ECommerce companies run on data. If you're reading this, you already know how true that is.
Whether you run your company through Google Analytics, Shopify, or any other system that collects and manages your orders, that data needs to be used, not just collected.
The issue is... it's hard to use! It's annoying to get at, there are mountains of data to dig through, and it could be located in multiple sources.
This is exactly why having your own "ECommerce KPI Dashboard" is so important! A good dashboard can show you exactly what you want, how you want to see it, and automatically update, among other benefits. All those benefits allow you the ability to drive decisions and strategies from your data.
ECommerce KPIs
First, let's talk KPIs.
The great and terrible thing about ECommerce is that there are dozens of KPIs that could be hugely important.
It's easy to get analysis paralysis (when there are TOO many metrics to look at) in this industry, so be mindful when selecting your KPIs.
I like to highlight some KPIs and give the business reason why they're important, but don't feel like these are the be-all-end-all.
It's often easiest to group them into some major categories too - this you can lean on a bit more. The three main categories are the following:
Effectiveness
Financial
Website
ECommerce Effectiveness KPIs
The goal of these is to get a grasp on how well you're doing what you're doing. Normally these combine a few pieces so if you stop reading after this section, you've at least got a really good starting point.
ROAS
ROAS or Return on Ad Spend measures what it sounds like... for every dollar you put into ads, how much are you getting back?
This is simply Ad Revenue / Ad Spend.
This is important to know which ads and which platforms are working best and to make sure you're getting a profit-inducing return on the money you spend on ads.
Breakdown dimension: Channel (ex. Facebook vs Google)
Complimentary KPI: Cost per Acquisition (specifically Ad Cost). CPA = Ad Spend / New Customers
The goal for CPA isn't to get this to $0 per se, it's to rank your different initiatives and Ads to see what's best.
Conversion Rate
Conversion Rate can wear many hats, but a good foundation here is to know what percent of visitors are actually buying.
Conversion Rate = Orders / Sessions
Most people are in the 2% range, give or take. So if you're at 0.2% then you might not be getting enough Orders sold on your site. If you're at 5% then you might want to drive more traffic and capitalize on more people even if your rate goes down.
Net Promoter Score (NPS)
Net Promoter Score is meant to gauge how likely users are to recommend your company to others. It can be called a good measure of Customer Satisfaction.
It's a 1 - 10 scale that users fill out on their own. Although this results in a number, it's one of the more qualitative metrics here because it's pretty subjective and out of your control, really.
Breakdown dimension: Product NPS vs Website Experience NPS
Ideally, both of these go up, but if they're not, that could point you to the experience that customers are having and what to improve on.
Others worth noting:
Cart abandonment rate
Repurchase rate
ROI
ECommerce Financial KPIs
These aren't meant to knock your socks off - they're fairly standard metrics, but that doesn't mean they're not important.
Revenue
This one is kind of a no-brainer. Very standard but very important.
Complimentary KPI: Revenue per Session = Revenue / Session.
The goal of this one is kind of fun… for every session on your site, you'll make X amount of revenue. As much as it is fun, it's also important to dive into. If it goes up or down, that could easily give you insight into your revenue or sessions not being where you want them to be.
Gross Margin
Make sure the products you are selling are profitable!
Gross margin = (Revenue - COGS) / Revenue
Gross margin gives good insight into profitability and can lead you to decisions on pricing, supplier cost, and other "top of the income statement" pieces! This is sort of the first line of profitability that you should be measuring at a company level, but also at a product or SKU level.
AOV (Average Order Value)
For an average order, how much revenue does that bring in? Average Order Value levels the playing field between revenue increases, price changes, and order counts. If bigger orders are the trend, fantastic, if not, it may not be a concern but it is absolutely worth noting.
AOV = Revenue / Orders
Complimentary KPI: Orders.
Orders are a good metric to measure as a foundational metric. If orders are going up, then the rest of the business should follow. And the opposite is true for orders going down.
Other worth noting:
Lifetime Value of a customer
Items / Order
Refund amount
ECommerce Website KPIs
Sessions
Sessions are typically tracked through Google Analytics, regardless of where your Ecommerce data is held. Sessions broadly measure the number of visits to your site from all types of users.
This is a good metric because it's one of the staples for analyzing the traffic to your site. The higher the sessions, the most "hits" on your site and, in theory, the more people are buying things. It's a good overall pulse check.
New Users
New users differ from sessions because it's only new folks visiting that get counted here.
Return visitors are fantastic and retention is a great cornerstone to a business model, but it's still pretty important to measure the number of new users finding your site. This is a good leading indicator of growth!
Organic Traffic %
Also in Google Analytics is the breakdown of channels and mediums that people are getting to your site from. Organic traffic comes from non-paid avenues and it's important to measure to get a good gauge of your SEO effectiveness and the appetite for your products.
Organic traffic is a big one because the most ideal situation is that you don't have to put ads out at all, right? Why pay for traffic when you could get it organically for free? That's obviously a bit of hyperbole, but you get the gist.
Others worth noting:
Time on site
Bounce rate
Building an ECommerce KPI Dashboard
The quick overview here is that you need the data to be in a good format, have it automatically updated, and have it shown in a digestible, and decision-driving format.
I'm a big fan of Google Data Studio for a lot of different reasons, but ECommerce is certainly one of the industries that it can be great in. Google Analytics is, of course, a very common data source for Ecommerce data and it links up beautifully with Data Studio. They were actually made for each other - Analytics collects the data and Data Studio presents it visually so you can actually use it.
Even if you don't use Analytics to hold a lot of your data, Data Studio can probably connect to it in some fashion, even if it's through a third party.
Without going into the details of how to build the actual dashboard, keep these few key themes in mind… the dashboard should be:
Easy to Update
Easy to Understand
Easy to Use for decisions
If you use Analytics and Data Studio, the first step is done - Analytics updates Data Studio automatically.
I'm a huge fan of dashboards (it's my company's main staple and a huge part of our business model), but taking my bias out, it's still a really important piece of getting your data into a useable format.
The simpler the visuals the better! This is not a situation where expertise means you should make incredibly complex charts and graphs.
Analytics (and most other data collection software) are great for what they're built for - collecting data; not for visualizing it or making it easy to understand, or helping you make decisions based on it. That's where you need a dashboard that's built to your custom specs and your particular KPIs.
Once you have your KPIs in there in an easy-to-understand format, then you can effectively use it for decision-making!
There are literally dozens of KPIs that could be really impactful for any Ecommerce business. It's tough to narrow down the field, but it's worth starting with a few main ones. Build an overview dashboard based on those initial ones, then you can make a secondary dashboard that dives a bit deeper into some other KPIs if you need to. That way you can have a pulse check and then a deep dive into your entire business. Remember that all of those views should be visually appealing or at least easy to understand or else they become unused and borderline useless really quickly!
In summary... pick some KPIs that pop into your head as important and put them into a visual format (a dashboard) so you can actually use your ECommerce data to make decisions!
Take Your ECommerce Business to the Next Level
Thank you so much for reading our blog on ECommerce KPI Dashboards. Are you ready to take your ECommerce business to the next level? Check out our financial dashboards to help you package your most important ECommerce data into a user-friendly, easy to understand dashboard. If you need a custom solution or have questions, do not hesitate to send us a message! Thanks again for visiting Pineapple Consulting Firm.
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