Online marketing KPI’s
Aansturen van online marketing
Aansturen van online marketing
At the end of the day the best way to judge your marketing’s success is by measuring its growth in sales revenue. Fair warning—to do this you must have a strong stomach. Once you start measuring your marketing’s effect on sales growth, it will initially take some adjusting to weed out the marketing that does drive sales. Measuring your sales growth is, however, vital to the long-term health of your company. Not only does it serve as a good indicator when it comes to strategic planning, but it also allows for identification of growth trends.
The absolute or relative movement of sales.
It’s simple math. The more leads you get the more sales opportunities you have and the more sales opportunities you have the better are your chances of sales growth. The importance of leads to a marketing and sales department is comparable to the importance of something like gasoline to an automobile—it’s what drives them.
More leads get the more sales opportunities.
What is your customer worth to your business over the lifetime of your relationship? Any idea? Hello? Bueller?
The lifetime value of this customer would be:
The cost of customer acquisition is the cost associated in convincing a prospective customer to buy your company’s product or service. For example, let’s say you spent $200,000 on sales and marketing in a month and closed 20 new customers that month, then your COCA would be $10,000.
Total Marketing Investment / # of Customer Acquired
In general, B2B leads receive staggeringly slow responses from sales teams. In fact, a lead response study of 2,241 US companies found that the average first response time of B2B companies to their leads was 42 hours!
How fast does sales team respond to leads.
This is pretty straightforward. Of all your website visitors, how many of them convert and become leads? This KPI is helpful for measuring two things:
#The quality of your website’s traffic
Of all the website leads generated, how many get promoted to MQL status? This metric will help you understand the quality of the leads your marketing is generating. Do you have a low ratio where very few of your leads ever become marketing qualified? If so, you should probably look at the quality of your website traffic.
#How many get promoted to Marketing Qualified Lead status
Of all your MQLs, how many get promoted to SQL status? This metric looks at the cooperation between the marketing team and the sales team. If there’s clear communication and understanding between these two teams, you can expect this ratio to be high. However, there is typically a disconnect between these teams leading to disagreement as to the quality of the leads marketing is generating or the attention they get once sales has them. It might be the case that marketing is generating a ton of leads but sales is not working them resulting in a low MQL to SQL ratio. You, of course, will not know any of this if you are not measuring this KPI.
How many get promoted to sales qualified leads status.
This KPI is a direct reflection of the sales team’s ability to move qualified leads down the funnel to the quote/proposal stage. Why do some make it, and some don’t? There are a lot of factors that determine whether or not an SQL gets quoted (timeline, budget, competition, customization, etc.,), and it will be important to understand and study those factors in order to have better control over them.
Qualified leads down the funnel to the quote/proposal stage.
Basically, this is your sales team’s close ratio. Of all the prospects your sales team quotes, how many end up closing and becoming a customer? Is this ratio higher or lower than last year? Why? What can you do to improve it?
How many end up closing and becoming a customer also Is this ratio higher or lower than last year
These are the people visiting your site. They are the potential leads that turn into potential customers. Why wouldn’t you want to know more about them?
Your social media strategy is a huge part of your inbound marketing efforts because it allows you to distribute your content and interact with your current and potential customers. But you already knew that didn’t you?
Track your growth (think followers on Twitter and Likes on Facebook)
Your email marketing strategy is essentially your lifeline to your customer, aside from social media of course. As such, every email marketing campaign should be judged, analyzed, judged again and further analyzed.
Link building should be a cornerstone of your SEO strategy. When someone links to your website it means you’re building your street cred within your given industry. And the more people that link to your site as an authority, the better your search rankings and the more traffic your website will receive.
Link acquisition and your site’s overall link profile.
If the landing pages on your website are not drawing people in and converting them then you’re essentially dead in the water. A good way to judge whether or not your landing pages are working for you is to assess the amount of people who visit them and whether your CTAs are converting them.
Landing pages are constructed exclusively to guide website visitors
Knowing the performance of your blog posts is a good way to gauge what your customers like to read and don’t like to read, as well as when they like to read. This, as a result, builds your brand equity and allows you an opportunity to further create your content around what your customers want and need.
Blog posts should be a major contributor to website traffic.
As a general rule, the amount of time your visitors spend on your site is one of the best indicators of their engagement with your content.
The amount of time your visitors spend on your site is one of the best indicators of their engagement with your content.
There is no point generating high-quality content if nobody is viewing it! By measuring the number of unique visitors your site receives and tracking this metric over time, you’ll be able to determine whether or not your marketing campaigns are working.
Measuring the number of unique visitors your site receives and tracking this metric over time
Earning long-term brand followers is every bit as important as driving new leads to your site. Measuring the number of visitors who return to your site will tell you whether or not your content has achieved the necessary level of “stickiness.”
Measuring the number of visitors who return to your site will tell you whether or not your content has achieved
Leads are the lifeblood of a business, which is why generating leads is such an important part of any content marketing strategy. Keep an eye on this metric by tracking the number of lead gen form completions you receive, free trial signups you capture, and email subscribers or social media fans that you convert into future buyers.
Number of lead gen form completions you receive
A “bounce” occurs when a visitor hits one of your pages and then clicks “Back” without engaging further, so a high bounce rate usually indicates that people aren’t interested in what you have to offer (though, less commonly, it can also mean that they found the answers they needed and left).
A “bounce” occurs when a visitor hits one of your pages and then clicks “Back” without engaging further.
All leads are valuable, but leads generated from organic search traffic, direct referrals and social media tend to be more cost-effective than their paid counterparts. As a result, you’ll want to measure the percentage of leads you receive from organic sources to ensure you’re taking full advantage of these mechanisms.
All leads are valuable, but leads generated from organic search traffic.
Natural inbound links tend to provide higher quality leads and are more SEO value than links that you build manually. Measuring this metric will help you to keep an eye on the traction your content is gaining within your community. If you see a sharp uptick in unsolicited inbound links, there’s a good chance one of your content pieces is going viral!
Measuring this metric will help you to keep an eye on the traction your content is gaining within your community.
Inbound leads from content marketing and other organic sourcesare reportedly 61% cheaper than leads generated from outbound marketing, but that doesn’t mean they’re free!
Organic sourcesare reportedly 61% cheaper than leads generated from outbound marketing.
In theory, a well-executed content marketing strategy should make your viewers more receptive to your marketing messages. As a result, an interesting metric to track is the number of leads you go on to close.
Well-executed content marketing strategy should make your viewers more receptive to your marketing messages.
While measuring your overall lead-close rate is important, it can be difficult to identify specific ways to improve it without involving other data.
Measuring your overall lead-close rate is important, it can be difficult to identify specific ways to improve it without involving other data.
A July 2014 report from Shareaholic showed thatapproximately 30% of website traffic is driven by social media. Measuring your social shares will help you determine what kind of traction your content is receiving on social platforms, in addition to how well your business is taking advantage of this traffic source.
Measuring your social shares will help you determine what kind of traction your content is receiving on social platforms.
The goal of a good content marketing campaign isn’t necessarily better SEO performance, but the two often go hand-in-hand.
You increase the number of keywords you can potentially be found for. At the same time.
Total website traffic is an important metric, but it’s meaningless if that traffic isn’t funneled to the landing pages where visitors can actually take one of your desired actions (like, for example, opting-in to your email list or buying a product).
Where visitors can actually take one of your desired actions.
Next up, while you’re looking at your landing pages’ overall traffic, take a look at the external sites that are sending traffic your way. Identifying these web pages – especially the ones that are driving conversions, not just traffic – gives you important insight into the channels you should focus your off-site content marketing efforts on.
While you’re looking at your landing pages’ overall traffic, take a look at the external sites that are sending traffic your way.
Similarly, try to see if pages within your own site are driving traffic and conversions to your landing pages. Doing so will show you which under-performing pages need a little extra love and what types of content are most likely to drive referrals to your landing pages.
Try to see if pages within your own site are driving traffic and conversions to your landing pages
Identifying which keywords to optimize your website for is one of the most important factors a digital marketer must assess.
Optimize your website for is one of the most important factors a digital marketer must assess.
Finally, reader comments may seem like a strange metric to track when it comes to content marketing campaigns, but doing so will give you a rough idea of how well visitors are engaging with your content.
How well visitors are engaging with your content.
The social reach of your content is an indicator of the impact it’s having on brand awareness – at least, if it’s the right type of content (as discussed above).
Measuring the full social reach of your content isn’t as easy or accurate as it used to be
Another great way to measure how awareness of your brand is changing is to track how often it is mentioned online.
Measure how awareness of your brand is changing is to track how often it is mentioned online
Some marketers measure the impact of their digital campaigns almost solely by the number of links the campaigns generate. They are doing themselves, and their hard work, a disservice.
Measure the impact of their digital campaigns
The number of people searching for your brand online tells you a lot about how general awareness of your brand is changing. Sadly, tracking this used to be much easier than it is today. Before Google started hiding keyword data under “not provided,” monitoring branded searches was simple. You just had to look at your keyword data in the Google Analytics’ traffic report. While some of this data is still available, it’s in such small quantities that it’s far from a reliable data source.
How people searching for your brand
This is where most measurement efforts begin. If you’re trying to measure the number of people who see and interact with the content your company produces, you’re measuring both reach (a quantity metric) and engagement (a quality metric). But reach and engagement metrics also tell you a lot about the audience themselves—their likes and dislikes, interests and pain points.
Measuring both reach (a quantity metric) and engagement (a quality metric)
If you’re trying to get your arms around the increase and optimization of digital marketing and sales efforts, that’s a whole new ballgame compared to reach and engagement. Typically, the KPIs here connect the content you produce to the degree to which it raised awareness about your product and services—including finding new leads and increasing interest with existing customers.
Increase and optimization of digital marketing
If you’re grappling with just how satisfied your existing customers are—and how likely they are to recommend your brand—you’re measuring loyalty and advocacy. This effort could include both identifying existing brand advocates and finding highly satisfied customers who can be groomed to share information about your company on social.
How satisfied your existing customers are—and how likely they are to recommend your brand
When you’re looking at the impact social media has on brand reputation, you’re measuring not just online media outlets and any chatter about your brand from individuals, but also how well your company is doing on the social customer care front.
Measuring not just online media outlets and any chatter about your brand from individuals
Sales growth tells you whether revenue is increasing or decreasing, and at what rate. This metric can be applied to
Sales growth tells you whether revenue is increasing or decreasing.
Use this metric to gauge the ability of individual partners to generate revenue for the company. Trending data can help
To gauge the ability of individual partners to generate revenue for the company.
Bookings represent a commitment to buy, or a sale not yet made. This metric can help with sales forecasting. An
This metric can help with sales forecasting.
This metric measures the average value of each purchase order processed by channel partners. Purchase orders
Measures the average value of each purchase order processed by channel partners.
An active opportunity is a qualified lead. Measuring the number of top active opportunities by partner helps with sales
Measuring the number of top active opportunities.
How long does it take from the time a lead is generated until the sale is consummated and the order shipped? This
How long does it take from the time a lead is generated until the sale is consummated and the order shipped.
How efficient is the order fulfillment process? Converting orders to cash impacts not only the revenue side
How efficient is the order fulfillment process.
This metric may point to a fall-off in demand or a problem with product quality, among other possibilities. The sales
This metric may point to a fall-off in demand or a problem with product quality, among other possibilities.
This KPI measures revenue generated by an incentive program (or other marketing tactics) compared to the cost of
Measures revenue generated by an incentive program.
This metric measures the contribution that an incentive program (or other marketing tactic) makes toward increasing
Measures the contribution that an incentive program.
