KPI for e-commerce: what and why should be tracked for effective promotion
Posted: Tue Dec 17, 2024 4:42 am
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April 1, 2021 0:00
KPI for e-commerce: what and why should be tracked for effective promotionIlya Rusakov
Head of the agency impulse.guru
Content:
Who needs to track KPIs
What KPIs should you trackHow to apply KPIs in real lifeHow to implement KPIsWhen focusing on KPIs can be harmfulSummary
You only manage what you can whatsapp number list measure — this is an axiom of internet marketing experts.
If you know what the result is, then you can measure it and influence it at the very beginning. To achieve success in e-commerce, it is important to correctly define and calculate key performance indicators — KPI.
KPI are metrics and indicators that allow you to evaluate the degree of goal achievement and/or evaluate the effectiveness of the actions performed.
How to influence them and achieve business goals — I will tell you in this article.
Who needs to track KPIs
For a business owner, to understand which promotion channels bring him profit and why. To do this, you need to see the dynamics of development and the effectiveness of work on the site through various marketing channels.
A promotion specialist, to draw conclusions based on KPIs and propose new hypotheses for improving indicators: adjust and optimize the advertising campaign, change the page to which visitors come, optimize the USP for user requests, etc.
Large companies usually have some "fat" and can afford to experiment with promotion. The funds for them are included in the budget.
Small businesses do not have such an opportunity. From the first advertising campaigns, they need to calculate everything in detail and quickly adjust the strategy in case of ineffective spending of money.
What KPIs should you track?
Website traffic.
Shows the effectiveness of advertising campaigns - quality and sources of incoming traffic.
Branded traffic.
Requests mentioning the company bring in up to 40% of the site's users, and this is traffic with a high percentage of conversions.
Visibility in search engines.
What place does your site occupy in search results for profile (target) queries? Allows you to assess the competition and develop a promotion strategy.
Number of page views.
How many pages are viewed by visitors. This helps to evaluate the behavior of site users, strengths and weaknesses to increase the percentage of conversions.
Conversion rate.
Conversion is the ratio of users who performed a target action to the total number of visitors. A target action can be ordering a service, purchasing a product, registering, calling back, etc.
Average check indicator.
This is the average income from one order. The higher the average check, the higher the company's income from each customer. It is important to measure the absolute value of this indicator after each implementation of hypotheses in order to understand how the changes affected the company's overall income.
Customer lifetime value (LTV).
How much money the client brought us during the entire period of cooperation with the company.
Abandoned Cart Rate.
This is the share of users who added an item to the cart but did not purchase it. If people have difficulty placing an order in the cart, the indicator will be high.
Cost of attracting a visitor/client
If it is high, this is a reason to reconsider advertising communications; the marketing budget is being spent ineffectively.
ROI (return on investment)
To work in the black, you need to understand whether you are getting enough orders at an acceptable price, whether your advertising investments are paying off, and what profit the company has received.
How to Apply KPIs in Real Life
Let me give you some examples.
What is more profitable: targeted advertising or contextual advertising?
In contextual advertising, people go by specific requests, and in targeting, we set up campaigns based on audience characteristics.
If we don’t know our target audience very well, then there is a chance that advertising in targeting will be less convertible compared to context. People come to it with a precise, formed request. It is easier to convert them into clients.
We need to compare: how many orders from targeting and context we receive and at what cost. And redistribute the budget where it is more profitable.
Changed the website design or functionality. How did it affect the indicators?
After redesigning the site, it is necessary to measure the bounce rate, time spent on the site and conversion by the funnel. If the indicators have improved, we leave the changes, if they have worsened, we roll back and redo them.
How to find promising channels that give the greatest return?
Let's say we provide contextual advertising. The cost per application in the first month is high. We put forward hypotheses and test.
If the cost per application falls as a result, and we still have ideas for optimization, this is a promising channel and a growth point.
When is it necessary to change the promotion strategy or priority of work?
When we got non-standard results.
For example:
The cost of an application from one advertising channel has become very expensive - perhaps you need to take a break and find out why this happened.
It was hard to get applications from targeted advertising, but we continued to look for an audience and finally applications started pouring in. This means we need to review the promotion strategy in this direction.
