Ecommerce

9 E-commerce
KPIs You Need
to Start Tracking
Now!

DashThis is a digital marketing reporting tool that helps marketers worldwide scale their business. DashThis enables marketers to save time and effort on a daily basis by automating their reporting process and offering them personalized customer service every step of the way.

Nowadays, selling a product online has become an increasingly large part of how companies market their products. So much so, that for some companies a brick-and-mortar location isn’t even necessary anymore.

An e-commerce website is a good way to promote your products on a larger scale; it allows your brand to be found quickly when a consumer is searching for your product. For this reason, businesses are creating new e-commerce websites every single day.

If you are selling your products online, it’s important that you track your e-commerce data. One of the greatest advantages of the e-commerce business model is the fact that you have access to a large amount of data; not only sales data, but also marketing and customer behaviour data. Tracking your e-commerce data regularly can help you scale your business tremendously by enabling you to optimize your e-commerce site and grow your business’ revenue consistently.

But where do you start? What data should you track? And how?

First, to track your e-commerce data, you need to use Google Analytics. This tool will allow you to get all your website’s performance data. However, using Google Analytics alone can be pretty complex, so you might want to use an automated reporting tool like DashThis to help you out. With a reporting tool, you can just choose your most important key performance indicators (KPIs), and the software will showcase only the data you need in a beautifully laid out report.

To give you an idea of what KPIs you should track, here is the most important e-commerce data you should look at on a regular basis:

Basic KPIs

If you’re going to look at only 3 key performance indicators, these are them. These numbers will give you a broad overview of what’s going on with your e-commerce website.

First things first, you want to track the number of visits on your website in order to determine if your visits are increasing, decreasing, if there are more than last year, etc. Take a moment to ask yourself why there are more, fewer, or the same amount of visitors on a weekly, monthly, or yearly basis.

Take a look at the number of transactions people complete as well as the revenue those transactions generate. As an example, your e-commerce website could have 30 transactions this month with a revenue of $5,000. This is very important data to track, since it’s your bottom line. You don’t have a website just to get visitors; ultimately, you want sales. This data will help you know if your clients are buying more than they used to (if you have more revenue than before with the same number of transactions) or if they buy less than they used to. It will also help you notice if you have more or fewer transactions during certain periods of the year (like the holidays).

Make sure that a reasonable percentage of visitors become buyers by correlating your visits with your transactions; this is the conversion rate (calculated by dividing the number of transactions by the number of visits). Do visitors on your website actually buy something, or do they leave without completing an order? The conversion rate is quite important because you want as many visitors as possible to become buyers. A very low conversion rate may indicate that some things need to change on your website! Are visitors not buying because of the price? The website’s design? The payment process? This data is crucial in order to improve your e-commerce website and grow your sales.

Advanced KPIs

Here are some other important KPIs with more advanced data.

The average order value will help you understand how much money your clients are actually willing to spend on your website. If that number increases over time, it means you’re doing a great job at promoting and upselling items! If it decreases, you might need to revise your marketing strategies or prices. The average order value is very easy to calculate: just take your total website sales and divide that by the number of transactions, or if you prefer, you can choose the preset KPI directly in your reporting tool.

Traffic by acquisition channel enables you to better understand where your visitors come from. By tracking this KPI, you learn how your visitors ended up on your website. For example, they could come from your social media pages (Facebook, Twitter, Linkedin etc.), a search on Google, a link in your newsletter, or by directly typing your web address (URL). Once you know what channel brings the most traffic, you’ll know where to invest more time and money to increase your number of visits. If you thought that your Facebook page was a waste of time, but see that 40% of your traffic comes from Facebook, you might need to change your mind and invest more time and energy on this channel.

Customer acquisition cost is the amount of money you spent on online marketing during a given time period, divided by the number of customers who made purchases on your website during that same time period. This KPI basically tells you how much you paid in ads and other online marketing campaigns in order to get one customer to make a purchase on your website; if this number is higher than a customer’s average purchase, you have a problem. For example, if the average customer spends $20 on your website, but your CAC is $50, you may need to revise your marketing strategies. If your CAC is $30 but the average purchase is $60, then that shows a pretty good return on investment. As a general rule, the lower the CAC, the better. However, remember that you need to invest in online marketing in order to grow your business and that every business is different. Start by setting a target CAC that takes into consideration your profit margin, the costs you encounter with your e-commerce website, and how much you are willing to spend in order to gain a new client. Once you have your target CAC, tracking this data will help you see if you need to invest more or less money in your online marketing strategies.

Attracting new visitors with your marketing efforts is great, but when they come back on their own and buy, it’s even better! The percentage of returning visitors is, as the name states, the percentage of visitors who returned to your website. Since they came back to your e-commerce site, they have a lot of potential to become buyers. These returning visitors also offer a better return on investment; it’s always more costly to attract new visitors than to bring former ones back. Make sure you have a great balance of new and returning visitors, since even though returning ones are more likely to buy, you still need new visitors to grow your company. The percentage of returning visitors could even help you determine if your loyalty programs and strategies are working. For example, if you don’t have a loyalty incentive in place on your website, you could offer your clients a discount on their next purchase. Then, you simply need to track the percentage of returning visitors to see if your promotion worked!

This KPI helps you track all the times a product was seen on your website. You can break this down for each product to get a good idea of which products are getting the most attention from your visitors. This can help you see the interests of your customers and visitors so that you can satisfy their needs accordingly. For example, if you’re a chocolatier and most of your sales are on milk chocolate products, but online visitors tend to frequently look at dark chocolate products, you might want to promote these a little more. Clearly, there’s an interest in your dark chocolate products, so you can either change the price, run a promotional campaign, or simply offer more of them.

This KPI helps you know if people are abandoning your products somewhere along the purchase process. Ideally, this number would be as close as possible to the total number of products sold, because this means that people actually buy everything that they add to their carts! This data can help you determine if your products are too expensive, if you have a problem with your shipping costs, or if your visitors buy everything they like on your website. This data can also be very useful if you plan on offering an automatic discount when products are left in a shopper’s cart. This strategy can help you get a better conversion rate and increase your revenue!

Need help tracking your data?

All these key performance indicators will help you better understand your e-commerce performance, act on and improve your different marketing strategies. But don’t worry though, you don’t need to spend all your time learning how to track them in Google Analytics. You can use an automated reporting tool like DashThis to easily create e-commerce reports with all of your business’ most important KPIs. You can even use an e-commerce report template that already has all the KPIs set up, then you can simply schedule an automated email dispatch to get your up-to-date report directly in your inbox, every month.

Make sure you always keep an eye on your e-commerce data to constantly improve your website performance and marketing strategies. Continuous analysis and data-driven improvements are key to the success of your e-commerce website!