This indicator tracks the current status of all orders and classifies them based on criteria such as shipped, back-ordered
This indicator tracks the current status of all orders.
This KPI measures how many times a year your channel partners are able to sell their entire inventory. It’s an indicator
How many times a year your channel partners are able to sell their entire inventory.
This KPI measures orders that cannot be filled at the time of purchase. Customers who have to wait for the products
Measures orders that cannot be filled at the time of purchase.
By performing regular customer satisfaction surveys, you can gauge how many of your customers would rate their level of satisfaction as very or extremely satisfied. The more customers who rate their experiences highly, the better your customer service.
How many of your customers would rate their level of satisfaction as very or extremely satisfied
One way to measure customer service is to track changes in customer satisfaction over time. If, for example, satisfaction has gone down over the last couple of years, then you’ll know a change is likely in order. But if it’s improving, or if you’ve already achieved high levels of customer satisfaction and they’re staying constant, then you’ll know you’re on the right track.
Measure customer service is to track changes in customer satisfaction over time.
Customers who are happy with the service you provide are likely to stick around and do more business with you. So if you’re bringing back a fair amount of customers regularly, that’s a pretty good indication that you’re providing good customer service.
Customers who are happy with the service you provide.
And customers who are very happy with your customer service are likely to even go a step further and recommend your company to others. So your company’s Net Promoter Score, or rate of people who would recommend your business to others, can be a good indication of where your customer service stands and another way to measure customer service.
Rate of people who would recommend your business.
After someone from your customer service team interacts with a customer, how likely are they to make a purchase or take some other kind of action? If your customer service is good, this number should be fairly high.
How likely are they to make a purchase or take some other kind of action
Even customers who like your brand might not choose you over your competitors for every single interaction or purchase. So while general satisfaction and customer retention are good metrics to measure service, it’s still important to see how your company stacks up against competitors.
Customer retention are good metrics to measure service.
Part of providing great customer service is resolving issues in a timely manner. If you can respond to customers and get them answers quickly, they’re more likely to be pleased with the experience. So, if you’re able to keep that resolution time relatively low, that could be an indication of good customer service and yet another way to measure customer service.
(Total Resolution Time/Total complaints) In a certain time
If you are able to resolve most issues fairly quickly, then you shouldn’t have too many issues to deal with at any one time. And if you do, then it could indicate that your customers have a higher-than-usual volume of complaints.
Resolve most issues fairly quickly
You can also look at all of the issues that your customer service team has resolved to get an idea of your customer service. No matter how great your company, there are bound to be issues and complaints. But if you’re able to solve them quickly and in a way that makes your customers happy, that’s an indication of good service.
Average Resolved issues in a certain time.
Different types of businesses use different methods to measure employee productivity. But it’s an important factor when it comes to customer service. If you want customer issues to be resolved in a timely manner, employees need to do their jobs effectively.
Employees need to do their jobs effectively.
When your employees are happy, they tend to stick around. And when you are able to keep employees around for long periods of time, they’re more likely to feel comfortable and empowered in their jobs. This means they’re also likely to provide service that lives up to your standards.
How do customers view your company overall? What words would they use to describe your brand? And how do their opinions line up with your expectations? By obtaining this sort of feedback from customers, you can measure customer service and get a pretty good indication of where you stand in your customers’ eyes. And you’ll know what qualities you might need to work on to get customers to see your brand in that particular light.
How do their opinions line up with your expectations
No matter how great your service is, you’re going to get complaints at some point. But if you reach a point where you’re receiving an unusually large number of complaints, or your complaints have been steadily increasing without overall customer growth, there could be a problem. Keep an eye on how those numbers change over time. This could also tie in to the number of resolved issues, if you’re tracking that, as well.
Keep an eye on how those numbers change over time.
Cash flow can be a great performance indicator for many different business factors. Customer service is such an important factor that it can have a really big impact on your bottom line. If your service is bad, it could drive customers away, decrease referrals and cause potential customers not to complete purchases. But if it’s good, customers are likely to come back, tell their friends and have a big impact on your company’s overall profits.
Customer service is such an important factor that it can have a really big impact on your bottom line.
8-10 simple questions taken from customer post-chat surveys can help you identify the happiness score of your customers. Every business is unique, there’s no definite list of questions for everyone, so it’s up to you to work on the questionnaire. Ask your customers if they like your product or service, how they feel about customer support, delivery and ease of your website use.
How they feel about customer support
Include the following question to your post-chat survey: ‘On a scale of 0-10, how likely are you to recommend [PRODUCT / BRAND / SERVICE] to a friend?’ – and ask why the customer gave such a score. Once you’ve collected responses to the question, categorize them in the following way:
how likely a customer would recommend your company to a friend
There’s a definite formula for such metrics:
ability to keep a paying customer over a period of time
What is the total number of live chat sessions a customer service rep has processed during a day / week / month? Define an average number a separate rep can take during a working day without over-pressure. Is this a growing number?
Average number a separate rep can take during a working day without over-pressure.
How many live chat sessions were closed due to customer abrupt inactivity?
How many live chat sessions were closed due to customer abrupt inactivity?
How many times did a customer service rep help with sales?
How many times did a customer service rep help with sales?
Obvious fact – the more questions and complaints are solved by a customer service representative, the better for your business.
The more questions and complaints are solved by a customer service representative
How long did customers wait for the first words of a customer service agent on average?
How long did customers wait for the first words of a customer service agent on average?
WOW effect is made only by people for people. The more engaged, happy and loyal your employees are, the more likely they would create magic for your customers. To measure the engagement of your employees, you should observe their work over time, ask their feedback on the process and show interest in their lives and personalities.
Measure the engagement of your employees, you should observe their work over time, ask their feedback on the process and show interest in their lives and personalities.
A basic KPI to start with – how many users (customers, households) have you managed to enrol in your loyalty programme. And how does this compare to the number of non-members.
How many users have you managed to enroll in your loyalty programme
So you now know how many members you have got. But how many of them are active?
How many members you have got. But how many of them are active?
How many new members were recruited in the last period?
How many new members were recruited in the last period?
It’s inevitable that some members of your loyalty programme will lapse (another potential KPI).
It’s inevitable that some members of your loyalty programme will lapse.
So with these volumetrics established you can measure whether your membership base is in net growth or decline.
Measure whether your membership base is in net growth
Most loyalty programmes are actively seeking to recruit new members.
Measuring which channel, or combination of channels
Consumer consent is a hot topic that will only increase in scrutiny.
Measured for each of the segments that you have volumetrics
Revenue is the ultimate driver and should be measured for each of the segments that you have volumetrics for (ie. members/non-members; active/inactive members).
Measured for each of the segments that you have volumetrics.
The amount or weight of purchase that a customer or loyalty programme member spends with you in a particular time period.
Member spends with you in a particular time period
How often a customer transacts with you.
How often a customer transacts with you.
The amount that a customer, member or non-member spends with you on each visit.
ATV is a function of Frequency X Spend per Visit
This KPI will help you monitor how pervasive your loyalty programme is with your customer base.
How pervasive your loyalty programme is with your customer base
This metric looks at the cost of your programme and divides it by the volume of programme members.
Metric looks at the cost of your programme and divides it by the volume of programme members
All CRM or loyalty programmes are highly likely to be predicated on engaging customers to earn their loyalty and keep them transacting with you for longer.
So measuring return, churn or attrition rate is essential.
With your customer base split into members and non-members of your programme, it’s important to track the differences in behaviour between the two groups and understand if there are differences in customer value.
Track the differences in behaviour between the two groups and understand if there are differences in customer value
This is, in my opinion, the most important marketing metric to track from day 1 and then all through the lifespan of your business.
People searching for your brand are more likely to either convert as customers or are returning customers.
All advertising platforms you utilize will provide metrics on impressions (or cost-per-impression), i.e. the number of times your ads are served to their audience.
All advertising platforms you utilize will provide metrics on impressions
Facebook measures unique impressions with the ‘reach’ metric.
The number of people that have seen your ads at least once
The YouTube impression metric you want to pay attention to is ‘Views.’
Ensure that you understand the time duration a video is watched in order to be classified as a view on across all platforms.
In AdWords and Bing Ads, you want to pay attention to the ‘Impressions’ metric, which is the number of times your ads are shown on search result pages or the display network on both platforms.
The number of times your ads are shown on search result pages
Pay attention to the ‘Total Impressions’ metric on Google search console on a monthly basis.
The number of times your website was served as a result on Google’s organic search result
When reaching out to potential media partners and influencers, you will need to better understand their audience reach and readership numbers (for bloggers).
understand their audience reach
If you advertise on TV, want to sponsor a podcast or media, you will negotiate on the basis of the ‘Reach’ metric, i.e. how many people are likely going to view your commercial.
How many people are likely going to view your commercial
These are the most important on-site traffic key performance indicators you should measure on a monthly basis.
These metrics can be found in Google Analytics, the easiest way to establish measurement on your website.
If a significant amount of inbound traffic to your ecommerce store comes from Google, then you should be tracking these Google Search Console metrics on a monthly basis.
Sessions and Unique Page views
These are the top six email engagement KPIs for ecommerce sites that your email marketing team should report to you on a monthly basis.
Email list growth rate:
Social media metrics can provide a lot of value to your ecommerce company. These are the top social media engagement KPIs you should track on a regular basis:
Likes per post:
Tracking the actual number of transactions, not just total revenue, is important for calculating AOV (3d, below) and understanding how customers interact with your online store.
Actual number of transactions
This is total sales divided by the number of transactions.
Total sales divided by the number of transactions.
Micro conversions are predetermined steps that typically occur before a sale. Here are two of the most popular types of micro-conversions:
Ecommerce teams should track the relationship between micro conversions to macro conversions (sales/revenue).
Since the total amount of revenue generated is very obvious, you need to go deeper on sales data by digging into:
Total amount of revenue generated
You will want to set a quarterly or biannual benchmark on how many visits it takes on average for new customers to make their first purchase.
How many visits it takes on average
This is the total number of sales divided by the total number of sessions to your store.
Total number of sales divided by the total number of sessions to your store
Micro conversions, the steps that typically occur before a sale, are critical in the buying funnel for many businesses.
Calculate conversion rates for micro conversions by dividing the total number of the specific micro conversion (their goal completions in Google Analytics) by sessions and multiplying the value by 100.
When your conversion rate is low, you need to understand how many visitors had an inclination to buy.
This metric indicates the percentage of visitors who added products to their shopping cart but did not complete the checkout process.
CPA is a critical marketing and business metric, informing your bottom line and helping to measure the effectiveness of your paid media efforts.
Measure the effectiveness of your paid media efforts
You know what the value of a visitor is, but what about the value of an average sale?
If your website isn’t optimized for mobile or if you’re not tracking traffic from your mobile site, you’re in trouble.
Tracking traffic from your mobile site
Here are the key loyalty metrics that you can use as primary KPIs to evaluate how your business retains customers:
Repeat purchases rate:
Customer lifetime value (CLV, CLTV, LTV or LCV) is the expected revenue generated by future sales interactions with a customer.
Average Customer Lifetime Value > Average Customer Acquisition Cost
If your LTV is low, it could be that many of your customers buy once and never return.
Churn is the percentage of your customers who do not come back to your site.
Net Promoter Score (NPS) is a very simple survey that measures how likely a customer is to recommend your brand to a friend.
Survey that measures how likely a customer is to recommend your brand to a friend.
One other very important customer satisfaction gauge is seller reviews and in-store product reviews. These should be tracked and segmented monthly.
