Build a Solid Foundation With Key Performance Indicators, Part 2: Commerce Sites

Part one of this four-part key performance indicator (KPI) series focuses on the most important metrics to review for lead-generation sites. To be successful using Web analytics data, it’s imperative the findings you focus on directly relate to your overall business and site goals.

No matter what type of site you have, you can apply the four-step methodology outlined below to maximize the value of the analytics data you gather.

Establish KPIs

1. Define key site goals and metrics.
2. Configure the tracking tool.
3. Analyze the data.
4. Optimize the site based on the findings.

This ongoing process is most effective when periodically repeated to continually fine-tune a site. The overall process fails if key site goals and KPIs aren’t established early on and a method to measure the metrics tied to these KPIs isn’t related to information your team can act on to improve your site.

Commerce Sites

At first glance, commerce site metrics are usually the easiest to understand. But they often become the most complicated when the depth of exploration into buying behaviors and channel tracking is considered. In addition to understanding online purchasing behavior, it’s also important to factor in buying behaviors via catalog and retail environments.

Commerce KPIs

A commerce site’s key objective is to drive site visitors to purchase products, subscriptions, or services online.

For each of the following commerce KPIs there are a number of important metrics to track to understand the behaviors that improve each one. Some of the most common KPIs include:

• Overall purchase conversion. This is a basic calculation: Divide orders by site visits (or visitors). This is a primary metric to watch as changes are made to the site.
• Average order size (AOS). When visitors do buy, how much do they spend?
• Items per order (IPO). Encouraging visitors to buy additional products through cross-selling or recommendation engines can help a buyer who was only planning to buy one item decide to buy another. Conversion by campaign looks at how visitors from different campaigns or visitor segments convert to buyers. Understanding the differences can allow for tuning messages based on different audience segments. Understanding different metrics such as AOS, IPO, and lifetime value can offer even greater insight than just the overall conversion.
• Step-by-step purchase conversion analysis via the registration process. It’s important to understand where visitors drop out of the process, then focus on correcting steps that drive the most defectors. A small improvement to a conversion step within the purchase funnel can lead to a significant increase in orders and revenue.
• Analysis of purchase funnel defectors. When people do drop out of the purchase process, it’s often helpful to understand where they went. Understanding what additional information people are looking for can be helpful in optimizing the process.
• Effect on offline sales. Many sites list toll-free numbers or direct customers to retail stores as purchase options. The site plays a key role in the ultimate sale but unfortunately doesn’t receive any credit. A few solutions to overcome this:
  • Unique toll-free numbers. List unique toll-free numbers on the site that can be used to track sales it generates. Callers are often much more qualified and close at a higher rate.
  • Store locator. Understand the use of the store locator and know what percentage of visitors ultimately go to a store. Then a purchase value can be assigned based on store locator use.
  • Order printout. Encourage visitors to print out their shopping cart or configured product to take into the store to purchase. Collect this information at the retail level.

   

• First-time versus returning buyers. Understanding behavioral differences between what drives sales by first-time buyers versus returning customers can help improve overall site effectiveness.

Additional metrics and KPIs commerce site often track:

• Recency, frequency, monetary value
• Lifetime value
• Affinity analysis (product and site)

The insight to be gleaned by focusing on a commerce site’s top-level KPIs can often be monetized in short order. Remember, a 0.5 percent change in conversion by better understanding and acting on the step-by-step conversion within the purchase funnel can lead to a significant increase in revenue.

Next: the KPIs for customer service/care sites.

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