With the fierce competition in the e-commerce sector nowadays, both large and small businesses are forced to make the most out of what they have and so, getting more out of their business becomes every shop owner’s mantra.
With the increasing number of communication channels available to us today, we are hit with blocks of information from every part. Although we might be tempted to think that every bit of information about our customers is extremely important, the reality is that’s not quite so. And that’s why setting the right e-commerce KPIs and metrics for your business is important: it helps you stay focused on what really matters, achieve your goals easier and address issues faster.
There are two types of KPIs that you can set for your e-commerce business: high-level KPIs (used for evaluating the overall performance of your business) and low-level KPIs (used for evaluating specific areas/departments of your business). Every aspect of your business should be monitored and evaluated; not just your customers, but your investors, employees and management too. You know what they say: what you don’t measure, you can’t improve!
Tracking the most important e-commerce KPIs
Before we get started with how you can track them, I think it’s important to decide which are the e-commerce KPIs that you should track. When selecting the right e-commerce KPIs for your dashboard you have to consider the following:
- Relevance for your business: your KPIs should be linked to your business goals and should be supported from the executive level through to departmental managers and down to individual employees.
- Accountability: a person within your company should be accountable for each KPI
- Frequency of measurement: the frequency will vary depending on KPI and may range from hourly to quarterly
- Keep your dashboard simple: the whole point of data visualization is to declutter your data. Don’t put all your data on your dashboard – remember the K in KPI stands for key!
To help you select the top-notch metrics to follow, here are five of the most important e-commerce KPIs that will translate into a better CRO for your business, and therefore more revenue for your company:
- Customer lifetime value – the amount of money a customer will bring over his entire relationship with your e-commerce business
- Conversion rate – how many users were converted into customers
- Average order value – the average value of a transaction
- Gross margin – the amount of the total revenue that remains after you’ve paid all your bills
- Subscriber growth rate – the rate at which new users subscribe to your newsletters/e-mails.
Optimize your Customer Lifetime Value strategy
Get more valuable customers for a more profitable e-store.
Bonus, 2 KPIs that marketers usually overlook but really shouldn’t. For an extensive list of e-commerce KPIs that you should measure, check out this article.
The benefits of data visualization
Data visualization tools allow marketers to access and interpret data in real-time so that they can make highly informed decisions faster. A digital dashboard helps key players within a company to monitor different areas of the business and capture the overall performance of the organization.
There are many benefits of using data visualization tools, but here are a few that I think are the most important:
- Grasping information faster
- Identifying patterns
- Identifying emerging trends
- Identifying the factors that influence customer behavior
- Predicting sales volumes.
One of the struggles marketers face when it comes to data is interpreting it. According to a IDG Connect study, nearly half of respondents said they are finding it difficult to draw insights from data. Fortunately, there are lots of tools out there that can ease marketers’ job. For example, Omniconvert CRO Insights is an easy to use tool that helps marketers draw valuable insights in just minutes. Not only that, but they will also receive knowledge about where to start the optimization process and what types of experiments and persuasion tactics to implement. The tool knows exactly the pain points of e-commerce marketers all over the world, and only focuses on that: giving the right answers for difficult questions:
- do you have missed growth opportunities on your pages?
- which pages have the biggest potential to improve your sales and which ones should you start optimizing first?
- which are the friction points that make your customers abandon their carts?
- what traffic channels should you be focusing on?
If you’re more of a DIY person, you can make your own reporting dashboard. In order to do that, you will need two things: a spreadsheet app and a data source. The advantage of making your own is that you can fully customize your dashboard to fit your business needs.
Creating dashboards with Google Sheets
Google Sheets is probably the most common way teams collaborate when it comes to data and the great thing about it is that it can pull in data from web apps like Google Analytics automatically. But if you’re not a Microsoft Excel guru, making your own dashboard in Google Sheets can be challenging. Luckily for you, I have drawn out the steps:
Step 1: decide the KPIs you want to track. Anything can be tracked, but it’s ideal to only focus on the metrics that matter most to you (you will find more details about what KPIs you should choose in the next section).
Step 2: get data for each of the metrics you’ve chosen.
Step 3: building your dashboard. Install the Google Analytics plugin for Google Sheets.
Step 4: in a new sheet, click Add-ons in the menu and select the Google Analytics plugin, then Create new report.
Step 5: in the Report pane on the right side of your spreadsheet name your report and select which Google Analytics account, profile, and property to run the report from.
Step 6: choose which metrics to track with this report from the input box below your account info. Click Create Report.