Seller reviews and in-store product reviews
Conversion rate is an important KPI for all websites, including eCommerce stores. This can measure action that you want someone to take, such as clicking on a button or signing up for a list. For eCommerce stores, your conversion rate is the percentage of visitors to your site who make a purchase and convert into actual customers. To determine your conversion rate, you take the total number of sales divided by the total number of visits to your site.
Percentage of visitors to your site who make a purchase and convert into actual customers
Average order value (AOV) is also a vital metric for online stores. Your average order value can give you a better understanding of your clients’ spending habits, including which products fit their price range. Tracking your AOV can help you identify opportunities to upsell, cross-sell or promote special offers. To get this number, divide the sum of generated revenue by the total number of orders.
Total Sales/Number Of order
Cart abandonment rate refers to the percentage of shoppers who add items to their cart, and then leave your site completing their purchase. Studies have show the average eCommerce cart abandonment can be as high as 70%. Customers can leave items in their cart due to a complicated checkout process, missing information, the cost of a product or the cost of shipping. To find out your cart abandonment rate, take the number of people who abandoned the checkout process in your store, and divide it by the total number of people who entered the checkout process, including those who did and did not complete their purchase.
Percentage of shoppers who add items to their cart, and then leave your site completing their purchase
The amount of traffic to your site is another important KPI for all websites. For eCommerce stores, you’ve got to drive consistent traffic to make consistent sales. This metric shows you how many people are visiting your site on a daily, weekly and monthly basis. You can also track new and returning visitors as an important KPI of the traffic to your site.
How many people are visiting your site on a daily, weekly and monthly basis
This indicator allows you to track how much time your customers spend on your website. This helps you see whether your customers are engaged by the content on your site. When the average time on your site is low, it can indicate issues with your navigation or landing pages.
How much time your customers spend on your website
Just as the average time on site, this KPI will show you if your content is engaging. In Google Analytics, it’s called “Pages/Session”. This metric is as simple as the name implies – it’s the average number of pages viewed for each visit to your site.
Average time on site
Another measure of engagement, this shows you where your customers lose interest so you can make improvements to the content on those pages. Exit pages can also indicate where you need to change your business strategy. For example, if you see that people abandon your site after reviewing your return policy or shipping costs, you may need to reevaluate your approach to shipping and returns.
Measure of engagement, this shows you where your customers lose interest
It’s important to track how customers arrive at your site. This KPI can help you determine which sources are sending the most visitors to your store. Is it organic search, PPC ads or social media? Monitoring your referral sources helps you see which marketing campaigns are working well and which campaigns need more work.
How customers arrive at your site
Your bounce rate is the percentage of visitors who leave your website immediately after arriving. When your bounce is very high, it can indicate that you’re using the wrong keywords in your SEO or PPC, your website is not clear or it’s too complicated to use. Any website that is not mobile-friendly is may also have a high bounce rate. You can calculate this KPI easily: divide the number of visitors who leave your site immediately by the total number of visitors. Bounce rate is also an important KPI for search because Google takes this metric into consideration when deciding how to rank your site.
Percentage of visitors who leave your website immediately after arriving
This KPI shows how fast you are adding subscribers to your email list. This is the number of new subscribers minus unsubscribes, divided by the total number of subscribers in your list. When you have email lists for different segments, you can setup KPIs for each group and see which group is growing the fastest.
How fast you are adding subscribers to your email list
You email bounce rate is the percentage of undelivered emails from your total emails sent. These messages are returned by the recipient’s mail server. There are two categories of email bounces: hard bounces and soft bounces. This KPI indicates the health of an email list, and can tell you whether it’s “aging” quickly, with too many email addresses that are no longer valid.
Percentage of undelivered emails
You can calculate this KPI by taking the number of people who open a particular email campaign and dividing it by the number of sent emails that didn’t bounce. Your subject line and the name you use in the “From:” field are important factors that influence your email open rate.
Dividing it by the number of sent emails that didn’t bounce
Your email click-through rate (CTR) shows how many people clicked on links in your emails. The average email CTR mostly depends on the industry, but according to Mailigen, B2C newsletters tend to have lower CTR than B2B, typically around 2-3%.
How many people clicked on links
There are several social media engagement metrics you can track. For example, the likes per post, shares per post, comments per post and clicks per post. Don’t forget to keep track of all your social media accounts – Facebook, Twitter, Instagram, etc. This KPI tells you which social network brings the most customer engagement to your business.
Likes per post, shares per post, comments per post and clicks per post.
Pay-per-click (PPC) shows you how much you spend each time someone clicks on one of your ads. This KPI is typically used for search engine or social media advertising campaigns, and is also known as cost-per-click (CPC).
How much you spend each time someone clicks on one of your ads.
This metric shows you how many of your customers return to your store to make another purchase. Customer retention is vital for long-term growth, and it’s much easier to encourage repeat business than to acquire new customers. You can use this KPI to measure customer loyalty and also help you plan sales based on when customers return to your store.
How many of your customers return to your store to make another purchase
Your net profit is your company’s net revenue less any costs. This KPI shows you how much profit your business generates after all expenses. It determines if your business is successful or not. A straightforward way to increase net profit is to increase your revenue and decrease your expenses. You can use this KPI to measure the performance of your entire store, or specific products and categories.
How much profit your business generates after all expenses.
This is an estimate of the total amount of money each person will spend throughout their time as a customer of your store. Why is this important? Customer lifetime value indicates how much you can spend on acquiring new customers. This KPI carries an important rule: the average customer lifetime value should always be higher than the average customer acquisition cost.
Total amount of money each person will spend throughout their time as a customer of your store
Following from the previous KPI, cost per acquisition tells you how much you need to spend to gain a new customer. CPA is often used to measure how much to pay for affiliate marketing, or how high you should set your bid and budget for PPC advertising
How much you need to spend to gain a new customer
It’s important to know how much of the price of your products is profit and how much is the cost of goods sold. This basic KPI is your profit margin. Use the average of your profit margin across all of your products to gain a more representative picture of your store’s profit margin, or compare profit margins to identify the most profitable products and categories in your store.
How much of the price of your products is profit and how much is the cost of goods sold
Your customer retention rate shows you how many active returning customers you have during a given time period. It is the percentage of customers you keep relative to the number you had at the start of that period of time. Like returning customers, this can indicate customer loyalty and where you have bottlenecks in your business. Use this KPI to monitor one-time purchase habits for specific products and categories, then look for ways to bring these customers back to your store with discounts, or upsell and cross-sell to increase the value of their purchase.
Customer retention rate shows you how many active returning customers you have during a given time period
This KPI measures the average number of orders your active customers made during a specific time period. While your customer retention rate measures the percentage of active customers you have during that time, your orders per active customers tell you how active these customers really were based on the number of purchases they made. Another great KPI for customer loyalty and highlighting underperforming items and categories.
Measures the average number of orders your active customers made during a specific time period
This is the number of tickets your customer support email receives. While this KPI doesn’t need much explanation, it can tell you a lot about your store. You may need to add more information to your FAQ page, or include instructions with each shipment to prevent lost time and resources on routine customer support.
Number of tickets your customer support email receives
Similar to the previous KPI, this metric shows the number of live chat requests on your eCommerce website. The number of chat requests can also help you find areas for improvement such as your FAQ, and help you identify specific products or categories which require more “pre-sales” information for customers to make a purchase decision.
Metric shows the number of live chat request.
This measures the average time taken by your customer service agents to resolve a ticket. You can improve this KPI by providing more information to your customers, and making sure your customer service team has everything they need to complete routine customer requests.
Average time taken by your customer service agents
Your Net Promoter Score (NPS) is another KPI for customer loyalty, and also helps measure the overall customer experience of your store. This metric is taken from surveying customers and asking them to rate how likely they would be to recommend your business to a friend.
Measure the overall customer experience of your store
Time to purchase is the amount of time it takes for a customer to buy your product. While some people may make a purchase the first time they visit your site, others may visit two, three or even more times before they decide to buy from you. Keep in mind that it also depends on the industry. When you are selling more expensive and complex products, people will do more research before buying.
Time to purchase is the amount.
Product reviews are an important customer satisfaction metric that you should track monthly because they help people make a purchase decision. Ask your satisfied customers for reviews. When you get a negative review, you should immediately follow up and see what you can do to improve customer experience in the future.
Customer satisfaction metric that you should track monthly.
Knowing which products perform the best in your store helps you decide which products to feature. You can use this KPI store-wide, or within individual categories. This can also tell you when it’s time to stop carrying a particular item that isn’t selling well.
Products perform the best in your store.
Like site traffic, the number of orders you receive is an important KPI of the overall health of your store. You’ll need this metric to determine your average order value, and you can also use this KPI for specific time periods to see when you should create a sale or email a discount offer to your subscribers.
Determine your average order value, and you can also use this KPI for specific time periods.
In addition to your top products, you should also measure your top performing categories. This KPI can tell you which categories to feature on your main page, and the best way to group your products for your customers.
Measure your top performing categories.
This metric shows you which categories had a purchase during a specific time period and which did not. Use this KPI to see which categories perform better at specific times of the year, and then feature these categories during those times, or create a promotion for your customers a few weeks in advance to boost your sales.
Which categories had a purchase during a specific time period and which did not?
The search giant generates 62% of all traffic and 63% of all revenue. This is down from 69% of traffic and 67% of revenue in last year’s study. In numerical terms, Google is growing — it’s simply that the big G’s share of the pie is in decline.
What Sources generate the most traffic
This occurs when Google Analytics doesn’t recognize a source by default, like people sharing links on WhatsApp. Dark traffic shows up as direct traffic in Google Analytics. Direct traffic grew from 17% to 18% of traffic.
Direct traffic grew from 17% to 18% of traffic.
It now takes 12% more clicks to generate a million euro online than it did 12 months ago, with 360,000 clicks being the magic million-euro number in 2017.
2017 is the first year mobile claimed more sessions (52%) than desktop (36%) and tablet (12%) combined. Desktop generates 61% of all online revenue, with users 164% more likely to convert than those browsing on mobile. Plus, when desktop users convert, they spend an average of 20% more per order than mobile shoppers.
What devices are people usage to browse and buy.
E-commerce websites averaged 1.6% overall. Travel came in at 2.4%. Online-only retailers saw 1.8% conversion rates, while their multichannel counterparts averaged 1.2%
Commercial metrics : AOV and Conversation Rates
Conversion rates for food ordering sites are fifteen times those of typical retail e-commerce!
Analyze which website metrics correlate with e-commerce success
The strongest correlation in the study was between time spent on a website and conversion rate (0.6 correlation). By increasing time on site by 16%, conversion rates ramp up 10%. Pages per session also correlated solidly with revenue growth (0.25).
According to Forbes, Google is the world’s second most valuable brand. Our figures agree. People who got more than average organic traffic from Google enjoyed a savagely strong conversion rate (0.48). It seems that when Google gives prominent organic coverage to a website, that website enjoys higher trust and, in turn, higher conversion rates from consumers.
People who got more than average organic traffic from Google enjoyed a savagely strong conversion rate
Higher-than-average tablet sessions correlated very strongly with high average order values (0.4). However, pricey purchases require more clicks, no matter the device.
Average order value
Your best-converting customers are always your returning loyal customers. Typically they show up as direct traffic, high levels of which correlated very strongly with conversion rates (0.35).
Your best-converting customers are always your returning loyal customers.
Average site speed was 6 seconds. This is far higher than the generally recommended 2 seconds. There was a strong inverse correlation between average page load time and revenue growth (0.25). Reducing the average load time by 1.6 seconds would increase annual revenue growth by 10%.
What are the average on-site engagement metrics?
