You can’t scale what you can’t, measure
What this means is that you can’t improve something that you can’t track. Imagine trying to train for a marathon without tracking your distance or time, or trying to improve your gym game without noting what you previously lifted. You would never know whether you’ve improved, how to push yourself to grow or the areas in which you need to improve.
In order to scale and grow your business, you need to implement performance measurement by identifying and tracking the individual metrics (KPIs) that stimulate growth.
Better Data = Better Decisions
By identifying your KPI’s and analysing the data you can make accurate and impactful decisions to grow your business. A relevant KPI process also allows you to focus in on what is delivering the best value for money. In order to reach this point you first need to recognise / decide which key performance indicators lead to growth.
How do you find your key metrics?
To find your key metrics you need to start by highlighting your goals. For example, a KPI could be related to your goal of increasing sales, improving the return on investment of your marketing efforts, or improving customer service.
To help get you started, here are a few examples of common ecommerce goals and related KPI’s.
- Boost sales by X amount during the next quarter (or particular time frame). Key KPI’s to monitor to help achieve this would be daily sales, conversion rate and website traffic.
- Increase conversion rate by X amount during a specific time frame. Relevant KPI’s would be shopping cart abandonment rate, competitive price trends and conversion rate.
- Grow site traffic. To help increase site traffic you would need to monitor website traffic, traffic sources, bounce rate, social shares / activity and any promotional click-through rates.
The above are just a very small handful of goals you may want to achieve with your business, the key is to make sure your KPI’s are directly related to the core business goal. Of course this means you have to have a clear vision of what your goals are. What areas of the business do you want to improve? Which of these areas is your main priority? It’s better to focus on only a few key relevant metrics than have an array of useless data.
That being said, one of the greatest things about our new digital world is the ability to measure everything and the vast amount data available to us. Website traffic, conversion rates, bounce rates, open rates, time on page, click through rates, you name it when it comes to your e-commerce business you’ll never be short of statistics. The key is to be selective, less is more! Tracking too many muddies the water; your goal/s needs to be clear at all times. Also be aware that yes, social media is a great tool when used strategically, but the number of people who like your Facebook does not have a direct impact on your sales, it simply feels good!
What’s the magic number?
Every business is different, and depending on your goals will require a different number of KPI’s to get there. However, a good starting point is anything between four and ten, this ensures you’re getting enough data to analyse and make a difference but can still keep track of all the metrics.
Getting it right
Discovering the most relevant KPI’s for your business is worth the investment (time and money). By choosing the right key performance indicators (and KPI process) and understanding their impact you’ll be able to make informed decisions on the best way to grow your business through digital marketing and online advertising.
If you’re not sure where to start, we are here to lend a helping hand. At AIM we can help establish the most relevant KPI’s for your business. Give us a call on 0870 062 8760 or send us an email at at email@example.com.
If you found this article helpful you may also like to read our previous post on our 7 step formula to growing your business online.