- Retention Rate
The next thing you need to track is the retention rate, with a ‘retained customer’ being described as one who has purchased from you three or more times. Your e-commerce business’ retention rate is important because it helps you understand how customers feel about your brand and whether they will become advocates or not.
Retained customers are your most profitable customers. A great example is from Zappos: 70% of the company’s sales come from retained customers, in other words – those who have made shopping at Zappos a habit.