Websites that got more mobile pageviews (0.25) and more tablet pageviews (0.24) grew revenue faster.
Email delivers three times as much revenue as Facebook on a last-click basis. Those who get more traffic from email also enjoy a higher AOV (0.24).
What sources generate most revenue
Websites with a higher share of Bing CPC traffic tend to see a higher AOV (0.22). This, coupled with lower CPCs, makes Bing an attractive low-volume high-profit proposition. Bing has made the route into Bing Ads much easier, introducing a simple one-click tool which will convert your AdWords campaigns into Bing Ad campaigns.
Average order value
Websites with more Pinterest traffic enjoyed higher AOVs (0.22). This demonstrates Pinterest’s power as a visual research engine, a place where people research ideas before taking an action — for example, planning a wedding, designing a living room, or purchasing a pair of pumps. The good news for digital marketers is that Pinterest recently launched its self-service ad platform.
Pinterest traffic enjoyed higher AOVs
Ecommerce retailers can monitor total sales by the hour, day, week, month, quarter, or year.
Total sales by the hour, day, week, month, quarter, or year.
Sometimes called average market basket, the average order size tells you how much a customer typically spends on a single order.
The average order size tells you how much a customer typically spends.
Calculate this KPI by subtracting the total cost of goods sold from total sales.
The total cost of goods sold from total sales.
Average margin, or average profit margin, is a percentage that represents your profit margin over a period of time.
Percentage that represents your profit margin
This is the total number of transactions. Use this KPI in conjunction with average order size or total number of site visitors for deeper insights.
The total number of transactions.
The conversion rate, also a percentage, is the rate at which users on your ecommerce site are converting (or buying). This is calculated by dividing the total number of visitors (to a site, page, category, or selection of pages) by the total number of conversions.
The rate at which users on your ecommerce site are converting.
The shopping cart abandonment rate tells you how many users are adding products to their shopping cart but not checking out. The lower this number, the better. If your cart abandonment rate is high, there may be too much friction in the checkout process.
How many users are adding products to their shopping cart.
This metric shows a comparison between new and repeat customers. Many business owners focus only on customer acquisition, but customer retention can also drive loyalty, word of mouth marketing, and higher order values.
Comparison between new and repeat customers.
COGS tells you how much you’re spending to sell a product. This includes manufacturing, employee wages, and overhead costs.
How much you’re spending to sell a product.
Tracking this KPI will tell you how much your business is growing compared to others within your industry.
How much your business is growing compared to others
This KPI tells you which products are purchased together. This can and should inform cross-promotion strategies.
Which products are purchased together.
This is which products are viewed consecutively. Again, use this KPI to formulate effective cross-selling tactics.
This KPI could tell you how much stock is on hand, how long product is sitting, how quickly product is selling, etc.
How much stock is on hand, how long product is sitting, how quickly product is selling.
It’s important to gauge your success and growth against yourself and against your competitors. Monitor your competitors’ pricing strategies and compare them to your own.
Gauge your success and growth against yourself and against your competitors
The CLV tells you how much a customer is worth to your business over the course of their relationship with your brand. You want to increase this number over time through strengthening relationships and focusing on customer loyalty.
How much a customer is worth to your business
RPV gives you an average of how much a person spends during a single visit to your site. If this KPI is low, you can view website analytics to see how you can drive more online sales.
How much a person spends during a single visit to your site.
For an online retailer, the churn rate tells you how quickly customers are leaving your brand or canceling/failing to renew a subscription with your brand.
How quickly customers are leaving your brand or canceling.
CAC tells you how much your company spends on acquiring a new customer. This is measured by looking at your marketing spend and how it breaks down per individual customer.
How much your company spends on acquiring a new customer.
Site traffic refers to the total number of visits to your ecommerce site. More site traffic means more users are hitting your store.
More site traffic means more users are hitting your store.
New site visitors are first-time visitors to your site. Returning visitors, on the other hand, have been to your site before. While looking at this metric alone won’t reveal much, it can help ecommerce retailers gauge success of digital marketing campaigns. If you’re running a retargeted ad, for example, returning visitors should be higher.
Returning visitors should be higher.
This KPI tells you how much time visitors are spending on your website. Generally, more time spent means they’ve had deeper engagements with your brand. Usually, you’ll want to see more time spent on blog content and landing pages and less time spent through the checkout process.
How much time visitors are spending on your website.
The bounce rate tells you how many users exit your site after viewing only one page. If this number is high, you’ll want to investigate why visitors are leaving your site instead of exploring.
How many users exit your site after viewing only one page.
Page views per visit refer to the average number of pages a user will view on your site during each visit. Again, more pages usually mean more engagement. However, if it’s taking users too many clicks to find the products they’re looking for, you want to revisit your site design.
Average number of pages a user will view on your site during each visit.
The average amount of time a person spends on your site during a single visit is called the average session duration.
spends time on your site during a single visit
The traffic source KPI tells you where visitors are coming from or how they found your site. This will provide information about which channels are driving the most traffic, such as: organic search, paid ads, or social media.
How they found your site
Monitor the total number of users who use mobile devices to access your store and make sure your site is optimized for mobile.
Who use mobile devices to access your store
Looking at when site visitors come can tell you which are peak traffic times.
When site visitors come can tell you which are peak traffic times
The number of newsletter subscribers refers to how many users have opted into your email marketing list. If you have more subscribers, you can reach more consumers. However, you’ll also want to look at related data, such as the demographics of your newsletter subscribers, to make sure you’re reaching your target audience.
How many users have opted into your email marketing list
Newer to digital marketing than email, ecommerce brands can reach consumers through SMS-based marketing. Texting subscribers refer to the number of customers on your text message contact list. To get started with your own text-based marketing, browse these SMS Shopify apps.
Texting subscribers refer to the number of customers on your text message contact list.
This tells you how quickly your subscriber list is growing. Pairing this KPI with the total number of subscribers will give you good insight into this channel.
Total number of subscribers will give you good insight into this channel.
This KPI tells you the percentage of subscribers that open your email. If you have a low email open rate, you could test new subject lines, or try cleaning your list for inactive or irrelevant subscribers.
Percentage of subscribers that open your email
While the open rate tells you the percentage of subscribers who open the email, the click-through rate tells you the percentage of those who actually clicked on a link after opening. This is arguably more important than the open rate because without clicks, you won’t drive any traffic to your site.
Percentage of subscribers who open the email, the click-through rate tells you the percentage
You can look at both the total number and the rate of unsubscriptions for your email list.
The total number and the rate of unsubscriptions.
You can look at both the total number and the rate of unsubscriptions for your email list.
Total number and the rate of unsubscriptions.
Whether you’re on Facebook, Instagram, Twitter, Pinterest, or Snapchat (or a combination of a few), the number of followers or fans you have is a useful KPI to gauge customer loyalty and brand awareness. Many of those social media networks also have tools that ecommerce businesses can use to learn more about their social followers.
Number of followers or fans you have.
Social media engagement tells you how actively your followers and fans are interacting with your brand on social media.
How actively your followers
The total number of clicks a link gets. You could measure this KPI almost anywhere: on your website, social media, email, display ads, PPC, etc.
Total number of clicks a link gets.
The average click-through rate tells you the percentage of users on a page (or asset) who click on a link.
Rate tells you the percentage of users on a page
The average position KPI tells you about your site’s search engine optimization (SEO) and paid search performance. This demonstrates where you are on search engine results pages. Most online retailers have the goal of being number one for their targeted keywords.
Average position KPI tells you about your site’s search engine optimization.
If you’re running PPC campaigns, this tells you how much traffic you’re successfully driving to your site.
How much traffic you’re successfully driving to your site.
You can find this KPI by simply creating a filtered view in your analytics tool. It’s also helpful to compare blog traffic to overall site traffic.
Compare blog traffic to overall site traffic.
Product reviews are great for a number of reasons: They provide social proof, they can help with SEO, and they give you valuable feedback for your business. The quantity and content of product reviews are important KPIs to track for your ecommerce business.
The quantity and content of product reviews are important.
The CTRs for your banner and display ads will tell you the percentage of viewers who have clicked on the ad. This KPI will give you insight into your copy, imagery, and offer performance.
Percentage of viewers who have clicked on the ad.
If you engage in affiliate marketing, this KPI will help you understand which channels are most successful.
Engage in affiliate marketing, this KPI will help you understand
The CSAT KPI is typically measured by customer responses to a very common survey question: “How satisfied were you with your experience?” This is usually answered with a numbered scale.
Measured by customer responses to a very common survey question.
Your NPS KPI provides insight into your customer relationships and loyalty by telling you how likely customers are to recommend your brand to someone in their network.
How likely customers are to recommend your brand to someone in their network.
Calculate your hit rate by taking the total number of sales of a single product and dividing it by the number of customers who have contacted your customer service team about said product.
Total number of sales of a single product.
This is the number of emails your customer support team receives.
Number of emails your customer support team receives.
Rather than email, this is how frequently your customer support team is reached via phone.
How frequently your customer support team.
If you have live chat on your ecommerce site, you may have a customer service chat count.
Customer service chat count.
First response time is the average amount of time it takes a customer to receive the first response to their query. Aim low!
Average amount of time it takes a customer to receive
This is the amount of time it takes for a customer support issue to be resolved, starting from the point at which the customer reached out about the problem.
Amount of time it takes for a customer support issue.
The total number of active issues tells you how many queries are currently in progress.
How many queries are currently in progress
Backlogs are when issues are getting backed up in your system. This could be caused by a number of factors.
When issues are getting backed up
Beyond the total number of customer support interactions, look at quantitative data around trends to see if you can be proactive and reduce customer support queries. You’ll classify the customer concerns which will help identify trends and your progress in solving issues.
The total number of customer support interactions.
The service escalation rate KPI tells you how many times a customer has asked a customer service representative to redirect them to a supervisor or other senior employee. You want to keep this number low.
How many times a customer has asked a customer service
The cycle time manufacturing KPI tells you how long it takes to manufacture a single product from start to finish. Monitoring this KPI will give you insight into production efficiency.
How long it takes to manufacture a single product
The OEE KPI provides ecommerce businesses with insight into how well manufacturing equipment is performing.
How well manufacturing equipment is performing.
Just as you’ll want insight into your equipment, the OLE KPI will tell you how productive the staffs operating the machines are.
How productive the staffs operating the machines are.
Yield is a straightforward manufacturing KPI. It is the number of products you have manufactured. Consider analyzing the yield variance KPI in manufacturing, too, as that will tell you how much you deviate from your average.
Number of products you have manufactured.
FTY, also referred to as first pass yield, is a quality-based KPI. It tells you how wasteful your production processes are. To calculate FTY, divide the number of successfully manufactured units by the total number of units that started the process.
To calculate FTY, divide the number of successfully manufactured units by the total number of units that started the process.
In manufacturing, there are several sets of regulations, licenses, and policies businesses must comply with. These are typically related to safety, working conditions, and quality. You’ll want to reduce this number to ensure you’re operating within the mandated guidelines.
You’ll want to reduce this number to ensure you’re operating within the mandated guidelines.
The total hours worked tells you how much time a team put into a project. Project managers should also assess the variance in estimated vs. actual hours worked to better predict and resource future projects.
Total hours worked tells you how much time a team put into a project.
The budget indicates how much money you have allocated for the specific project. Project managers and ecommerce business owners will want to make sure that the budget is realistic; if you’re repeatedly over budget, some adjustments to your project planning need to be made.
How much money you have allocated for the specific project.
The ROI KPI for project management tells you how much your efforts earned your business. The higher this number, the better. The ROI accounts for all of your expenses and earnings related to a project.
