E-commerce

Dec 16th, 2017

KPI

KPI’s that can help improve your e-commerce.

Return on investment

Measure the effectiveness of channels pay comparing revenue to marketing spend.

\[\text{ROI} = \frac{\text{Net Profit}}{\text{Total Investments}} \times 100\]

Year over year growth

Measure and compare variations for revenue, conversion rates, average order size, customer lifetime value and more.

\[\text{YOY} = \frac{\text{Sales this year}-\text{Sales last year}}{\text{Sales last year}}\]

Customer lifetime value

Understand the average value of a customer by using total profits, number of customers, and average number of years you retain a customer.

\[\text{CLV} = \text{AVG order value} \times \text{Net profit \%} \times \text{AVG customer retention} \times \text{AVG purchases per year} \times \text{AVG customer lifecycle in years}\]

Average order value

Determine the AOV overall and for each important channel.

\[\text{AOV} = \frac{\text{Total revenue}}{\text{Total number of orders}}\]

Conversion rate

Proportion of visits that result in purchases both overall and per channel.

\[\text{CR} = \frac{\text{Transactions}}{\text{Visits}} \times 100\]

Customer acquisition cost

How much overall are you paying to get customers. This is not cost or conversion

\[\text{CAC} = \frac{\text{MCC} + \text{W} + \text{S} + \text{PS} + \text{O}}{\text{CA}}\]
MCC: Total marketing campaign costs related to acquisition
W: Wages associated with marketing and sales
S: The cost of all marketing and sales software
PS: Any additional professional services used in marketing and sales
O: Other overheads realted to marketing and sales
CA: Total customers acquired

Cost abandonment rate

Per each important channel & per total

\[\text{CAR} = 1 - \frac{\text{the total number of people who start checkout}}{\text{the total number of add to cart clicks}}\]

Search penetration index

How many visits are you getting from all search volume.

\[\text{SPI} = \frac{\text{number of visitors}}{\text{number of searches}}\]

Purchase intention

How many users are on your website to buy a product.

\[\text{PI} = \frac{\text{visitors that want to buy}}{\text{all visitors}}\]

Customer satisfaction index

Determined with post purchase surveys.

\[\text{Customer satisfaction scale} \rightarrow \text{scale 1-5}\]

Net promoter score

How many customers are willing to recommend you to their friends

\[\text{Net promoter score} \rightarrow \text{scale 1-10}\]