When it comes to your business, paying attention to your metrics can help you identify the positives, negatives and potential areas for improvement. Whether you are new to the world of business or just trying to enhance your current potential, learning how to distinguish and seriously evaluate metrics and marketing KPIs can help you grow your company and your capital.
Metrics and KPIs
In general, metrics are used to evaluate how your business is performing. For example, financial records, performance levels, and employee satisfaction are all ways that help you develop metrics that report on various aspects of your business.
Key performance indicators, or KPIs, are a subset of these overarching business metrics. KPIs are often more specific than the overarching metrics. KPIs can help you determine trends, as well as to identify potential improvements that can lead to positive business enhancements.
Determining the Right KPIs for Your Business
Every business has its own set of metrics and KPIs. For example, the trends and marketing strategies for Mom and Pop’s Pizzeria on 5th Street will vary greatly from those of International Steel Cutters, Inc.
Determining which KPIs are right for you depends on your business structure, product or service, overall goals, and audience. For e-commerce websites or blogs, however, you should be aware of several standard marketing KPIs.
Traffic refers to the total number of website visitors. Visitors come to your site from various sources, including referrals, organic searches, social media links, emails, and direct address inputs. Traffic is important. Without it, your e-commerce business will fail. Increases in traffic typically lead to increases in sales and performance levels.
For an e-commerce website, your conversion rate is defined by the percentage of visitors who purchase from your site. (To determine this value, you divide your total number of site visitors who make a purchase by the total number of visitors who came to your site.)
On average, a conversation rate of roughly 3% is considered standard. However, that leaves plenty of room for improvement. Making products easier to find, providing compelling text, and visually pleasing graphics and videos are known to help foster higher conversion rates.
All those clicks, shares, likes, mentions and comments are engagements. Page views per visit is an example of an engagement. The average number of pages a user will view on your website before purchasing, commenting, or leaving can help you establish a trend. In general, users do not want to filter through a lot of pages before finding what they are looking for.
Repeat Customer Rate (RCR)
For an e-commerce website, making a sale is a step in the right direction. However, encouraging repeat customers can help you predict potential future sales based on loyalty. For most e-commerce businesses, repeat customers are a staple when it comes to profits.
Repeat customers tend to come back for a few reasons. If they are happy with their initial purchase, they may return to buy more items from you. If they were dissatisfied, however, providing excellent customer service can keep customers returning. (Emails and newsletters are also a great way to keep customers up to speed on changes, promotional sales, and discounts.)
Customer Lifetime Value (CLTV)
When a customer makes a purchase, it comes with a value. Your average order value (AOV) is the average amount a customer spends each time they order from your website. (To calculate your AOV, you add up the total value of all orders and then divide it by the total number of orders placed.) As your AOV increases, it means that the profit you make from each customer has grown.
For repeat customers, this value is much higher than that of a one-time buyer. (Which is exactly why your RCR is important!) Based on your AOV and RCR, you can actually begin to predict the worth of each customer relationship.
51Blocks Can Help
Marketing KPIs can be complex. Not everyone has the time, ability, or understanding to carefully define the marketing KPIs they need. That is where 51Blocks can help.
The experts at 51Blocks are not just marketing professionals. They are a team of highly skilled, experienced individuals who thrive on helping your business succeed in the digital world. From search engine optimization (SEO) and pay-per-click (PPC) metrics to full white label partner services and website development and hosting, the professionals at 51Blocks understand the nuances of digital marketing.
Finding the right KPIs for your business takes time and effort, particularly if you are unfamiliar with how to do so. Understanding what those KPIs are telling you, and determining the trend they may indicate, can be equally as time-consuming and frustrating. Hiring a professional, like those at 51Blocks, to handle your marketing KPIs and their meanings allows you to focus on other aspects of your business.
Contact 51Blocks today to find out more about how we can help your online business excel.