Lockdown Your Key Performance Indicators
Knowing your KPIs, or Key Performance Indicators, is a must for any Shopify or e-commerce business looking for reliable and sustainable growth as they expand from small to medium to large scale operation. Here are three main factors you should include when searching for and considering your KPIs.
- Conversion Rate: Determining what your conversion rate is saying about your site's performance depends on what you're looking for. If you spend a large amount of your budget on advertising, you'll want to see a high conversion rate to make up for the cost. If however you're using a smaller company relying long tail conversions, that is using long tail keywords, there are two aspects to be aware of; sales pages, anywhere that someone clicks to learn more about your brand or products, that will drive interest towards purchasing, versus content and leading pages, that is blog posts, podcasts, promotional videos, ad campaign, anything that is meant to draw the audience in, collect their contact information and turn them into a customer.
Which of the two groups is your biggest factor in bringing in sales? Direct your resources and attention to what is shown to work.
- Cost Of Goods Sold. The best way to get a useful perspective on your COGS is to study a blended average of your margins across similar products, such as items that go together by use, season, design influence or sales combining.
The more detailed the data you have at hand, the more comparisons and contrasts you can set against each other, the better you will understand how your products sell individually, and can tailor strategies for them.
- Customer Lifetime Value: While certainly an important feature to consider as a KPI, your CLTV can be a tricky and deceiving data-set if you don't look at it in context. A long time customer may be considered high value as they've made many purchases over years, but a new customer may get ignored despite making more purchases in a single year. Look for the sweet spot, usually after a customer's third order. By then they're familiar with your brand, happy with the product and willing to further familiarize and associate with your business, including signing up for emails, text messages and even product and content subscriptions.
Get people to their third order no matter what, even if it means giving out some of your product just to get them hooked.
For more great information, tips and tricks about getting the most out of your KPIs, checkout this link from ShipBob.
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