The business sphere has greatly evolved to the extent that no serious business can make a move without relying on data and insights.
If you’re an online business or hoping to start selling online in the near future, there are what we call key performance indicators or KPIs that can help you determine the effectiveness of your marketing campaigns. More so, the success of your business.
A key performance indicator (KPI) is a quantifiable measurement or a benchmark with which a business can assess its performance. Key performance indicators may vary from business to business depending on the type and the already set goals. Putting KPIs in place can help you monitor and track your business’ efforts in form of data.
Think with Google confirms that over 94% of the top-rank marketers agree that to truly matter, marketing KPIs must be linked to broader business goals. If you want to track your online business performance, here are the best metrics to help you out.
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The 9 Indisputable Key Performance Indicators to Track Any Online Business’ Success
Are you aware that your website can either make or break your business?
For a business to exist or operate digitally nowadays, it mostly must have a website. Those that aren’t able to create one mostly use their social media accounts to reach out to their customers.
It is very essential to understand the amount of organic traffic that your site receives whether weekly or monthly.
Analyzing your site’s performance can help you understand whether your SEO strategies are working or not. Organic traffic as a KPI generally measures the number of visitors that come to your site from organic search results (think someone searching on Google or another search engine like Bing).
If you want to improve your organic traffic, it won’t be just a matter of having a beautiful website. Your site must load fast and be fully functional, be optimized for search, and have content that answers questions and solves problems.
The latest stats show that 46% of users don’t revisit poorly performing websites. Similarly, a site/page that takes longer to load reduces customer satisfaction by 16% – LoadStorm’s discovery.
You can use Google Analytics to find out how much organic or paid traffic your site receives. Also, you can find other important stats such as where the visitors come from and the amount of time they spend on a specific page.
Understanding what website engagement is can really help you direct your business towards success. First and foremost, website engagement is when your website visitors take more time on your site and even click through to other pages.
Precisely, it shows whether the users are taking the desired course of action. I.e making a purchase, subscribing or contacting you for a service.
On a high level, you can categorize your website data into page views, average time on a page, average session duration, and bounce rate. You can dig quite a bit deeper, but these are some important high-level stats you should be tracking.
- Page Views – They indicate the number of times a site is viewed by a visitor. Each time a visitor loads the page is counted as a page view.
- Average Time on a Page – This shows the amount of time a visitor spends on a page. If more visitors are spending more time on the page, it means that it is engaging. Quality content whether text, images, or videos can increase the amount of time users spend on your website.
- Average Session Duration – It refers to the amount of time a visitor spends on your site during the average visit.
- Bounce Rate – Whenever a visitor doesn’t proceed to another page on your website or doesn’t take the desired action, this is termed a bounce. There is a range of factors that influence a site’s bounce rate and these include type of industry, and website purpose, content on the site, user experience, among other factors.
All in all, high website engagement indicates that your audience is making full use of your website by clicking the links, liking the content, commenting, buying products, and contacting you via support.
Social Media Interaction
If you’re a business without a website, your social media marketing efforts will be entirely reflected through social media interactions.
Although it also applies to businesses with a website, monitoring your social media interactions can help you track your business growth.
There is a range of social media KPIs that can indicate the performance and rate of growth of your online business. Understanding and applying these marketing KPIs can help you influence your online business’s growth positively.
Social media interaction indicates the effectiveness of your digital marketing campaigns.
Some of the social media metrics you need to pay attention to include viral posts, customer reviews, comments/replies, impressions, likes, and shares. All these social media KPIs can indicate your business’s social media interaction and results.
New Visitors/Returning Visitors
New visitors refer to first-time visitors on your site whereas returning visitors are those that have been on your site before.
Although you cannot rely on this KPI solely, new visitors and returning visitors can help you run targeted campaigns or ads. It’s generally because you know the number of visitors you are investing in.
For an eCommerce website, there is a range of tools that can help you study your website users if you want to run a targeted (personalized) marketing campaign.
You can use tools like Google Analytics, Semrush, Google Search Console, and others to keep track of what’s happening on your site and what content visitors are engaging with.
