In the world of business, data is king. However, navigating this massive amount of information can be overwhelming.
Enter key performance indicators, or KPIs — the beacon that guides you through the stormy waters of data to the sunny skies of valuable insights for your business.
One of the most crucial aspects of ensuring business continuity is having a clear understanding of your business growth KPIs. This can help you develop better strategies, make more informed decisions, and ensure your business’s sustainable growth.
So, what exactly are KPIs in business, and how can they help you focus on what is most important for the success of your venture? Dive into this post to learn about essential key performance indicators for online stores and how to track them like a professional.
Understanding KPIs in Business
In a business landscape where competition is fierce and margins are thin, a keen understanding of business KPIs (key performance indicators) can spell the difference between success and failure.
So, what is KPI in business? Essentially, KPIs are measurable values that can be used to assess an organization’s success in meeting various business objectives. They come in many forms — from measuring revenue growth and customer retention to tracking employee performance and productivity.
What Are KPIs?
At its core, KPI, meaning in business, is about measurement — they’re the critical (key) indicators of progress toward an intended result. KPIs provide a focus for strategic and operational improvement, create an analytical basis for
Different Types of KPIs
When it comes to measuring business performance, there are various categories that KPIs can fall into. These categories help organizations track and evaluate different aspects of their operations, such as financial performance, customer satisfaction, operational efficiency, and employee productivity.
Here are some common KPIs that many businesses track:
- Financial KPIs: these measure your business’s financial health and performance, such as revenue growth, profit margin, and return on investment.
- Customer KPIs: these track how well you are serving your customers and their satisfaction levels with your products or services — for example, customer satisfaction scores, retention rates, and net promoter scores.
- Operational KPIs: these measure the efficiency and effectiveness of your business operations, such as inventory turnover and employee productivity.
- Employee KPIs: these focus on individual and team performance, such as sales targets and customer service ratings.
Why Businesses Need KPIs
Imagine navigating a ship without a compass. That’s a business without KPIs! As a business owner, you need to track progress, forecast the future, and make decisions with confidence. KPIs are the compass that helps you steer your ship in the right direction.
Benefits of tracking KPIs:
- Performance tracking: By defining and tracking KPIs, you can monitor your business’s performance in
real-timeand make necessary adjustments to stay on course.
- Goal setting: KPIs provide a benchmark for setting achievable goals and measuring success.
Data-driven decision-making:Instead of relying on guesswork, using KPIs allows you to make data-drivendecisions that can lead to better outcomes.
- Identify areas for improvement: By analyzing your KPIs, you can identify areas of your business that may need improvement and take corrective action.
Must-Have KPIs for Online Stores
As you can see, there are many different types of business KPIs and lots of metrics you can track. This may sound overwhelming at first and make you wonder what you should be focusing on in your online store. The thing is, depending on your business, the KPIs you choose to track will vary.
However, if you’re an online store owner, there are specific KPIs that can make a significant impact on your business’s bottom line.
So, what metrics are the most important for your online store? Read on to find out.
Getting more visitors to your store starts with understanding where your traffic is coming from. By tracking website traffic, you can identify which channels are driving the most visitors and adjust your marketing strategy accordingly.
Here’s what you need to pay close attention to as an online store owner:
- Number of online store visitors
- How much time people spend in your online store
- How many of the visitors are returning
- What device they use to browse your store
That helps you track your store’s traffic and adjust your marketing strategy accordingly. For example, if most of your traffic comes from mobile devices, it may be worthwhile to optimize your website for mobile users.
Tracking Orders and Conversions
For an online store, orders are the lifeblood of your business. Tracking orders can help you understand your customers’ purchasing behavior and make informed decisions to drive more sales.
Here’s what you need to track when it comes to orders:
- The total number of orders placed and the revenue
- Conversion rate (number of completed purchases/total visitors)
- Number of repeat orders
- How many items people usually buy
- How many items you sold during a specific period.
Once you figure out what factors contribute to bigger orders, you can use those strategies to encourage customers to buy again and make larger orders. For example, if you notice that orders spiked after you offered free shipping for a certain amount spent, you can use that tactic again to boost sales.