April 1, 2021 0:00
KPI for e-commerce: what and why should be tracked for effective promotionIlya Rusakov
Head of the agency impulse.guru
Content:
Who needs to track KPIs
What KPIs should you trackHow to apply KPIs in real lifeHow to implement KPIsWhen focusing on KPIs can be harmfulSummary
You only manage what you can whatsapp number list measure — this is an axiom of internet marketing experts.
If you know what the result is, then you can measure it and influence it at the very beginning. To achieve success in e-commerce, it is important to correctly define and calculate key performance indicators — KPI.
KPI are metrics and indicators that allow you to evaluate the degree of goal achievement and/or evaluate the effectiveness of the actions performed.
How to influence them and achieve business goals — I will tell you in this article.
Who needs to track KPIs
For a business owner, to understand which promotion channels bring him profit and why. To do this, you need to see the dynamics of development and the effectiveness of work on the site through various marketing channels.
A promotion specialist, to draw conclusions based on KPIs and propose new hypotheses for improving indicators: adjust and optimize the advertising campaign, change the page to which visitors come, optimize the USP for user requests, etc.
Large companies usually have some "fat" and can afford to experiment with promotion. The funds for them are included in the budget.
Small businesses do not have such an opportunity. From the first advertising campaigns, they need to calculate everything in detail and quickly adjust the strategy in case of ineffective spending of money.
What KPIs should you track?
Website traffic.
Shows the effectiveness of advertising campaigns - quality and sources of incoming traffic.
Branded traffic.
Requests mentioning the company bring in up to 40% of the site's users, and this is traffic with a high percentage of conversions.
Visibility in search engines.
What place does your site occupy in search results for profile (target) queries? Allows you to assess the competition and develop a promotion strategy.
Number of page views.
How many pages are viewed by visitors. This helps to evaluate the behavior of site users, strengths and weaknesses to increase the percentage of conversions.
Conversion rate.
Conversion is the ratio of users who performed a target action to the total number of visitors. A target action can be ordering a service, purchasing a product, registering, calling back, etc.
Average check indicator.
This is the average income from one order. The higher the average check, the higher the company's income from each customer. It is important to measure the absolute value of this indicator after each implementation of hypotheses in order to understand how the changes affected the company's overall income.
Customer lifetime value (LTV).
How much money the client brought us during the entire period of cooperation with the company.
Abandoned Cart Rate.
This is the share of users who added an item to the cart but did not purchase it. If people have difficulty placing an order in the cart, the indicator will be high.
Cost of attracting a visitor/client
If it is high, this is a reason to reconsider advertising communications; the marketing budget is being spent ineffectively.
ROI (return on investment)
To work in the black, you need to understand whether you are getting enough orders at an acceptable price, whether your advertising investments are paying off, and what profit the company has received.
How to Apply KPIs in Real Life
Let me give you some examples.
What is more profitable: targeted advertising or contextual advertising?
In contextual advertising, people go by specific requests, and in targeting, we set up campaigns based on audience characteristics.
If we don’t know our target audience very well, then there is a chance that advertising in targeting will be less convertible compared to context. People come to it with a precise, formed request. It is easier to convert them into clients.
We need to compare: how many orders from targeting and context we receive and at what cost. And redistribute the budget where it is more profitable.
Changed the website design or functionality. How did it affect the indicators?
After redesigning the site, it is necessary to measure the bounce rate, time spent on the site and conversion by the funnel. If the indicators have improved, we leave the changes, if they have worsened, we roll back and redo them.
How to find promising channels that give the greatest return?
Let's say we provide contextual advertising. The cost per application in the first month is high. We put forward hypotheses and test.
If the cost per application falls as a result, and we still have ideas for optimization, this is a promising channel and a growth point.
When is it necessary to change the promotion strategy or priority of work?
When we got non-standard results.
For example:
The cost of an application from one advertising channel has become very expensive - perhaps you need to take a break and find out why this happened.
It was hard to get applications from targeted advertising, but we continued to look for an audience and finally applications started pouring in. This means we need to review the promotion strategy in this direction.