E-commerce Key Performance Indicators
What we track, how we track it, and why.
Key Performance Indicators
The dictionary definition of Key Performance Indicators (or KPIs as they’ll be referenced to throughout this post) is a quantifiable measure of performance over time for a specific objective.
In short, KPIs are the metrics that matter. They’re the data points that truly show you how your business is doing, what you should be measured or judged against, and more.
Some businesses suffer from not having enough data. Maybe you don’t know which numbers to look at so you default to not looking at many at all. But, that’s usually not what we see…
Most businesses suffer from having too much data. In today’s e-commerce landscape, every software has an analytics tab that shares hundreds or thousands of data points for you to digest. But which of them matter most? We hear questions like these quite a bit…
- Do clicks or impressions matter more?
- Should you be focused on top-line, bottom-line, or both?
- Should you care more about Traffic, Average Order Value, or Conversion Rate?
- Do likes on Instagram even matter?
- What’s your blended ROAS (Return on Ad Spend)?
- How does iOS 14.5 affect all of your advertising data?
- Should you prioritize driving down your CPMs, or care more about your CPCs?
- Also, CPC is Cost Per Click and Cost Per Conversion – WHY?
- Online Store Revenue
- Wholesale / Draft Order Revenue
- Amazon Revenue
- POS Revenue
- Facebook Shop / Route
- Total Revenue
- Average Revenue / Day
- GA Users & Pageviews
- Shopify Sessions
- Shopify Orders
- Conversion Rate
- Average Order Value
- Repeat Buyers %
- New Customers
- LTV / CAC
- Total ROAS
- Total Ad Spend
The following are tracked for each relevant advertising platform.
- Total Spend
- Total Impressions
- Total Conversions
- Cost Per Acquistion
Weekly & Monthly KPIs
KPIs are updated on both a weekly and monthly basis to look at week over week trends as well as month over month.
Monthly KPIs typically include monthly and / or quarterly forecasts and targets, depending on the business.
Download Our KPI Template
Drop your email below, and we’ll email you a link to copy our KPI template and get started for yourself.
CONSISTENT & CURRENT
KPIs will change business to business, but there are some core principles that matter to all businesses.
Gather Consistent Data
- Trends over time are only trends if data is gathered the same way, over time. “Garbage in, garbage out” is one of the most common adages when it comes to data, and taking inconsistent measures over time is one way to ensure that you’re putting garbage in.
Analyze Data Regularly
- We’ve found weekly data updates to be the ideal cadence across a variety of businesses and industries. Watching daily data (in most cases), can be fruitless and cause rash decisions without enough data… whereas only viewing monthly KPIs can allow unhealthy trends to develop for weeks at a time. Updating both the weekly and monthly data on a weekly basis allows for the optimal amount of time to make key decisions.
Don’t Over Analyze
- It’s easy to look at data in a vacuum and make quick, rash judgments… For example, if your conversion rate plummets one week, you might assume you’re driving bad traffic to your website and encourage your marketing team to make aggressive advertising adjustments… but you didn’t check your inventory reports or talk to your Head of Ops and realize that ou actually had a shipping delay, causing a significant inventory shortage which was really the culprit of the conversion rate %. Good data should prompt you to ask better questions about your business, processes, funnels, and more, but don’t make rash reaction to small subsets of data without considering broader, macro factors that also affect your business.