How much your efforts earned your business.
Just as it’s helpful to compare real vs. predicted timing and hours, you should examine the total cost against the predicted cost. This will help you understand where you need to reel it in and where you may want to invest more.
You should examine the total cost against the predicted cost.
The CPI for project management, like ROI, tells you how much your resource investment is worth. The CPI is calculated by dividing the earned value by the actual costs. If you come in under one, there’s room for improvement.
How much your resource investment is worth.
Take a moment to consider the characteristics of a perfect order. A perfect order consists of on-time delivery, in full delivery, damage-free delivery, and appropriate, accurate documentation. If all components are present, the consumer is less likely to have a problem, and your business continues fulfilling the next order. The perfect order KPI tracks the overall accuracy and timeliness of each shipment.
Perfect Order KPI = On-Time Delivery and Shipment KPI x Complete Order Percentage x Damage-Free Percentage x Accurate Invoicing Percentage.
To calculate the perfect order percentage, one must understand the on-time KPI. Calculate the on-time delivery KPI by dividing the number of orders shipped and delivered by the total number of orders shipped and delivered on-time.
Calculate the on-time delivery KPI by dividing the number of orders shipped and delivered by the total number of orders shipped and delivered on-time.
The order fill rate is another major supply chain KPI, and it includes the following three KPIs to identify failures or successes within order fulfillment:
Calculate the total order fill rate by dividing the total number of orders shipped on the first try by the total orders that should have been able to ship based on inventory on hand
Although the cash-to-cash cycle time KPI appears purely financial, it indicates the efficiency of your operation. Calculate cash-to-cash cycle time by averaging the cycle time, from paying for raw supplies to being paid for the finished product by consumers, of all orders together. As the KPI decreases, efficiency increases, freeing up capital for other uses.
Calculate cash-to-cash cycle time by averaging the cycle time, from paying for raw supplies to being paid for the finished product by consumers, of all orders together.
Knowing your space utilization is also key to effective supply chain management, making this KPI even more important. Calculate your storage space utilization and by dividing the total storage area used by the total storage area of the facility available. As with the previous KPIs, multiply the end result by 100 to obtain a percentage.
Calculate your storage space utilization and by dividing the total storage area used by the total storage area of the facility available.
The warehousing and transportation costs per item should also be tracked. The calculation is comparable to the previous calculations, dividing the total warehousing and transportation costs by number of shipped items over a given period of time. The duration can vary widely to give warehouse managers an opportunity to compare average costs against past time periods.
The calculation is comparable to the previous calculations, dividing the total warehousing and transportation costs by number of shipped items over a given period of time.
This is one of the two enterprise-level KPI’s (the other being Customer Service) that helps determine overall profitability for a company. Factored into this high level metric are operating costs, demand variability, supply variability, and inventory. One of the ways to support total delivered cost measurements are with a complementary metric on total cycle time, which measures the total amount of time it takes for a product to pass through the supply chain.
Overall profitability for a company.
This KPI is also monitored at the enterprise level and is comprised of demand variability, supply variability, and performance to plan. The favoured approach to measuring customer service in its broadest sense is with metrics for on-time full deliveries or line item fill rate, which are the most meaningful aspects of customer service. The overall goal of the two enterprise-level KPI’s is to manage total delivered cost and customer service against the strategic goals of the company.
Measuring customer service in its broadest sense is with metrics for on-time full deliveries or line item fill rate, which are the most meaningful aspects of customer service.
Supply variability KPI’s measure the status of Inventory against conformance to lead times and promise dates. Included are metrics for performance to the production plan, schedule attainment, asset utilisation, capacity utilisation, vendor deliveries, and item availability at all stocking locations (including the customer’s location).
Measure the status of Inventory against conformance to lead times and promise dates
Demand variability is comprised of measurements for inventory, lead times, and adherence to process capability, improvement to process capability, conformance to plan, actual demand versus forecast demand, forecast accuracy, and forecast error.
Overall performance of lead generation and process capability
All departmental costs are rolled up in this metric, including distribution costs, procurement costs, warehousing costs, transportation costs, and manufacturing costs. From these, it is possible to calculate cost of goods sold, cost per unit, or cost per kilogram, which are all useful KPI’s relative to total cost.
Average Operational Cost in a certain period.
Within Performance-to-Plan are measurements for how well the company has adhered to the procurement schedule, the distribution schedule, the warehousing schedule, the transportation schedule, and the manufacturing schedule.
How well the company has adhered overall activity.
Metrics which support the Inventory KPI are in the areas of total inventory, inventory turns, record accuracy, obsolete inventory, working inventory, non-working inventory (along with working inventory, this measures the quality of your inventory), and item availability.
Areas of total inventory.
Inventory should be consistently measured in several areas: turnover, carrying cost, and accuracy. Products that tend to stick around the warehouse longer than others are likely costing you more money than they are making you. If you have an accurate measurement of product turnover and how long items are being carried, then you can reevaluate your stocktaking and maintain a more efficient warehouse. The idea is to evaluate your customers’ preferences and habits, and stock accordingly.
Measured in several areas: turnover, carrying cost, and accuracy
This is an area that is often considered in hindsight, or at least second to higher profile areas such as the warehouse picking and shipping areas. However, receiving area inefficiencies can be felt all the way through the supply chain. It is an absolutely vital area of a warehouse and important measurements include cost per line item received, volume per man-hour, truck time at the dock, and accurate receipts.
Measurements include cost per line item received, volume per man-hour, truck time at the dock, and accurate receipts.
Not the easiest area to measure, but it is possible. Put-away KPIs include cycle time or accuracy rate, cost per item put away, time from receiving to pick location, and put-away hourly labor rates.
KPIs include cycle time or accuracy rate.
Not surprisingly, the emphasis of accurately measuring order picking and packing KPIs is of utmost importance to most businesses. This is the most labor-intense and diverse area in the warehouse, and the one where performance directly relating to customer satisfaction can be evaluated. This is also the area which costs businesses the most, and inefficiencies cause a direct loss in profit. Important measurements include cost per line item picked, orders picked per hour, picking labor costs, consumable usage (such as packing materials and boxes), and cycle times per order. Also good to add is the percentage of perfect pick lines, with the aim of constantly increasing it. This area directly impacts the customer, as inaccurate picking and packing lead to errors in shipping and delivery, which should of course be avoided as much as possible.
Measuring order picking and packing KPIs is of utmost importance to most businesses
Storage facilities may be operated via manual or automated systems, and both can be measured accurately via your WMS. Whether your system measures by block stacking or rack storage, or by unit, mini load, or carousel storage, good measurement indicators include storage cost per item, inventory storage per square foot, and days-on-hand.
Storage facilities may be operated via manual or automated systems, and both can be measured accurately via your WMS.
The word “shipping” doesn’t convey all of the importance that it should, as this area comprises a lot more than just packing trucks and sending them off to customers or other areas of the chain. Excellent shipping metrics include cost per item shipped, cost per shipped order, labor hours consumed per order, percentage of perfect shipments, shipping dock utilization, and time from picked order to departure.
Measure include areas such as security, safety, employee satisfaction, carrier performance, and DOE fuel index.
A warehouse operation all starts with actually receiving and booking in incoming stock.
It’s a good idea to record exact timestamps of all delivered stock. Then record another timestamp as soon as this stock is ready for putting away. You can then calculate an average for the month and compare to previous performance.
Another vital warehouse KPI is picking accuracy.
Picking Accuracy =( ( ( Total No Of Orders – Incorrect Item Return ) / Total No Of Orders))*100
The longer inventory stays in the warehouse, the more it costs a business. But it’s essential to be able to put a quantifiable number in place here as one of your warehouse management KPIs.
Percentage of the direct cost of the inventory items in that same period.
Inventory turnover is another vital warehouse management KPI and ties in quite closely with carrying cost of inventory.
Metric enables greater insight into the popularity of certain items to gauge future buying practices
Rate of return is a simple yet vital warehouse management KPI. As the term suggests, it determines how often items are being returned by customers.
Rate of return= (No of units Returned/No of unit sold)
Backorder rate is one of the warehouse management KPIs that allows deep analysis of forecasting success.
Backorder rate = Orders Unfulfilled At Time of Purchase/Total Orders
Order lead time is a warehouse management KPI that feeds into backorder rate. This is simply the average length of time it takes for customers to receive orders once they are placed.
Average length of time it takes for customers to receive orders once they are placed.
Although for the most part conversion tends to mean completed sales, particularly in regard to ecommerce, conversion can actually mean any action completed thanks to the email activity. For instance a newsletter subscription, a mobile app download, a whitepaper download, a survey filled in.
Conversion tends to mean completed sales
This is the amount of recipients who opened your email. The KPI itself doesn’t go deeper than that, it possibly just suggests that your subject line worked. It doesn’t mean that your email didn’t immediately go in the bin or marked as spam. Some email clients such as Hotmail automatically opens email as you scroll down your inbox, so again it’s not terribly reliable.
This is the amount of recipients who opened your email
Divide the amount of clicks on links within your emails with the number of emails delivered, then times by 100 and you have a click-through rate percentage. If it’s high than it means your content is working and you have strong calls-to-action.
Clicks on links within your emails with the number of emails delivered
The amount of recipients who have had enough of your emails and have hit ‘unsubscribe’. It’s important to manage email unsubscribes properly. The unsubscribe button needs to be clearly positioned and should be ‘one-click’. Making it easy for users to unsubscribe is far better than the other alternative.
The amount of recipients who have had enough of your emails and have hit ‘unsubscribe’.
The amount of recipients who just hit the big spam button. Obviously you want this to be low. Unfortunately your emails don’t even need to be that ‘spammy’ for users to click the spam button, its often just used as a short cut to unsubscribe. The key is to make your subject lines as compelling as possible and not to bombard your recipients.
The amount of recipients who just hit the big spam button.
The percentage of undeliverable mail. This can be split into two categories: Hard and Soft.
The percentage of undeliverable mail
Simply the amount of emails sent vs. the amount of emails delivered. This reveals much about the quality of your email address list and the effectiveness of how you’re accrued these email addresses in the first place.
Simply the amount of emails sent vs. the amount of emails delivered
As emails are frequently opened on mobile devices while on the go, it’s possible that recipients open your message read it, then visit your site later on another device or desktop. Look for general increases in traffic in the time after you’ve sent an email. It’s not a precise measurement, but can be an indication of general behavior.
Look for general increases in traffic in the time after you’ve sent an email.
Precisely how much time a recipient then spends on your site after clicking-through on your email?
How much time a recipient then spends on your site
How much time has passed between a recipient beginning to receive your emails and an eventual purchase? This could theoretically be any amount between a few hours to a whole year.
How much time has passed between a recipient beginning to receive your emails.
If you stick to the same email list, then it will eventually shrink as customers naturally move away from your messaging and products. It’s important to continuously grow the amount of subscribers you have. This can be done through various incentives, contests, cross-promotions and simple newsletter sign-up widgets on your site.
It’s important to continuously grow the amount of subscribers.
Don’t just measure the items successfully purchased that were featured in the email, include all of the items that a customer proceeded to buy while on site. Similarly, if the items in the marketing email weren’t purchased but others were after clicking through, include these in your measurement.
Measure the items successfully purchased that were featured in the email.
How much is an email marketing campaign saving your company compared to other campaigns on different channels?
Saving money between campaigns on different channels
How much is it costing you on average to acquire each new customer or conversion?
How much cost per lead
Perhaps you’re using email marketing to beef up the numbers of one of your social channels. Follower growth on any channel can be measured accurately.