Track your financial flows to understand how well your business is doing and gain insights for the future.
Here are the accounting metrics you need to have an eye on as an online store owner:
- Your store revenue
- Average order value, i.e., how much money you make per order
- Average revenue per customer and visitor, i.e., how much money each customer brings you.
Tracking these numbers is essential to understanding your store’s financial health and making improvements. For example, if your average order value is low, you can focus on upselling or
Tracking Marketing Metrics
Customers access your store through multiple channels, including ads, emails, social media, and more. By pinpointing the sources that have a greater impact on your orders, you can optimize your marketing strategies effectively.
Here are the marketing metrics you should track in your online store:
- Performance of your marketing campaigns, such as
click-throughrates and conversion rates
- Where your orders are coming from (i.e., order sources).
How to Track Your Online Store Performance
While there are various tools for tracking your business KPIs, it’s much easier to track your online store performance where you manage your business.
If you sell online using the Ecwid by Lightspeed ecommerce platform, not only do you get a powerful online store, but you also get valuable insights into its performance directly where you manage it all — in your Ecwid admin.
With Ecwid, you can access
On the Reports page, you can get a comprehensive understanding of your store’s performance through key metrics: visitors, orders, conversions, and accounting, which can serve as practical business KPI examples:
- The Visitors section lets you keep an eye on store traffic, how long visitors stay in your store, what devices they use, and if they return.
- The Conversions section shows you the percentage of visitors who actually make a purchase.
- The Orders section lets you gain insights into the number of orders made, the revenue generated, new versus repeat orders, and the average number of items sold during a certain period.
- The Accounting section lets you stay updated on your financial flows. It provides valuable insights into your store revenue, expenses, average order value, and average revenue per customer and visitor.
- There is also a Marketing section that gives you insights into the performance of your marketing campaigns, order sources, and the marketing strategies you’ve implemented in your store that have led visitors to make a purchase.
You’ll find line charts to analyze and forecast trends over different periods, tables for a detailed data examination, and interactive pie charts for a quick and insightful overview of key metrics.
Simply click on the dropdown and choose the time interval you want to customize the reports. To get more insights, you can choose a period for comparison. This lets you view how the metrics of the current period have changed compared to a period from the past.
Benefits of Tracking Your Store Performance with Ecwid
There are various tools available for measuring your business metrics, but using Ecwid’s reports has its unique advantages:
- With Ecwid, you can track all the essential metrics in one place rather than using multiple tools to gather different types of data.
- Ecwid’s reports are automatically updated and synced with your store’s data, saving you time and effort.
- The reports are easy to read and understand, with colorful charts and graphs that help visualize your store’s performance.
- You have the flexibility to choose any period for each type of report and compare it with the same period from the previous week, month, or year.
- Each metric brings a range of specific parameters that help you dive deeper into your store’s performance.
- To stay in the loop, you have the option to receive weekly emails from Ecwid. These emails will not only provide you with your weekly stats but also offer some helpful advice on how to grow your business.
With Ecwid, you can use the trends, statistics, and parameters the Reports provide to refine your strategies and ensure that your business is on the right track. So why wait? Start tracking your online store’s performance with Ecwid today and use the valuable insights to boost your sales, improve your marketing strategies, and reach new heights in your business.
How to Start Using Reports with Ecwid
When it comes to running a successful online store, knowledge is power, and Ecwid provides you with all the necessary tools to track and understand your store’s performance.
To start using Ecwid’s reports, follow these simple steps:
- Sign up for Ecwid by Lightspeed.
- Open your Ecwid admin and click on the Reports page.
- Choose the type of report you want to view, such as visitors or orders.
- Customize the date range and other parameters to get a more detailed report.
Use the insights from the reports to make informed decisions for your business, and don’t forget to check in regularly and track your progress over time.
As an online store owner, it’s crucial to clearly understand your financial and marketing metrics to make informed decisions for your business. With Ecwid’s
To learn more about using the Reports tool in your Ecwid store, read this instruction from the Help Center.