Customer Acquisition Cost (CAC)
The customer acquisition cost is a vital KPI and highly influences the bottom line of paid advertising campaigns.
CAC mainly indicates how much it costs a business to obtain a new customer.
When you incur a high cost for paid traffic and then get low conversions, your customer acquisition budget requires a check.
It should be noted that CAC varies from business to business and industry to industry. Either way, for every business that conducts targeted campaigns, getting to know your CAC’s value is crucial.
Any profitable or beneficial action taken by a visitor on a website or social media site is known as a conversion. How you define a conversion really depends on what you seek from your visitors.
- eBook download
- newsletter signup
- contact form submission
- product purchase
- software subscription
These are just a few of the types of things that qualify as conversions. As you can see, some translate directly to dollars and cents, while others are more abstract.
A conversion rate refers to the number of visitors that take the desired action. Conversions matter to every business as they help indicate whether your marketing funnel is effective or lagging.
Like some other KPIs, conversions also differ from business to business.
If your website requires visitors to make a purchase, subscribe or submit a form and they do, then this is termed a conversion.
A good conversion is when more visitors make use of your website’s CTAs (call-to-action). You can calculate your business’s conversion rate by dividing the total number of visitors whether on a page or site by the total number of conversions.
Cart Abandonment Rate
Are you an eCommerce website and highly rely on your website to receive orders?
A high cart abandonment rate can indicate several issues that require immediate action. Cart abandonment refers to the situation when a buyer puts something in the cart or even proceeds to the checkout and ends there without finalizing a purchase.
You can take the number of completed transactions, divide it by the number of carts and then multiply the product by 100.
Some of the best ways to combat cart abandonment include offering free shipping, letting customers make orders without creating an account, or providing product reviews.
Customer Lifetime Value (CLV)
CLV refers to the amount of money a customer is willing to spend on your products or services during their relationship with your brand over a given period.
Take it this way, if a customer likes your products (apparel) and continuously buys, that means that your business is making more money from a customer.
However, when a customer buys from you once and for any reason stops buying, this means that the customer’s lifetime value is low and your business is losing money.
You can calculate the CLV by getting the average value of a purchase and then multiplying it by the number of times a customer will buy each year.
Lastly, multiply the product by the average length of the customer relationship (in years). If you want to increase the lifetime value of a customer, you can do the following;
- Try out influencer marketing: You can simply partner with an influencer to promote your products or services.
- Provide a good user experience: If customers enjoy the time they spend on your website accompanied by quality goods, it is obvious that they will develop a loyal relationship with you.
- Run personalized campaigns: Personalized content allures customers. Simply study your buyer’s journey and then craft targeted content.
Wanna track your business growth effectively? Check your annual online sales or Return on Investment (ROI).
As for me, return on investment is the ultimate KPI you can rely on whether you’re a startup, medium-sized, or an enterprise to keep your business growth in check.
Generally, the effectiveness of the monthly or quarterly business efforts (capital or marketing) will be indicated by annual ROI or online sales.
Although there may be seasons when a business fails to perform well, tracking your business weekly, monthly, or quarterly, can help you divert resources or invest more in potential areas.
ROI can be calculated by subtracting the initial value of investment from the final value of the investment. You need to then divide the product by the cost of investment, and lastly multiplying by 100. With this KPI, you can have a real measure of how successful your business has been online and set SMART objectives effectively.
If you want to improve your online sales or ROI, you should focus on conversion rate, cart abandonment, number of orders, and customers’ experience.
Keenly monitor your return on marketing investment because it’s key to determining customer acquisition cost (CAC) and customer lifetime value (CLV).
Final thoughts on website KPIs
To encapsulate, there are many key performance indicators that can act as a benchmark for your business’ performance. All you have to do is define your KPIs effectively depending on your business goals.
The main point to take away from this article is that is absolutely critical for you to keep an eye on things to determine how your business is performing.
Tracking the KPIs in this article will help you determine how things are rolling along and uncover areas for improvement to help take your business to new heights.
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