Follower growth on any channel can be measured accurately
Emails are a fantastic way to keep your brand in a customer’s mind even when they haven’t purchased anything from you from a while. Even thought they may be emotionally unsubscribed, because they haven’t actually clicked unsubscribe means they may still buy something from you in the future. Unfortunately this is difficult to measure and is more of a beneficial soft metric of email marketing.
Unfortunately this is difficult to measure and is more of a beneficial soft metric of email marketing.
Look at how much an email campaign sold in total, before you start to dive down into the nitty gritty of average rates — since almost every email measurements will be a rate of some sort. Remember that email marketing can be a branding tool.
How much an email campaign sold in total.
This metric tracks the percentage of a given email message’s recipients who open the email, click on a link in the email, and complete a desired action like making a purchase, registering for an online class, or downloading a white paper.
Can track email opens and clicks.
If conversation rate is the king of email marketing KPIs, click rate or open-to-click rate is the queen. This KPI measures the percentage of recipients who open an email and click some link in the email. It does not consider whether the individual recipient completed the desired action and converted.
The percentage of recipients who open an email and click some link in the email.
This KPI can help to identify effective subject lines and topics. It is important to remember, however, that some email clients open messages by default, so consider looking at unique opens, which may provide a better indicator.
The number of unique opens is divided by the number of delivered messages.
MailChimp has written that unsubscribe rates per campaign should be no more than about one percent for a well-maintained and properly used email subscriber list. If your email campaigns are generating unsubscribe rates of more than one percent, consider cleaning up your list, analyzing how emails are collected, or reviewing email message content.
Divide the number of recipients that unsubscribed by the total delivered emails and multiply by 100.
Bounces are undelivered emails. Often bounces will be divided into “soft” bounces, which are valid email addresses that for some reason could not receive a message this time. “Hard” bounces are non-existent email address. Good email service providers will remove hard bounces from your list automatically.
Monitoring the number of bounces a particular email message receives is a good measure of list quality and maintenance.
There are strong indications that some email users, particular those reading messages on mobile devices, may read a message and later respond to that message from a different device.
Look for overall changes in site traffic in the hours after an email message has been sent
As your clientele expands, the number of performance reports you have to create also increases. Consequently, your headache can soar too! So here are a few universal KPIs to make your life simpler. These KPIs can easily be measured using Google Analytics Dashboard for the website, Google Search Console, Moz OSE and Alexa Ranking tool.
Ranking changes for the marketable keywords (Keywords that aid in conversion)
Increase in brand search traffic
Number of Page Views
Number of Page Views
Average number of pages per session
Average number of pages per session
Average session duration
Average session duration
Leads and conversions on a website can be tracked by adding the relevant landing page for “Goal Tracking” on Google Analytics.
Leads and conversions on a website can be tracked
For an E-commerce Website: If you add the shopping cart page under “Goals” in Google Analytics, you can track the number of times an item was added to the shopping cart. If the item proceeded to the “Payment” page, it is a conversion. If the item was added to the shopping cart but no further action was taken, it was just a lead but not a conversion. Herein, you can suggest factors for converting those leads into customers.
Leads and conversions on a website can be tracked by adding the relevant landing page for “Goal Tracking” on Google Analytics.
SEO improves visibility through organic results and helps website owners develop better navigation structure as well as contents that are aligned with what users are searching for and which search engines can quantify as being valuable and thereby assign a higher rank. It involves wide-ranging activities for SEO to deliver results and this is also a time-consuming process that involves SEO KPIs in order to understand progress and fine-tune strategies as the campaign progresses. There are several SEO performance metrics.
Click through rate (CTR).
Of all the SEO KPIs, lead generation is what matters the most to website business owners because this is after all that they expect. Websites may use various methods one of which is a landing page with a form that visitors are required to fill in and provide information that can be used to push products.
percentage of increases in leads you get over a period of several months after the campaign is introduced and SEO experts https://www.motocms.com/blog/en/seo-kpis-key-performance-indicators/
Leads and sales derived from SEO depend on organic traffic that the SEO activities drive. A client may not have the time to use Google analytics but SEO agencies measure SEO performance as part of SEO KPIs week over week and month over month to observe the effect their campaign has on the natural traffic that is funneled through searches.
KPIs week over week and month over month to observe the effect
Page load time is important for KPI SEO activity. Majority of users now use mobile devices to access websites and if it takes too long for a page to load (beyond 10 seconds average) they are likely to leave and never return.
Average page Load Time
A website owner may have his own way of describing his product or service but what matters more is which specific terms people who are interested in that product use when they search the web. Keywords are an important pillar of the SEO KPIs process, which is why SEO experts carry out intensive keyword research in order to know the keywords that can generate more organic traffic. There are other benefits for website owners since they can get to know universally used keywords that could become part of the branding process.
Intensive keyword research in order to know the keywords that can generate more organic traffic.
Backlinks could well be the backbone of SEO activities and SEO KPIs and SEO tracking involves finding out the number of backlinks and from which domain these backlinks are generated. The quantity of backlinks is important as one of the key SEO performance metrics but of even more importance is the site from where they originate. What this means for website owners in simplistic terms is that there are authoritative sites where your content is posted with a link and which people are most likely to visit and read.
The quantity of backlinks is important as one of the key SEO performance metrics
Bounce rate is another of the important key SEO KPIs that tell SEO experts and website owners as to how many people visited the site and then left without interaction.
SEO performance metrics relating to user engagement
Every conversion starts with a click. That’s why clicks are an early indicator of PPC campaign success.
How many people clicked on your ad.
Similar to measuring how many clicks your campaign generated, CTR is a key metric for campaign performance.
How many clicks your campaign generated, CTR is a key metric for campaign performance
Quality score is the most elusive KPI amongst PPC advertisers. It is a metric created by Google that tells them how relevant your ad content is, using metrics like CTR and other performance variables like landing page experience. Advertisers find it difficult to understand quality score because it’s less straightforward than other easily measured KPIs, like clicks.
It is a metric created by Google that tells them how relevant your ad content is
PPC advertisers know how much they can pay for an ad campaign because they typically have a predetermined budget. However, while they specify a budget and a bid when doing the setup of a PPC campaign, it doesn’t mean that this is what they will pay.
How much they can pay for an ad campaign
Similar to CPC, you can set a cost per acquisition (CPA) when you set up your advertising campaigns.
Google defines the average CPA as the price advertisers pay for every new customer they acquire, which is calculated by dividing the total cost of conversions by the number of conversions.
Conversion rate is not only an indicator of campaign success, it is the reason PPC marketers are hired in the first place.
Dividing the number of conversions the campaign received by the total clicks.
An impression occurs when a person sees your ad. It doesn’t matter whether they click on it.
Dividing the total impressions your campaign received by the total number of impressions your campaign was eligible for.
Google balances both paid and organic search results for almost every search query entered.
Rank is calculated by multiplying quality score by an advertiser’s max cost per impression (CPM)
Paid search marketers are almost always given a monthly budget to run ad campaigns with. Budget attainment measures how closely that agency or individual came to achieving the budget they set out to.
Budget attainment measures how closely that agency or individual came to achieving the budget they set out to
LTV is a broad indicator of account health and of a PPC marketer’s abilities.
Calculating customer lifetime value for paid search is complex.
If brand awareness is the main objective of your PPC campaign, clicks and impressions are two metrics that should be on the top of your list. For most ecommerce stores, though, clicks are just the beginning of the story – a story that hopefully ends with a sale. The number of clicks you get will depend on how much money you’re spending, of course, but what you really need to monitor are any trends or variations in clicks.
Clicks and impressions are two metrics that should be on the top of your list.
The average amount you pay for each click is referred to as Cost per Click (CPC), and it’s another useful indicator of your PPC success. CPCs vary by industry, but just like clicks, you’ll want to keep a close eye on trends. Over the last five years, CPCs have increased across the board, but some industries have risen faster than others.
Look at when determining your optimum budget if you have a specific conversion goal in mind.
Click-Through Rate (CTR) is a measure of how often your ads are shown versus how often your ads are clicked on (i.e. clicks/impressions). So, for example, if your ads were shown 1,000 times and clicked on 50 times, your CTR would be 5%.
How often your ads are shown versus how often your ads are clicked on.
Quality score is a number that Google assigns to keywords based broadly on the following attributes:
Impression share measures the percentage of all potential impressions that your ads are getting. For example, if 1,000 searches were done in a day for a keyword of yours, and your ads were shown 800 times for that keyword, you would have an 80% impression share. Subsequently, you would have a 20% lost impression share.
Percentage of all potential impressions that your ads are getting.
Conversions are what most advertisers are after, whether they’re in the form of leads or sales. Keep in mind that there’s no solid benchmark for conversion rates across industries; they can vary greatly from advertiser to advertiser. When it comes to conversions and conversion rates, much like the other metrics, trends are the star of the show. Though, keep in mind that a change in conversion rate can be as simple as seasonality or as complex as a changing business landscape within your industry.
Can track email opens and clicks.
Cost per Conversion is the actual cost paid to get a sale or a lead. Let’s say that you spent $80 on clicks and got two sales – your resulting Cost per Conversion would be $40. This would be a high Cost per Conversion if you’re selling t-shirts (where the average order might be $20), but a low Cost per Conversion if you’re selling warehouse shelving (where the average order might be $2,000).
Actual cost paid to get a sale or a lead.
Total conversion value is another important metric to compare between campaigns, ad groups and even individual keywords. Some business owners find that shoppers who are looking for particular products tend to spend more.
Compare between campaigns, ad groups and even individual keywords.
Return on Ad Spend, or ROAS, is also known colloquially as Return on Investment, or ROI. Although this isn’t technically correct, since true ROI would take into account all of the expenses that you have regarding your PPC (the cost of clicks, fees for management by a third party or agency, fees for the design of display ads, etc.), the idea is the same nonetheless.
Calculate it by dividing the profit from an ad campaign by the cost of that ad campaign.
Many marketers dismiss this as purely a vanity metric. How many followers you have isn’t as important as how engaged your followers are.
How many followers you have isn’t as important as how engaged your followers are.
Another way to approach the follower count is to look at growth. This shows you whether you’re trending up (and fast), or if sadly, your followers are leaving you.
Approach the follower count is to look at growth
As Valerie explained, mentions are a useful way to measure brand awareness and find out who’s really talking about you online.
measure brand awareness and find out who’s really talking about you online
Sentiment analysis is a useful tool to quickly understand what people think about your brand online. Each tweet, Facebook post, or forum mention is assigned a positive, negative, or neutral sentiment:
Each tweet, Facebook post, or forum mention is assigned a positive, negative, or neutral sentiment
We talk about influencer marketing a lot at Mention. We know that influencers can help you grow your audience quickly, and they usually come a lot cheaper than advertising. Often, they’re free!
Talked about by important people on social media
This next metric is a little more complex, but that’s not a reason to shy away. We want to prove that social media marketing leads to engagement. But we’re not talking here about likes and retweets – we’re talking about engagement on your website, which is very valuable.
Prove that social media marketing leads to engagement.
Similar to our last metric, if your chief goal for social media is to drive website traffic, you need to know which platforms perform best. So find out which social networks bring the most visitors.
Prove that social media marketing leads to engagement.
If the last two metrics were hits, this one is a home run. If you can prove that social media marketing leads directly to conversions (especially sales), you have a demonstrable return on investment.
The best way to actually sell your social media efforts to the rest of your team
This metric pulls all social media conversions together, rather than separating them by channel. Your marketing team likely has monthly or quarterly targets, and you need to know how social media contributes to these.
Total conversions are again a great way to prove the value of social media marketing. If you can show that social media is a consistent source of website conversions, you’ll know that what you’re doing works.