How To Make the Most Out of Ecwid’s Reports
A great benefit of using Ecwid’s reports is that they unlock valuable insights into your online store data that would otherwise be challenging or even impossible to track with other tools. Here are some of the metrics you can track:
- Metrics that help you understand the success and
long-termsustainability of your business, such as revenue per customer or visitor
- Metrics related to your Ecwid store expenses
- Metrics related to conversion by customer segments, such as new vs. returning visitors or desktop vs. mobile visitors.
Let’s explore a few examples showcasing how a deep understanding of these metrics empowers you to make informed decisions that drive business growth and improvement.
Managing Advertising Campaigns
Revenue per visitor helps you plan your advertising campaign and ensures you don’t overspend.
Say, your revenue per visitor is $1. Knowing this information, you can adjust your marketing campaigns accordingly to spend less than a dollar to attract a visitor. This way, you’ll increase your profits in the long run.
Understanding Profits vs. Expenses
Metrics like revenue per customer help you plan future income. For example, if you know how many new customers you’re going to attract this month, you can calculate how much money you’ll make this month. This is helpful as it allows you to set realistic goals and track your progress towards them.
There are other metrics that help you accurately calculate your expenses and estimate future profits.
For example, in your Ecwid store, you have the option to specify the cost of goods — the cost price, which is essential for calculating store expenses.
When it comes to conversions by segments, like new vs. returning visitors, you can identify the segments with high conversion rates and focus on driving more people into those segments. Similarly, you can pinpoint the segments with low conversion rates and make improvements accordingly.
For instance, you’ve noticed a remarkably high conversion rate for orders among visitors who have previously visited the store. To maximize this opportunity, you could consider launching remarketing campaigns on Facebook to bring back visitors who have already shown interest but haven’t made a purchase yet.
Optimizing Website Experience
Metrics related to conversions by segments also help you identify areas for website optimization. Take, for example, desktop vs. mobile conversions. If you observe low conversion rates on mobile, it’s a clear indication that you need to work on improving the design of your website for mobile users.
Best Practices for Tracking and Measuring KPIs
In a world where data is king, your business’s ability to understand and use different KPIs will be a massive part of your success. So always keep an eye on those numbers because they all tell a story — the story of your business’s past, present, and, potentially, future.
To get the most out of measuring your business KPIs, here are some best practices to keep in mind:
Selecting the Right KPIs
Wrong KPIs mean the wrong direction. So, how do you pick the right ones? It’s about what’s vital for your business success. Here are some tips:
- Align with your business objectives: Choose KPIs that align with your business goals and
- Keep it simple: Don’t get weighed down by too many KPIs. Focus on the essential ones that truly measure success.
- Be relevant: Ensure your KPIs are meaningful and relevant to your business. Don’t just track something because it’s easy.
- Monitor trends: Look beyond single data points and track trends over time to see how your performance is changing.
With a vast range of KPIs available, it can be overwhelming to select the right ones for your business. But remember, what matters most is picking the ones that align with your specific business goals and objectives. Ecwid checks all these boxes by providing
Once you have identified the right KPIs for your business, it’s essential to track them consistently. Here are some tips for effective tracking:
- Set a frequency: Decide how often you will track your KPIs — daily, weekly, monthly, etc.
- Use technology: Consider using software or tools to track your KPIs automatically and analyze them in real time.
- Visualize the data: Create
easy-to-digestvisualizations of your KPI data, such as graphs or charts, to quickly understand trends and patterns.
- Track against targets: Set specific targets for each KPI and track progress towards those targets.
In that regard, using Ecwid’s
Congrats, now you know how to use KPIs to measure performance! Keep in mind, though, that business KPIs are a compass, not a map. They guide you, but your strategy is what gets you to your destination — business success.
Ecwid is your partner in navigating through the waters of ecommerce. With reports by Ecwid, you can track, analyze, and use those insights to boost your business forward.
Sign up for Ecwid and seamlessly migrate your existing store. You’ll love managing an online store that keeps you informed about its performance at all times.
You can also take advantage of Ecwid’s other features, such as inventory, order, and staff management, and marketing tools — everything that simplifies the life of a busy business owner. Plus, you can sync your Ecwid store with social media and marketplaces to sell on Facebook, Amazon, and more.
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