The 9 most important KPIs for e-commerce
The KPI (Key Performance Indicator) are that set of metrics fundamental which allow you to effectively monitor the trend of the business, giving the possibility of tracing the performance of a certain activity over time.
Trace and analyze correctly these indicators, allows those who deal with e-commerce to take more aware decisions And inform about marketing, interventions on the site, customer satisfaction and operations.
Although there are an infinite number of metrics on which we can concentrate, in this article we will examine in detail the 9 most important, according to our experience, for the purpose of acquiring new customers through online activities.
Revenue by user ⬆️
Epv = (Total Revenue/Visitor Number of the Website) €
This, according to our experience, is the most important metric ever concerning the website, as it contains a series of other metrics in one shot (addressed later) and allows you to effectively monitor how much the site is capable of generating from eachsingle visitor.
Its formula allows to obtain the average spending of each visitor on our website, giving us an idea of the maximum amount that we can pay to bring a visitor to our e-commerce (CPC).
It is very important to try to maximize its value with all possible means.
Conversion rate ⬆️
CR = (Total conversions/website visitors)%
As per definition, the conversion rate indicates what the percentage of visitors is that on average completes the conversion action considered (purchase, subscriber to the newsletter etc.).
Considering the purchase as a conversion action, this metric directly affects the user income and must be increased as much as possible.
Average order value ⬆️
Aov = (Total Revenue/Purchase number) €
This metric examines the average value of orders made on e-commerce.Also this value, together with the CR, Incords on user income.
Unlike the two previous indicators, however, not always trying to increase the middle cart brings a benefit.Prices too high or purchase conditions that push towards an immense trolley in some cases could penalize both the conversion rate that the income per user
Margins on the service/product sold ⬆️
P = (price - Taxes - Costs) €
It will seem strange, but we forget about this factor: to have an online business it is important that the difference between price and cost of products or services are appropriate.
An online business faces many costs outside the product itself, such as logistical and management costs, and it is important to have the right space especially to be able to move with marketing campaign Effective social.
Not having the right margins can therefore determine the impossibility of advertising and therefore let the products take dust in stock without ever becoming aware of their existence.
Cost per click ⬇️
Cpc = (cost of the advertising campaign/number of visitors obtained) €
Unlike previous metrics, which can also be calculated regardless of the Traffic sources used, the cost per click is specific for each individual Campaign/Listing group/insertion.
Normally it must be as low as possible and should never exceed theEPV generale sul sito web, ma non sempre è così: esistono Traffic sources dove i click possono costare anche frazioni di centesimi ma che raramente genereranno conversioni, mentre esistono posizionamenti con CPC molto elevati che però godono di un conversion rate molto sopra la media.
Cost for acquisition of a customer ⬇️
CPA = (Cost of the advertising campaign/conversion number) €
Anche questa metrica è assolutamente specifica della Campaign/Listing group/insertion presa in esame; grazie a questo valore è subito chiaro se la campagna ha tutte le carte in regola per generare profitto.
If the CPA is greater than lifetime-value of the customer, the campaign It should be stopped immediately!
It follows that keeping an eye on the acquisition cost becomes fundamental for the success of the business: a minor CPA of the margins will allow us to have profit e climb advertising campaigns, otherwise it will incur each other in economic losses.
Value over the time of the customer (Customer Lifetime-Value) ⬆️
CLV = (average order x purchase frequency x margin / abandonment rate)
This is certainly the most underestimated metric by most e-commerce.
Thanks to this indicator, it is possible to obtain the value generated by the individual customer over time once acquired.
With the CLV you can therefore determine the CPA target of marketing companions with more precision, also taking into consideration the future purchases that the customer will take on average on our store.
Return to advertising spending ⬆️
Roas = (revenue / advertising expenditure)
Unless the margins on the products are not stellar or the business does not provide for the payment of taxes, it is a good rule that Roas is always greater than 2.
In fact, this metric indicates what you enter correspond to advertising expenditure and if these are not at least double of what it has invested, it is clear that there is something wrong.
Return to the investment (advertising) ⬆️
Roi = (net profit/advertising investment)%
This is certainly the final metric from which you cannot escape.
Do not constantly monitor or calculate the Roi on the countryside and also in general on the entire e-commerce It means throwing money with your eyes closed.
The return on investment is vital for any activity including e-commerce.Based on this indicator, all business and marketing decisions must be made.
It is normal that in an initial phase or in the test phase this KPI can take more or less negative values;But if this condition is continued over time, it is clear that one or more is necessary changes of course.