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7 KPIs Your Ecommerce Business Should Be Tracking
As with any other sales or marketing-orientated business activity, ecommerce stores should have clearly defined KPIs (key performance indicators), making it possible for companies to monitor performance. Often, departmental targets are defined and judged separately. However, ecommerce is an amalgamation of sales and digital marketing KPIs, and this should be reflected in the goals you set.
There are many tools available for monitoring and analysis, but our Ecommerce SEO Agency would suggest using Google Analytics. Your marketing team is probably already using this to some degree, so tweaking it to suit your ecommerce KPIs will be relatively easy.
Data analysis for ecommerce gives you a high-level overview, showing if you’re on the right track or if you need to adjust to improve your results. Additionally, the in-depth data on offers will inform your strategy and tactics moving forward.
Let’s take a look at 7 ecommerce business goals and KPIs you should be tracking.
Organic Traffic & Conversion Rates
53% of website traffic is organic, meaning SEO (search engine optimization) should direct more users to your website above any other channel. If you’re not using SEO as a core pillar of your digital strategy, you should be. Organic traffic and organic conversion rates are two particularly impactful ecommerce KPIs you can cross-reference.
This comparison enables you to pinpoint areas for improvement. For example, if you generate 10,000 organic visitors per month and 0.5% of these convert, you know that your problem isn’t getting people to your site – it’s converting them to a sale. This data alone could point out numerous red flags. For instance: your user experience is poor, content isn’t informative or structured well, or your prices are too high – amongst other things.
Organic Revenue & Transactions
Like any sales-orientated department, revenue is possibly the most important of the ecommerce KPI metrics. It’s a must for any business to know how much revenue their ecommerce store is generating, but being able to go to the extra level of understanding how much money you’re generating organically is the perfect measurement of the success or failure of an SEO campaign.
Additionally, you can monitor transactions. While they aren’t automatically correlated – an increase in transactions doesn’t mean an increase in revenue – you’ll be able to highlight months, days, or times when transactions were higher than others. This data gives you the chance to capitalize and focus offers, promotions, or campaigns around those points in time.
Assisted Organic Conversions
In marketing, rarely will someone find your site organically and convert to a customer on their first visit. It usually takes numerous touchpoints before deciding to purchase, especially for more expensive products. There are many conversion attribution models you can use, or you can create your own. To get the best picture of which channels contribute most, we suggest monitoring assisted conversions.
If you use the last touch conversion model, you’ll find data is skewed toward direct traffic. This is due to the likelihood that a user came to your site organically, saw your product, left to do some research, then returned directly to your site via the URL bar. In these instances, the organic search would receive zero credit for the conversion, and you won’t know the value it brings to your business. Assisted conversions counteract this by assigning a value to each touchpoint along the way, making it a key part of ecommerce analysis.
Keyword Ranking Changes
SEO professionals are no strangers to monitoring keywords rankings – they’re crucial to the amount of traffic that reaches your website. With competition ever-increasing, you’re going to be battling more businesses than ever for the high-ranking positions. You can’t anticipate your competitors' keyword strategy, but you can be proactive and retaliate when they go on the offensive to optimize for specific key terms.
The faster you respond to your keyword position changes, the more likely it is that you’ll be to claim your ranking back. Additionally, it means you’re frequently updating your website content, showing search engines that your content is up-to-date and relevant – another important ranking factor.
Non-Branded Keyword Ranking
It’s easy to rank for your brand – usually, it's your domain name. Non-branded keywords are your battleground, the place where you fight for position and traffic with competitors – the more non-brand-related terms your website ranks for, the better – as long as they’re relevant to your product or service.
Using a tool such as Semrush and its domain overview tool will tell you which keywords you're ranking for. You can even exclude your brand name to save you from having to manually work through irrelevant data. Another top data analysis tip for ecommerce businesses is to enter your competitors' domain names and see what non-branded terms they’re ranking for. You’ll be able to cross-reference and pick out new words for you to target.
New Organic Users
Growing your market share comes down to attracting new customers. Yes, repeat customers are great, and building loyalty is crucial to long-term success. Yet, to ensure you're consistently generating revenue and growing your business, you must attract new users to your ecommerce store.
The keyword optimization you've done based on the findings in points 5 and 6 are the foundations for increasing your new user numbers. This metric is one useful way of measuring if your optimization has been a success. Theoretically, if you improve your ranking for popular terms and start ranking for new relevant words, you should see an increase in new users.
Return On Investment
An often forgotten element, but one of the most crucial, is ROI (return on investment). Once you have the data to hand, it’s a simple calculation that tells you if all your effort has been worth the reward.
If you’re working with an external agency, all you have to do is calculate the profit your ecommerce store has made and divide it by the investment you’ve made in the agency's services.
On the other hand, if you’re managing your ecommerce store in-house, you’ll have to monitor the optimization and maintenance hours put in by your team. This can be a little tricky, but it’s worth the effort. Multiply your employees’ hourly rates by the amount of time spent to get your total investment. Now, divide your ecommerce profit by the investment you calculated.
Remember, you’ll also need to factor in other investments, such as training, to get a true picture of your ROI.
US online sales grew by 14.2% in 2021, so setting ecommerce website goals should be at the top of the priority list for any business. Not only will using KPIs hold staff accountable, but it will also encourage them to use data to find solutions to their problems or to create exciting new ideas.
SEO plays a hugely important role in digital marketing, and ecommerce stores are no different, making it easy for marketers to adapt. Rather than learning new skills from scratch, they’re evolving their existing skillset and amalgamating it with sales KPIs to benefit your business, increase traffic to your site, and boost revenue.