Without a doubt, this is the metric that makes company executives take notice. Sure, they probably care about site traffic, social followers, and some of the others. But what matters most is the bottom line.
This is dead simple for ecommerce sites. You have a product with a set value, so every time a user buys that product, you know how much revenue it brings in.
The first – and easiest – social media metric to measure is volume. What is the size of the conversation about your brand or your campaign? Volume is a great initial indicator of interest. People tend to talk about things they either love or hate, but they rarely talk about things they simply don’t care about at all.
While volume can seem like a simple counting metric, there’s more to it than just counting tweets and wall posts.
Reach measures the spread of a social media conversation. On its own, reach can help you understand the context for your content. How far is your content disseminating and how big is the audience for your message? Reach is a measure of potential audience size.
How far is your content disseminating and how big is the audience for your message?
Speaking of engagement metrics, this is one of the most important areas to measure in social media. How are people participating in the conversation about your brand? What are they doing to spread your content and engage with the topic?
Content can be both shared and replied to. Twitter retweets (RTs) and Facebook shares and posts are helpful to know who is spreading your content, while comments, replies and likes are helpful to see who is replying to your content.
Who is talking about your brand and what kind of impact do they have? Influence is probably the most controversial social media metric; there are myriad tools that measure social influence, and they all do it in different ways. But one thing they all agree on is that audience size does not necessarily relate to influence. Just because someone has a lot of friends or followers, that does not mean they can encourage those followers to actually do anything.
Measure online social capital and the ability to influence others.
Finally, to really understand how well you’re doing on social media, you should consider a share of voice metric. How does the conversation about your brand compare to conversations about your competitors? Determine what percentage of the overall conversation about your industry is focused on your brand compared to your main competitors. And learn from your competitors’ successes; since so many of these social media conversations are public, you can measure your competitors’ impact just as easily as you can measure your own.
measure your competitors’ impact just as easily as you can measure your own
Have you mapped out the journey of a prospect, after someone views your Facebook ad?
If you’ve got an advertising budget of a few dollars per day, then this metric won’t be of much interest to you.
If you’ve got an advertising budget of a few dollars per day, then this metric won’t be of much interest to you.
It’s common wisdom that you need to build targeted, high-quality traffic to your website.
measure the success of your ad campaigns
CPC tells you the cost of an average click from your ad to your website. And, the CTR is the percentage of people that have clicked on your website, after seeing your ad.
Percentage of people that have clicked on your website, after seeing your ad.
Simply put, an action is a desirable behavior that you expect from your prospect.
I would recommend that you measure the CPA, alongside your ad set spend, frequency and other metrics, for better context.
It is the number of times your ad is displayed. The number by itself does not hold much value but it is a metric used to calculate other metrics and KPIs. Keep in mind that an impression does not mean that someone actually saw the ad, it just that the ad was shown on a web page/app.
Number of times your ad is displayed
This is the number of unique people (generally identified by cookies) that were reached by your ad. This number is always lower than the impressions because your ad is generally shown to same person (cookie) multiple times.
Number of unique people that were reached by your ad.
The total cost of running the ad campaigns. This is calculated differently by different tools and organizations. Some use actual media cost while other use a fully load number that includes the agency cost, creative cost etc. Whichever number you use, be consistent in your approach. If you are going to do comparisons with CPC models such as Paid Search then I suggest using the actual media cost. Most of the publicly available benchmarks are based on actual media cost and are expressed in CPM.
Total cost of running the ad campaigns
This applies to the Rich Media Ads, where a user can interact with the ad without leaving the Ad unit/widget. Engagement Rate is the percentage of interactions per impression of the ad unit and is calculated as (Number of Interactions/Total Impressions)*100%.
Engagement Rate is the percentage of interactions per impression of the ad unit
CPM – This is the cost for 1000 Impressions of the ad unit. Display advertising is generally sold on CPM basis. (For more information on CPM, see Cost of Advertising: CPM, CPC and eCPM Demystified)
This is the cost for 1000 Impressions
Number of clicks on an ad unit that lead to a person leaving the ad unit. Keep in mind that a click does not mean that a person landed on the intended destination of the banner ad click. There are multiple factors that could lead to a click but not a visit to the destination (I won’t cover those here but am happy to discuss over email or a call).
Number of clicks on an ad unit that lead to a person leaving the ad unit.
It is the number of Clicks generated per impression of a banner ad. This number is expressed as a percentage. CTR = (click/impressions)*100%
Clicks generated per impression of a banner ad.
Cost per Clicks is the cost that you pay for each click. Generally, display advertising is sold by CMP (see above), you can easily convert the cost in to Cost Per Click to compare it against other channels such as paid search. Cost per click is the effective amount you paid to get a click. It is calculated by dividing the cost with number of clicks. CPC = Cost/Clicks. Sometime this number is also referred as eCPC (effective Cost per Click).
convert the cost in to Cost Per Click
As stated above in the definition of clicks, not every click turns into a person landing on your destination (generally your website). Visits measures the clicks that did end up on your site. (For more definition of visits, please see Page Views, Visitors, Visits and Hits Demystified)
Visits measures the clicks that did end up on your site.
Visitor’s metric goes one step ahead of the visits and calculates the number of people (as identified by cookies) who ended up on your site as a results of the clicks on the banner ads.
Visitors metric goes one step ahead of the visits and calculates
Is the percentage of visits that left without taking any actions on your site? It is calculated as Number of Visits with one page view /Total number of visits resulting from the display ads. (Bounce Rate Demystified for further explanation).
Percentage of visits that left without taking any actions on your site.
Generally this is opposite of bounce rate (though you can have your own definitions of engagement). It measure the quality of the visits arriving from your display advertising. You can calculate Engaged Visits as (100 – Bounce Rate expressed as percentage)
It measure the quality of the visits arriving from your display advertising.
This is effective cost of each engaged visits. It is calculated as total Cost divided by number of engaged visits.
Effective cost of each engaged visits.
Page views the number of pages on your site viewed by each visit. With a lot interactions happening on one single page, this metrics is losing its value. However, for now, it is still a valuable metric for ad supported sites.
Number of pages on your site viewed by each visit.
Conversion is defined as the count of action that you want the visitors to take when they arrive from you display ads. Some examples of conversions are – purchase, signup for newsletter, download a whitepaper, sign up for an event, Lead from completions etc.
Conversion is defined as the count of action.
This is the percentage of visits that resulted in the desired conversion actions. Conversion Rate = Total conversions/visits*100. If you have more than one conversion actions then you should do this calculation for each one of the action as well for all the actions combined. In case of Leads, you can take it one step further and calculate not only the “Leads Generation Rate” (Online Conversion Rate) but also Lead Conversion Rate, which is, Leads that convert to a customer divided by total leads generated.
Percentage of visits that resulted in the desired conversion actions.
This is the Total Cost divided by the number of conversions achieved from visits coming via display ads.
Total Cost divided by the number of conversions
This is total revenue that is directly attributed to the visits coming from display advertising. It is pretty straightforward to calculate in eCommerce but gets a little tricky when you have offline conversions.
Total revenue that is directly attributed to the visits coming from display advertising.
Shows the direct revenue achieved per visit originating from the display advertising. It is calculated as Revenue Generated from Display Ads divided by the total Visits.
The direct revenue achieved per visit originating from the display advertising.
This is useful for ad supported business models. This is sometimes expressed as RPM (Revenue per thousand impressions of ads) = (Total Ad Revenue/Number of page views) * 1000
RPM (Revenue per thousand impressions of ads) = (Total Ad Revenue/Number of page views) * 1000
Shows the percentage of all impressions that were considered viewable. VR allows fast comparison of viewable impressions.
The percentage of all impressions that were considered viewable.
Shows the minimum and maximum time that an ad has been in view for 50% of all impressions. The MVT metric helps to understand how long ads are in-view. We usually recommend to also look at the 5, 25, 75 and 95 percentiles to gain a deeper understanding of in-view time.
Minimum and maximum time that an ad has been in view for 50% of all impressions.
Sets an ad’s cost in relation to the in-view time.
Sets the cost in relation to viewable impressions: It allows the comparison of the ad’s spend per viewable impression.
the cost in relation to viewable impressions
Is the click through rate based on viewable impressions? vCTR is very useful when optimizing for clicks across different ad positions.
click through rate based on viewable impressions
Is the engagement rate based on viewable impressions?
Click traffic is the number of clicks your program received over a given period of time. Looking at your traffic is an important KPI to start with because this is the main indicator of whether or not your program is growing. For example, if you received less click traffic this year than last year, it is likely your program is shrinking and will see less sales. On the other hand, if you are seeing more traffic this year, your program is likely growing, adding new and productive partnerships and thus more sales.
Clicks your program received over a given period of time.
Gross orders are the number of sales your program has generated in total. Net orders are the number of gross orders minus any orders that were voided out due to things such as a customer returning the product they purchased, fraud from scammers or an order being cancelled for other reasons.
Looking at gross orders vs net orders.
Commission are what you pay to your affiliate partners for the successful conversions they refer when promoting your business. This metric is a key indicator to look at because it is essential to maintain profitability from your affiliate program. If you aren’t generating a comfortable profit margin from your business, then why have an affiliate program in the first place? From the other perspective, ensuring your affiliate partners are earning a good commission rate from your program is important to ensuring your business stays top-of-mind with your affiliate partners as their incomes depend upon your commission payments.
Essential to maintain profitability from your affiliate program
Your top 10 affiliate partners are likely driving a significant portion of your entire program’s revenue every year. Keeping a pulse on what each partner is doing in your program as well as maintaining a good relationship with the movers and shakers is key to growing your affiliate program YOY.
Maintaining a good relationship with the movers and shakers.
This KPI can tell you what types of customers your affiliates are driving to your website.
If you value those affiliates who are able to convince your prospects to become customers, then coupon and loyalty affiliates might be your biggest priority. If you value more brand awareness and new top-of-the-funnel customers, then content sites are lik
Conversion rate is defined as the number of conversions (usually sales) divided by clicks. This tells you how many clicks you typically receive for each conversion. Looking at the spikes and depressions over the year will tell you a lot of good information. A spike in the conversion rate can tell you if a promotion run during that time-frame resonated well with your customers. If you recently completed a re-design of your website and your conversion rate sank after the new design was launched, that can indicate your new design is turning your customers off. Looking at the ups and downs in the conversion rate and tying those anomalies back to changes, events and promotions gives you a great wealth of information.
Conversion rate is defined as the number of conversions (usually sales) divided by clicks
The number of affiliates you have approved into your program is a good metric to know as the more partners you have in your program the more affiliates are promoting your brand.
The number of affiliates you have approved into your program
This KPI offers another way to see if your program is healthy or not. If your click-active ratio is around 50% and your sale-active ratio is around 5% to 10%, then you probably have a very healthy program. Conversely, if your click-active ratio is in the single digits or if you don’t actually have any sale-active affiliates, something is wrong. Activation campaigns are a great way to incentivize those inactive partners to become active and start promoting your business.
If your click-active ratio is around 50% and your sale-active ratio is around 5% to 10%, then you probably have a very healthy program.
An affiliate program that has tons of sale-active partners should have a healthy distribution of affiliate sales. This means that the majority of your sales don’t come from one or a few top partners. If your top partner is responsible for more than 50% of your total program’s sales, your program is very top-heavy. If that top partner drops out or decides to stop promoting your business for whatever reason, your bottom line would likely take a hit. If your program is top-heavy, it’s highly recommended that you recruit additional partners into your program.
If your top partner is responsible for more than 50% of your total program’s sales, your program is very top-heavy.