Step 7: the extension will add a new “Report Configuration” sheet to your spreadsheet, and it’ll automatically populate it with your site analytics data.
Step 8: by default, the spreadsheet will show data from the past seven days, but you can change that to whatever time interval you want (30-days compared with the previous two 30-days is usually the best because it gives you a month-over-month evaluation).
Step 9: after you’ve set the beginning and end dates for your current period, duplicate the report so you have another one for the previous period’s traffic. You can do this step as many times as you want, depending on how far back you want to track your traffic.
Step 10: Now it’s time to run the report. Select Add-ons -> Google Analytics -> Run Report.
Step 11: The Google Analytics extension will automatically add the new sheets. Each of them is a report based on the metrics and timeframe that you previously chose, one for each period.
Step 12: Now you can really build your dashboard. Go to the original sheet and type in the metrics you want to display on your dashboard, then populate it with data.
Step 13: turn your metrics into charts. Highlight the cells that you want to represent visually, then click Insert -> Charts in the top menu.
Step 14: repeat this process for each metric and arrange the charts as you want.
Alternatively, you can create an e-commerce KPI dashboard directly within Google Analytics:
Step 1: In the top left corner of your account, click on +New Dashboard
Step 2: To get familiar with the tool first, select Starter Dashboard and give it a name
Step 3: Google Analytics will then pre-populate the dashboard with some data
Step 4: Each box is called a widget. A widget is able to load a metric or dimension (what Google Analytics calls metrics) while also letting you filter that data. To add a widget, click on +Add Widget in the top left corner of the screen
Step 5: You will notice two widget types: Standard & Real Time. The Real Time widget will show you data as it happens, but not all metrics will be available in real time (bounce rate for example). Some metrics need to be processed by Google Analytics before they become available to you. Select Standard and enter the details for the widget you want to create.
Step 6: If you’re not familiar with all the potential metrics that you can use, this Google tool can help you find the ones most relevant to your business. Here’s an example using Channel Grouping.
Step 7: You can also filter that data
Step 8: And if you save, you will get something like this
Step 9: Congratulations! You just created your own custom widget. After personalizing your e-commerce KPI dashboard, you should get something like this:
Now, this method should leave you with an appealing dashboard with your Google Analytics data. The problem is, for e-commerce businesses specifically, there is additional data that you need (like the one in your accounting system, advertising networks, hosted e-commerce platforms etc.) to make the best decisions. Some of this data can be imported, but if you need to check some KPIs hourly, you can’t wait for scheduled reports to refresh your dashboard. So you might want to look into other 3rd party software, like Klipfolio.
Klipfolio is a cloud-based dashboard application that makes critical data accessible, with a real-time accuracy. The platform is engineered to connect to over 500 data sources, including web-based services, social media platforms, and on-premise data warehouses, so you can easily analyze sales growth, opportunities, product performance, and even cannibalization rate.
There are different types of dashboards that you can build for your e-commerce business.
For example, a strategic dashboard is a reporting tool that helps you monitor the status of key performance indicators (KPIs), and are typically used by executives. The major benefit with this type of dashboards is that you get recurrent updates of your overall strategy, to know whether it’s working well or not. Strategic dashboards may be viewed once a day, and assist executives in staying on top of KPIs throughout the business.
On the other hand, an analytical dashboard is a reporting tool that helps you analyze large volumes of data so that you can identify trends, predict outcomes, and discover insights. Analytical dashboards are more common within business intelligence tools because they are typically developed and designed by data analysts. Analytical dashboards often include advanced BI features like drill-down and ad-hoc querying.
Another handy tool is DataDeck, an intuitive and flexible BI platform that helps marketers create amazing analytics reports in a matter of minutes. This tool is very easy to setup and use, with a great interface design and software design. It encourages transparency and team unity by making the same data accessible to everyone so that all your company staff, regardless of their expertise, can be on the same page and make decisions together.
What makes Datadeck great is that you can connect to (almost) any data source with just a click, you can track all of your marketing campaigns in a single dashboard, in real time, and you can fully customize the tool to fit your needs. The only downside is that, at this point, there’s still no social media integration.
Measuring e-commerce KPIs is an important step towards reaching business goals, and knowing that you have your KPIs and metrics regularly updated, all in the same place, and you can use all this data to run strategic team meetings is like a dream for any data-driven business. At a glance, you are able to view your entire marketing performance and know exactly what areas require improvement. So start building your dashboard now to understand what’s driving your business and how you can ensure future growth!
