Why and How to track your Ecommerce KPI

Businesses have always used sales and customer data to make strategic decisions. In the past, the information came from direct feedback, visual observation, and inventory tracking.

Today, there are many more e-commerce KPI choices to consider, letting you measure, test, and quantify your online presence. Each detail of incoming traffic is trackable, delivering actionable insights that can lead to higher revenues and profits.

With data ever-present in this scenario, selecting the appropriate e-commerce KPI options is crucial to inform your strategic decisions. Catchr can transfer a complete digital marketing report from multiple assets to visualize your data in minutes.

How Do KPIs Help with Your E-Commerce Business?

Key performance indicators are like the dashboard of a car for online marketing. They give you real-time data, so you can steer your business in the right direction.

Although you can make decisions without consulting a digital marketing report filled with this information, doing so requires a lot of trial and error. The data you receive from KPIs adds more certainty to the equation.

It helps to think of e-commerce KPI data as a story each customer or website visitor tells. This information tells you what is working, what could improve, and where your efforts need more focus.

What E-Commerce KPIs Are You Tracking?

Before you start sorting through all the data your customers and visitors generate when visiting your e-commerce platform, it is crucial to choose appropriate KPIs. Each indicator should deliver information that brings you closer to a specific goal or reflects your mission, vision, and values. 

Here is a closer look at some of today’s most popular KPIs to track to see if they could benefit your business.

E-Commerce KPI to Track

The Benefit of Tracking This E-Commerce KPI

• Sales Conversion Rate: How many visitors buy something? This key performance indicator is critical to track because it shows how many people follow through with an intent to purchase. Aim to improve it.
• Average Order Value: How much are people spending per transaction? If it's low, you might want to encourage bulk buying.
• Customer Lifetime Value: How much does a customer spend over time? Knowing this can guide how you approach the information from your digital marketing report. It often leads to intelligent outreach investments.
• Cart Abandonment Rate: It’s frustrating when people add items to their cart but do not buy anything. Lowering this KPI can boost sales and revenue for your online business.
• Traffic Source: Where are people discovering information about your website? Is it social media, search engines, or direct visits? This info helps in optimizing your marketing channels.
• Customer Retention Rate: Keeping a customer is cheaper than finding a new one. Track how many people stick around and why so that you can use that data to develop more long-term relationships.
• Net Promoter Score: Would a customer recommend your business to others? The answers you receive through this e-commerce KPI can tell you a lot about people's overall satisfaction rates when interacting with you.

The best aspect of a key performance indicator is that you can segment each one into targeted, demographic-based data.

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That means you can focus on local customers, online consumers, or first-time contacts. You can blend these perspectives into one comprehensive digital marketing report or pursue specifics at whatever level your business needs to find the proper steps to take on its journey.

What About E-Commerce Performance KPIs to Track?

Once you start tracking the information that comes to you daily, it is time to organize that data into something usable. That leads a business toward e-commerce KPI options that look at performance over a specific period.

Three critical KPIs are worth reviewing in this category.

1. Year-over-year Growth (YOY)

This KPI is used to compare a specific metric over the course of a year. Imagine you’re looking at your e-commerce sales for October 2023, and you compare them to sales from October 2022. That’s a YOY comparison.

Monthly or quarterly data can have seasonal variations, but YOY eliminates those changes. If you know that most sales occur in December during the holidays, comparing a KPI from that time in the previous year makes sense instead of looking at a slow time for sales.

YOY could apply to revenue, customer retention, and website traffic metrics. Keeping these trends an important component of your digital marketing report and outreach efforts makes it easier to strategize and allocate resources.

2. Product Affinity

The information gathered with this KPI focuses on the relationship between different products in an e-commerce setting. Specifically, it measures how often two or more products are bought together.

If customers who buy running shoes on your site also tend to buy athletic socks, there's a high product affinity between those two items.

Understanding this key performance indicator can boost your marketing strategies. You could bundle popular items together, provide combination discounts, or maximize targeted advertising strategy.

It doesn’t have to be information strictly related to sales. Your goal is to improve the user experience while simplifying the transaction process, leading to higher satisfaction rates.

3. Bounce Rate

This KPI measures the percentage of visitors who land on a webpage and leave without interacting further. After seeing what you offer, they “bounce” from your e-commerce platform to another destination.

In this context, a high bounce rate can be a red flag that requires management. If people are coming to your site but not clicking on anything, not exploring your products, or not taking any meaningful action, it often means they didn't find what they were looking for or the website didn't engage them.

The data in this key performance indicator can reveal several things.

• Specific products with a high bounce rate might have a page that loads slowly or poor content that doesn’t translate into a cohesive value proposition.
• There could be issues with the checkout pages, like requiring too many steps before completing the process.
• People prefer transparency, so hitting a customer with an unexpected fee or a complicated step could drive them away.

