Trends and customer behaviour change with each passing day. It can be hard for shop owners to keep their heads above water and really understand how well their business is doing. With all the data and information surrounding us, we often wonder, "Which of these numbers really show us how well our shop is doing?" This is where KPIs come in, also known as Key Performance Indicators. In this article, we want to dive deeper into the topic of KPIs. We want to clarify why they are so important and how they can help make your online shop even more successful.
Introduction to KPIs
KPIs, also known as key performance indicators, are like the thermometer for businesses. They can be used to measure how close or far a business is from its intended goals. Especially in the field of online commerce, there is a whole range of KPIs that are specifically tailored to make the success of web shops visible. Looking at these KPIs not only gives you a clear picture of the shop's current situation, but also important clues as to which steps would make sense next to refine your own business strategy.
Turnover and profit
The financial stability and success of an online shop is reflected in many figures and data. But how can you really take the pulse of such a business? The secret lies in the KPIs. Let's take the daily turnover, for example. It gives us a clear idea of how much the shop has earned in a single day. But this is only the tip of the iceberg.
Let's look at the turnover per visitor, often referred to as UPB. This value tells us how much an average visitor spends during a visit to the shop. If this value is high, it means that the shop's offer is well received by customers. If it is low, it could indicate that visitors are browsing but not buying as often. This is an important insight to adjust the assortment or the marketing strategy.
And then there is the profit margin. It shows not only how much of the turnover is left after all costs have been deducted, but also how profitable the shop actually is. A product may sell like hot cakes, but if the costs of production and distribution are too high, there is little profit left in the end.
All in all, these KPIs offer valuable insights that go far beyond mere total sales. They can help shop operators rethink and optimise their prices, offers or even their entire business model. It's like taking a deeper look into the DNA of an online shop to understand what's really going on and where there is potential for improvement.
Conversion and customer loyalty
Let's take the conversion rate (CR) as a first example. It shows us how many of a shop's visitors actually become buyers. A high value here could mean that the offer or the presentation of the products in the shop convinces the visitors. A low value, on the other hand, could indicate problems with the user-friendliness of the website or the offer.
The repurchase rate reveals how many customers return to buy again after their first purchase. If this rate is high, it could be a sign that customers are very satisfied with the products or service. A low rate, on the other hand, could be an indicator of dissatisfaction or the lack of incentives to buy again.
The Net Promoter Score (NPS) is another interesting indicator. It measures how likely customers are to recommend your business to others. A high NPS indicates satisfied customers who value your offering and would recommend it to friends and family. A low score could mean that there are areas where you could do better.
Finally, there is Customer Lifetime Value (CLV). It shows how much a customer will spend on average throughout their 'relationship' with your shop. A high CLV might indicate that customers keep coming back and remain loyal in the long term, while a low CLV might show that customers only buy sporadically.
Traffic and user behaviour
If you delve into the world of e-commerce, you'll quickly realise that it's not just about selling products. It's about providing a compelling and enjoyable experience for the people who visit the shop. But how can you find out if visitors really feel comfortable and if the shop meets their expectations? This is where the KPIs come in, giving us accurate information on how visitors interact with the website.
Let's start with the bounce rate. This metric shows what proportion of visitors leave the website after viewing just one page without clicking any further. A high value could mean that the home page or the first product visitors see does not appeal to them or that they do not find what they are looking for. A low value, on the other hand, indicates that the content is engaging and encourages visitors to discover more.
Another useful KPI is the number of pages per session. Here we see how many different pages a visitor views on average during a visit. If this value is high, it can be a sign that the visitor is really interested and takes the time to explore different products or content. If the value is low, it could indicate that the visitor does not have enough incentive to click further.
Finally, there is the average session duration. This metric shows how long a visitor spends on the website on average. A longer stay could mean that the visitor is thoroughly engaged with the offer and possibly even goes through the buying process. A short stay, however, could indicate that the visitor quickly loses interest or becomes frustrated.
In summary, these KPIs can give online shop operators valuable insights into the behaviour and preferences of their visitors. It is important to check these KPIs regularly and make adjustments if necessary to make the shop even more attractive to visitors. After all, it's all about giving people a positive experience and making them come back again and again.
