We’re back for Day 2 of shop.org! If you missed it yesterday, we kicked off this exciting event with a run through of the most informative eCommerce KPIs and charts for marketing performance. Today, we hope you’ll find a few minutes between your Shop.org sessions and networking to take a look at our favorite outcome metrics.
While gauges for measuring outcomes may often fall into the realm of executive dashboards, there are a number of metrics that could potentially pave the way for your whole eCommerce team to get a better understanding of how their efforts are impacting business outcomes, and how they can make a difference to company objectives including reducing costs and increasing revenue.
These might be grouped around the following:
-Sales: unit sales (daily, weekly, monthly, quarterly, annual), top products, new customer sales vs. returning customer sales, average incremental sales per customer, average time to convert/sale, purchase intention (page views/goals), product affinity, product relationship
-Margin: average margin, revenue, gross profit margin (month/YTD), net profit margin, return on investment (ROI)
-Conversions: conversion rate, cost per acquisition (CAC), cost per conversion, average order value, orders completed, shopping cart abandonment rate, checkout abandonment rate, time to purchase or visits to purchase
-Accounting & Payment: cash position, receivables, payables, cost of goods sold, pending transactions & pending transaction value, time between purchase & final payment, fraud rate, payments confirmed, average cost of payment, payment type
-Shipping: total orders shipped, same day shipping ratio, shipments with issue
-Inventory: Inventory levels, stock availability
-Competitive Intelligence: Revenue as % market revenue
While all of the metrics above may interest your key stakeholders, if they only had time to consult 6 KPIs, those highlighted below come strongly recommended.
Another incredibly useful way to give your executives further context is by providing them with access to historical data so that they can compare current performance to past performance, future predictions of performance and also industry benchmarks (or even comparisons to competitor performance where available). These reference points can help them to understand what the numbers truly mean. By linking these KPIs to objectives and showing how they are progressing, you’ll add further invaluable context as all stakeholders will be able to see not only how you are faring compared to the past, or others, but also against your own expectations.
-Conversion Rate: by comparing your conversion rate to benchmarks you will be able to see how effective you are at encouraging conversions. The Nielsen Norman Group calculated that the average eCommerce conversion rate is 3%.
-Cost per Acquisition (CAC) and Cost per Conversion: depending on your objectives, calculating your cost per acquisition and/or conversion can demonstrate when you need to explore new options to reduce them
-Average Order Value (AOV): increasing average order value may help you to increase your profitability. Without having to focus on acquiring new customers, you may be able to increase revenue without blowing out expenditures where you can increase AOV
-Customer Lifetime Value (CLV):by calculating the AOV multiplied by the average retention time and number of repeat sales, we can understand the value of each customer. We can then work backwards to calculate how many clients we need to secure to meet our revenue objectives. Furthermore, an increase in CLV can indicate greater customer satisfaction. If we wish to improve CLV, we should look to improve personalization, customer interactions and experience and even reward loyalty
-Market Share: by understanding what percentage of industry revenue you have been capturing (and comparing this to your main competitors), you will get a better view of your short term growth potential and how successfully you are appealing to customers will become apparent. Long term growth could of course be much stronger than this if you are able to increase the relevancy of your products for consumers!
Data visualizations are enormously beneficial for helping us to quickly understand what is happening, and also to explain in further depth how different segments, dimensions or metrics interact.
They also add life to dashboards and make them more visually appealing and, in turn, far more digestible for the consumer of that data. There are so many valuable data visualizations that can help add further insight and readability to your eComm outcome dashboards, below we share three of our favorites:
Conversion funnels are invaluable to eCommerce teams in understanding at which stages of the conversion process consumers tend to fall out. This can provide particularly productive insight into which pages need improvement and which provide a more positive user experience.
Average Order Value and Revenue
By comparing our average order value and revenue side by side, along with registered customers, we can see the impact of the size of orders on total outcomes. As discussed previously, increasing AOV is a fantastic way to improve revenue outcomes without requiring further investment in acquisition.
Competitive Revenue Comparison
By comparing our revenue to our main competitor’s revenue and industry revenue we are able to understand how well we are addressing market needs and engaging potential customers. If we see that our revenue as a percentage of industry revenue is low, but our main competitors is high, we may glean that we are not effectively capturing the imagination of our market and can explore new ideas to better do so.
What other outcome metrics and charts do you show on your eCommerce dashboard? We’d love to hear your ideas!
If you’re at Shop.org today and you would like to discuss these or ask any questions about omnichannel retail dashboards, come and see us at stand 421!
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