Any weak points in the user experience become identifiable with this KPI contributing to your data reports. In return, you can start tracking the necessary info to improve your e-commerce platform and boost sales.

Should I Track E-Commerce Marketing Metrics and KPIs?

Tracking e-commerce marketing metrics and KPIs is crucial for understanding how your online business is doing. Without this information, you're basically flying blind.

Data-driven decisions in this category allow you to tailor your e-commerce products to the audience’s needs. You’re gathering information while looking at how many people interact with your brand or leave reviews about their experiences.

Many businesses look at superficial metrics like the open rate for emails or the click-through rate of their outreach efforts. Although this information is essential, several other options might be more important for your e-commerce efforts.

The top metric to review is your ROI – return on investment. How much are you making compared to what you’ve spent? If this KPI is in negative territory, then it is time to reassess your strategy.

Another option is your cost per acquisition. How much are you spending to get new customers? Lower figures here are usually better, but you don’t want to sacrifice quality to generate more transactions to manage.

Even a straightforward metric, like organic traffic, can help you know how many people are trying to find your e-commerce platform. When someone discovers you without paid advertising, they are 12 times more likely to become a paying customer. 

Finally, the churn rate KPI is worth reviewing if your site offers subscription services. It is like your cost per acquisition, where a lower figure is often better.

What Are the Benefits of Tracking KPIs?

When e-commerce KPIs drive your decisions, you have data to guide your choices. Instead of wandering in the dark, you have a map and a light that lets you see the direction to choose. 

A business’s primary benefit when an e-commerce KPI decision-making philosophy is part of its vision and values is the ability to identify strengths and weaknesses. Maybe your social media game is strong, but your email campaigns are lackluster. KPIs help pinpoint what’s working and what needs a boost.

Here are some of the other positives that come when you start incorporating information from key performance indicators into your marketing efforts.

• ‍Resource Allocation: Time and money are limited. KPIs help you focus on strategies that are paying off, so you’re not wasting money or wasting productivity on inefficient processes.‍
• Realistic Goals: By tracking your performance, you can set achievable targets. You can see what is possible based on the past outcomes from your digital marketing reports, KPI results, and similar information.‍
• Improved Morale: Nothing boosts a team's spirits like hitting a goal! KPIs provide concrete evidence of a job well done.‍
• A Competitive Edge: Knowing your own metrics inside and out can also help you size up against the competition.

From steering day-to-day efforts to shaping your long-term strategy, KPIs are invaluable tools for any online business. Instead of manually navigating these information points, it helps to put them into manageable reports.

With Catchr, you have a tool that delivers data connections to transfer information from several platforms to reporting tools. If you work with Shopify, WooCommerce, Facebook Ads, or more, it can send that data to Looker Studio or Google Sheets.

What Happens If I’m Not Tracking E-Commerce KPI Data?

You cannot improve what you aren’t measuring. Without KPIs, it's hard to set goals or track your progress toward them. Your decision-making becomes less data-driven and more based on instinct, which is riskier.

You won't know which products are hot sellers or which marketing campaigns have become a flop. It becomes more challenging to spot trends or see if people follow through on an intent to buy.

Key performance indicators stop you from throwing stuff at the wall to see what sticks. You can check to see how things are going to make proactive adjustments.

What Reporting Tools Are You Using?

Two reporting tools are quite helpful for analyzing and implementing ideas from the e-commerce KPI information you receive: Google Sheets and Looker Studio.

Google Sheets is an incredibly powerful tool to use for digital marketing reporting. Don’t let its simplicity fool you. 

Multiple team members can update data and insights in real time. That means you can eliminate the endless version updates and email threads businesses use to coordinate efforts.

As a reporting tool, you can easily calculate ROI, conversion rates, or any other KPI. It has numerous functions that help you crunch that data into a usable resource for your digital marketing report.

With Looker Studio, you have a resource that lets you take a deep dive into the information your customers provide. You can easily track sales by time, region, or product category. Did that holiday sale work? The data will let you know in a few clicks.

You can see who your loyal customers are by generating reports about purchase history, engagement, and more. At the same time, inventory controls are available to avoid over- or understocking. 

Essentially, Looker Studio gives you the reports you need to find what works and what does not. In return, you can stop customers from looking at other options because you’re proactively solving problems and offering value.

Why Now Is the Time to Act with E-Commerce KPIs

You have data coming at you like a tsunami. Instead of ignoring this information because it feels overwhelming to sort through it, invest in the tools to help you manage it better.

After choosing the metrics that make sense to track, you can combine resources like Google Sheets or Looker Studio to get more from each digital marketing report.

With Catchr, you can connect data from different collection points to make your analytic efforts more efficient and comprehensive.

You don’t need a credit card to try Catchr. A 14-day free trial allows your e-commerce platform to experiment to see if this resource can help manage your information more efficiently.

Information is money in today’s business world. Start reviewing your e-commerce KPI data more efficiently, and tomorrow’s profits could skyrocket!

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