When you launch your e-commerce business for the first time, most of your time and resources will go into setting up the site and facilitating orders. However, after some time you’ll have to start focusing on how to optimize and improve your e-commerce store and that is where KPIs come into play. Successful e-commerce businesses are in that place because they regularly keep an eye on their KPIs, analyze and make necessary changes as needed.
Top Ways To Choose The Right KPI For Your Ecommerce Store
Let’s first know what does KPI means. Key Performance Indicator or as we say KPI basically means to measure the company’s performance by looking at the goals, plans, and strategies for the year or quarter. For instance, if you set an annual sales growth of 4% for the business, then the percentage change over the years is considered as KPI. It is used to rapidly assess the performance of the business.
As Peter Drucker said that you can’t manage what you don’t measure, so choosing which KPI to improve can be problematic as there are so many variable parts and so much data to analyze.
As KPIs depend on a number of factors, there are no proper steps for choosing the right KPIs but there are a number of things to be considered.
Below are a few common ways that are the best KPIs for your business:
- Choose KPIs based on your business objective and goals– Firstly, you have to list down all the objectives of your business and then connect your KPIs relating to those objectives. Actually, less is more at first, so five to ten KPIs are enough for a newly started venture. For instance, a KPI could be related to the goal of a business as to increase sales or improve the return on investment or improve customer service.
- Segmentation of data– Separating and resetting your data is necessary as it makes the work more convenient. This helps in many ways will go for every KPI you’ll need in your business. Spending more time on your data will give you a brief knowledge as well as you can understand your KPI more deeply.
- Every Industry and Business requires a different KPI– One should always keep this thing in mind that the organization’s business model will highly affect the KPI. No matter how the goals and objectives vary but the KPIs will always be an important part of the business.
- Only focus on a few key metrics– Don’t forget that when you’re starting a new business less is more, so you should focus on just a few metrics. Each and every industry and business has different goals and objectives so the KPIs that they’ll require will also vary and this makes it hard to choose the “few”.
At last, it is important for an e-commerce business to stick to the “less is more” rule and also being specific in the KPI section helps a lot. The main thing is to focus on the business goals and then select your KPI accordingly. Keep in mind to analyze the KPIs every few months.