Big data has changed the face of affiliate marketing. Marketing managers are now able to track the customer journey better than ever before, following every conversion and determining which partners are responsible for every sale generated. It’s easier than ever to evaluate each partner and channel for profitability and growth.
New and existing publishers and customers engaged
There are two general references to AOV or AOS. These are the overall Average Order Value of all purchases made on a website. If you look at your Google Analytics, for example, and go to your Conversions > Ecommerce > Overview section, this is the one called “Average Value”.
Overall Average Order Value of all purchases made on a website.
This is a term commonly used with search affiliates or internal search departments (mainly your PPC channel). The reason it’s important is search affiliates will speak with you about how well their campaigns may be converting and discuss keywords with you which will produce a higher Return on Advertising Spend.
How well their campaigns may be converting and discuss keywords with you which will produce a higher Return on Advertising Spend.
This one may be a bit simple to define here, but possibly THE most important abbreviation on this entire blog. Return on Investment tells you whether you are producing a positive return, a negative return or breaking even on your spend. I won’t go into detail about this one since it’s the basis of all business efforts – a positive ROI.
Basis of all business efforts
Earning Per Click is a way for affiliates to understand what their earning potential will be if they join your program. EPC represents the average earnings of all affiliates in your program based on the number of sales (conversions) and clicks they send. To an affiliate it means “If I send 100 clicks your way, how much am I going to earn back?” If you have a $20 EPC, it means they will earn $20 from those 100 clicks. If you have a $0 EPC it means none of your affiliates are selling anything, which is not an encouraging figure for an affiliate to look at when considering joining your program. They would be taking a very big risk.
The number of sales and clicks they send
This is a term used when a sale or affiliate commission is reversed from previously affiliate credited transitions. For example, if you have a 10% reversal rate, this means that 10 of 100 orders previously credited to affiliates were “cancelled”. It’s normal for businesses to have some small reversal rate since there are sometimes cancellations or returns by consumers, however, very high reversal rates (say 30-50%) are a big red flag for affiliates and they will be very wary to join your program – if they ever do.
Affiliate commission is reversed from previously affiliate credited transitions.
Aside from ROI, this is likely the other most important metric used online. Conversion rate measures how successful you are capturing the sale or lead. If you have a 2% conversion rate, that means 2 out of every 100 people coming to your website are completing a sale or lead generation form. (Note – there are other actions one can take to “convert” however these are the most common two).
Conversion rate measures how successful you are capturing the sale or lead.
This is a term used to describe when a user clicks on an ad or link (whether it be a banner, text link, product image, widget, etc ) and leaves the page to land on another page. They are “clicking through” from one place to another using one of your ads or creatives.
user clicks on an ad or link and leaves the page to land on another page
This is simply a term used to explain how many times your links are showing. For example, if in your affiliate program you have 100,000 impressions, it means the combination of all your creatives (banners, text links, product images, etc) that have an affiliate tracking link attached to them have been “seen” that many times across all your affiliate’s touch points.
How many times your links are showing
Attribution is a term used to describe which chain of affiliates or marketing channels were used to complete a transaction. With attribution tracking you can better understand the values different touch points bring to your sales cycle. You can read more about attribution here.
Which chain of affiliates or marketing channels were used to complete a transaction
Revenue per visitor (RPV) is simply the average amount of money you made per visitor.
Average revenue per visit.
If you can’t measure money (e.g. it’s a lead generation website, nothing is sold), conversion rate is the next best thing.
Gaining customers requires a certain financial investment. Your budgetary number for how much you spend to acquire a customer is known as the “customer acquisition cost” (CAC). The initial cost per customer should be less than the profit made once they’re converted (or be lower than LTV if you know it).
Processes so you minimize your expenditures and time, thereby maximizing your profits.
One could make the argument that the most important KPI should be LTV, which is “a prediction of the net profit attributed to the entire future relationship with a customer.” Essentially it’s how much money you make off of a customer over their lifetime as your customer.
Essentially it’s how much money you make off of a customer over their lifetime as your customer.
A popular misconception about time on page statistics involves how they’re calculated. Google Analytics isn’t able to measure the amount of time you’ve spent on your last page, because the timestamp used to calculate the numbers depends on when you click through to the next page. If someone leaves for five minutes to take a call before closing the window, those minutes aren’t counted. On the other hand, you won’t be able to tell if someone spent that time consuming the content.
Time on page is one of the most valuable CRO metrics when attempting to measure the stickiness of your website.
Discovering the number of people who abandon your site without surfing to another page helps to determine how individual pages perform in terms of capturing the attention of visitors. Bounce rates within the ecommerce industry vary across sectors, typically hovering around 60%. Depending on the sector, top ecommerce websites tend to have a bounce rate of 36% or less.
Discovering the number of people who abandon your site without surfing to another page helps to determine how individual pages perform
The shopping cart is one of the last webpages the customer browses before checking out their purchase, which means that you’ve lead your visitor deep into the digital sales process. Losing the sale at this point is a frustratingly common occurrence, leaving trillions of dollars of merchandise waiting in the cart every year.
Your email opt-in rate is a simple, yet important, CRO metric which reveals how effectively your site builds email leads for your campaign. For most industries, the average opt-in rate hovers around 1-5%, which means that between one and five unique visitors out of a hundred convert into email leads. This reflects the difficulty of building enough trust and desire to acquire an email address.
How effectively your site builds email leads
It defines the value a visitor brings. So if AOV is $50 and you have 100 visitors and 10 customers, the value per visitor is $5. Why am I look at Revenue Per Visitor and not Average Order Value? Because the latter doesn’t tell me anything about scalability and how I’m aiding the overall conversion. If I can turn 10 customers into 20 customers whilst still retaining the 100 visitors, my job worked. It also doesn’t inform my marketing. I can drive a ton of traffic to any given website, but if I send you 1000 visitors and still only 10 turn into customers, I’m probably sending you crappy traffic.
The value a visitor brings
Duh. I mean that’s what we’re looking for right? How do we increase the macro conversion, the sale? So everything we do here is about testing and find areas of improvement that lead to improved conversion rates.
How do we increase the macro conversion, the sale
Getting customers that purchase from you requires a certain financial investment. Your budgetary number for how much you spend to acquire a customer is known as the “cost per acquisition” (CPA) or alternatively the “customer acquisition cost” (CAC). The initial cost per customer should ideally be less than the profit made once they’re converted or if you’re in growth mode and not so much in profit mode be lower than your LTV.
How much you spend to acquire a customer
One could make the argument that LTV could be the most important KPI, which is “a prediction of the net profit attributed to the entire future relationship with a customer.” Essentially it’s how much money you make off of a customer over their lifetime as your customer.
Prediction of the net profit attributed to the entire future relationship with a customer
This is the first number I hear when folks describe their partner ecosystem. “We have 1,200 partners in North America, 500 in EMEA and 420 in APAC.” Although this is a measurement of size (and executives LOVE large ecosystems), it is not a measure of quality or performance.
Measurement of size (and executives LOVE large ecosystems)
At a base level, this is the revenue from partners purchasing products from you and reselling them. At a slightly more progressive level, this is tracking the revenue sourced by partners. (Did they indicate they brought you the deal by registering it?) At an advanced level, you should be tracking the partner’s influence through all the stages of your sales cycle. (Did they drive stage 1, 2, 3 and 5 – while your internal teams drove stages 4, 6 and 7?)
Partners purchasing products from you and reselling them
The adoption of deal registration systems brought these favored metrics: the number of deals registered, average deal size and average time to close. Knowing how many deals the partners are pursuing is great; however, this number doesn’t always represent true action. Sometimes partners register anything they’ve heard of (gasp!). Better metrics are active deals and close ratio.
The number of deals registered, average deal size and average time to close
Most vendors require a certain number of partner people trained or certified to progress up the program level. This is a great metric and will also show you the commitment-level of a partner. Add a little twist to this metric and correlate the number of people trained (sales or pre-sales technical) to the deal-close timing (do partners close faster if more are trained?) and to customer satisfaction.
Number of partner people trained or certified to progress up the program level
Most vendors conduct some type of yearly partner satisfaction survey to gather feedback from their partners on program elements and communications. Possible versions include: a formal survey with multiple questions and anonymous responses tabulated in a Net Promoter Score format, quarterly business review sessions, one-on-one discussions with the executive team, Partner Advisory Council meetings, or informal discussions through the Channel Account Manager. Only one of these methods produces reportable metrics.
Partner satisfaction survey to gather feedback from their partners on program elements and communications.
A few vendors are doing this, but primarily only for top tier partners and on an ad hoc basis. It is important to understand which partners are marketing, selling, implementing, configuring and supporting customers successfully. Without knowing these metrics, you could be arming partners to create really unhappy customers. And we all know the customer always blames the technology, not the solution provider.
It is important to understand which partners are marketing, selling, implementing, configuring and supporting customers successfully.
Every vendor wants partners to market these days – almost more than they want them to sell. Particularly with cloud- or subscription-based products, the focus has shifted to increasing demand generation so the vendor can take the referral, close the deal, sign the paper and provision the product. However, very few vendors are looking at the effectiveness of a partner’s marketing campaign. Yes, marketing ROI. This is important to track because you want to provide marketing dollars and resources to partners that execute effective campaigns that actually produce results.
How effective of your marketing.
If you don’t know how profitable your partners are with your solution, how do you know if they’re going to invest in more training, marketing or sales activities? We’ve seen vendors attain fantastic insights on partner policies, programs and people by executing a detailed and methodical study of their partners’ profitability.
How profitable your partners are with your solution
Another measurement of a partner’s future success is determining how engaged are they with your organization. The more engaged they are – downloading resources, taking training, completing forward-looking business plans, connecting with CAMs and field sales teams – the faster they grow and the more they grow. This is easier to measure than profitability, but fewer companies bother to collect this information and analyze it.
How engaged are they with your organization.
Combining and expanding upon both partner profitability and partner engagement leads to measuring the Total Partner Experience (TPE). In this evaluation a vendor measures a partner’s overall experience with you – from policies to processes to personnel and profitability. This provides analytics on program initiatives that are effective at engaging and enabling partners and insights on processes that are burdensome and need to be streamlined. Another great aspect of TPE is that you generate a baseline number the first time you measure it, and then can show measured improvements to your executives and partners every year!
Measuring the Total Partner Experience (TPE).
What social media channels are you using, how can people reach you, are you visible? Reach metrics are often vanity metrics. Vanity metric means that it’s relatively easy to pump up the absolute numbers. For example, you can buy 5000 followers for $5. But you will get very little interactions and engagement from these 5000 followers. These social media KPIs should tell you if you are getting the word out. Is the reach wide enough to justify your budget?
Fans and followers – a bit of a vanity metric
How likely are followers going to engage, spread your message and interact with each other? Social media interaction KPIs are the ones you need to pay close attention to. These statistics measure people who have actually taken action.
Likes – the least they can do
How do attitudes change due to the social media activities? The positive opinion is the branding value that should convert into sales. Metrics like net promoter score, satisfaction and sentiment will help you understand the more qualitative nature of your reach. They will show you if you have tons of complaints or people are ecstatic about your brand.
Share of conversation vs competitors
How many sales and other real-world result do you get from social media? These are some of the most important social media KPIs and some of the hardest to measure. Your social media marketing has to generate positive ROI. Your main goal would be to find ways to connect reach on social media to dollars in sales.
Conversions (email subscriptions, downloads, install widget or tool, etc)
The raw output of your social media team. It is important to measure if increases in your input produce similar or better increase in the other KPIs. And, of course, your boss probably wants to know how much are you spending
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