When it comes to marketing for ecommerce, KPIs are not only difficult to assess, but they also tend to be confusing due to how numerous they are. We went through loads of lists and our first conclusion was: no sane person can keep up with more than ten, let alone fifty KPIs, especially if they don’t have a Customer Data Platform.
And because we know some of you still live in a pre-Velocidi CDP era, we narrowed it down to a more attainable number: five KPIs every Ecommerce Marketing manager should bear in mind.
So, without further ado but still hoping you would come to your senses and ask for a product demo, here they are, the 5 Essential KPIs for every Ecommerce Marketing Manager:
1. Customer Lifetime Value (CLV):
Customer Lifetime Value is an equation that can get as complex as you want. You can go with a range of possible solutions, from predictive analytics techniques to your simple heuristic, but the thing is measuring the future value of your visitor opens a new path of client-pampering in front of you. However, make sure to keep proper data management procedures in place because they can heavily influence the increase of CLV. As eMarketer reported, retailers that successfully combine offline and online data have access to at least four times the sales data. This gives marketers a much more robust and accurate measure of the lifetime value of the omnichannel customer.
2. Click-Through Rate (CTR) and Bounce:
For online advertisement, there’s no bigger deal than the click-through rate. Having a number of clickers as close as possible to the numbers of impressions is something we all struggle to make happen. There is, nonetheless a caveat that sits on top of it: the bounce rate from these specific clicks. Clicking an ad and then just closing the new link makes the buck you spent on that click pretty much useless, so be very wary of blindly trusting high CTRs: they may hide an entirely different conclusion after bounce is considered.
3. Mobile Engagement Rate:
This can be a real game-changer in customer loyalty measurement. One of the biggest problems in ecommerce is creating a lasting relationship with their customer. Mobile apps seem to cross that bridge with more confidence than their desktop counterparts: not only do people seem to convert more on mobile they also seem to become bigger fans of your product if they can do it from their phone. So try not to skip you mobile engagement rates, because this is probably where most of your future customers reside.
4. Cost per Acquisition (CPA):
This is a big one, of course. The balance between your marketing spend and the return you get from that investment is very prone to discussion because of the variables that might concur to this math. Customer Lifetime Value, for instance, may change the calculation of this KPI: is it wiser to spend $100 to get a customer who will only spend $250 dollars now but who is expected to spend $10,000 in the next three years or to invest $20 in one that is expected to get a $2000 basket once and never come back? Sorting out this kind of question is not always easy, but your cost per acquisition should still be one of your main KPIs (especially because it’s probably one of the most visible ones to your stakeholders).
5. Abandonment Rates:
Everything is looking fine and dandy, isn’t it? It’s time for a reality check. A quick look at people who just ditch their carts might be a good way to start improving processes. We know many reasons can stand behind cart abandonment, but there are things you can certainly do about it: one-step checkouts, increased payment options, privacy reassurement, all of these can help purchasing decisions. Some of these may require changes from teams other than yours, but looking past the abandonment rates is ignoring a problem right at the bottom of the funnel. You’ve come a long way to get that product in the cart, so losing it now is even more serious.
More from the Velocidi Blog:
- 5 Digital Marketing Analytics Mistakes CMOs Make
- Need to Know for Your MarTech Stack: CDP vs. DMP
- Best Practices for Measuring and Improving MROI