Technical aspects
In this day and age where so much of our lives take place online, the user experience on websites plays an incredibly important role. Who among us hasn't left a website in frustration because it simply loaded too slowly? Or who hasn't been annoyed that a page looks weird and doesn't work properly on a smartphone? This is exactly where two key KPIs come into play: load time and mobile optimisation.
Let's start with the loading time. When you visit an online shop and search for a certain product, you expect the page to load quickly. Every additional second of waiting time can cause a potential customer to lose patience and switch to the competition. So a fast loading time is not only pleasant for the user, but also crucial for the turnover of the online shop.
Then there is mobile optimisation. With more and more people surfing the web on their smartphones, it is essential that online shops look and function well on smaller screens. This means not only that buttons need to be large enough to be easily tapped, but also that navigation should be intuitive and texts easy to read. If a shop is just as easy to use on a smartphone as it is on a desktop, then the operator has already done a lot right.
Marketing and customer acquisition
You can't just stand still on the information superhighway and hope that everything will run by itself. Online shops in particular face the challenge of continuously improving and adapting in order not to be overtaken by the competition. A crucial point here is, of course, marketing. Only those who are visible and address the right customers can be successful in the long run.
It is important not to simply advertise in the dark, but to run targeted, well thought-out marketing campaigns. But how do you know if your strategy is really bearing fruit? This is where KPIs come into play, specifically key figures such as cost per acquisition (CPA), return on advertising spend (ROAS) and click-through rate (CTR).
The CPA gives us an indication of how much a new customer costs us on average. This is enormously important, because if the costs are too high, it becomes difficult to work profitably. ROAS, on the other hand, shows how much revenue you generate in relation to the advertising spend. A high ROAS means that the marketing budget is used efficiently and the advertising measures are worthwhile. Finally, CTR indicates how many people who see an ad actually click on it. This can tell you how engaging and relevant the ad is to the target audience.
All these KPIs together provide a pretty clear picture of how well an online shop's marketing campaigns are working. They help shop operators to make targeted adjustments and to refine their strategy again and again. So it's not just a question of "advertising", but also of "understanding" and "optimising". A continuous learning process that can make the difference between a successful and a less successful online shop.
Returns and customer service
In online shopping, the shopping experience is not over when the "buy" button is clicked. In fact, a crucial phase often begins after that, which determines how customers perceive a shop and whether they come back. A big issue here is returns and customer queries. Everyone who has ever shopped online knows this: sometimes something doesn't fit or doesn't like it, and then it has to be returned. Or questions arise and you contact customer service.
This is exactly where it shows how much an online shop values its customers. A straightforward returns process and friendly, fast customer service can work wonders in gaining and keeping customers' trust. Conversely, a bad experience in these areas can ensure that customers buy from a shop once and never again.
But how does a shop operator find out whether it is well positioned in these areas? Precisely by looking at certain KPIs. The return rate, for example, indicates how many of the items sold are returned by customers. A high rate can be a sign that something is wrong with the products or that the item descriptions are not clear enough.
Then there is the customer service response time. It shows how long a customer has to wait on average to get a response to their enquiry. In our fast-paced times, many people appreciate receiving a response quickly. A fast and efficient customer service can make the difference here and ensure that customers feel well looked after.
In summary, when it comes to the long-term success of an online shop, the "soft" factors such as customer service and returns processing play a huge role. By regularly looking at the relevant KPIs, you can ensure that you are always on the ball in these areas and providing customers with the best possible shopping experience.
Warehousing and logistics
When shopping online, there are so many things that happen in the background that customers don't see directly, but which have a massive impact on how satisfied they are with their purchase. A very central issue here is how a shop handles its goods - i.e. stock-keeping - and how quickly and reliably it delivers.
Imagine you order a birthday present for someone. Every day that the package is on the way longer can be decisive. Or think of the annoying moment when you discover that a product you wanted to buy is sold out, even though it still seemed to be available online. Both are situations that can be avoided through efficient warehousing and delivery processes.
This is where KPIs come into play. Let's take the average storage time, for example. It shows how long products lie in the warehouse on average before they are sold. If products lie too long, it can be a sign that they are not in such high demand or that perhaps too much of them has been purchased. This ties up capital and takes away space for other, perhaps more popular products.
Then there is the delivery time. This is the time that elapses from the moment the customer places their order to the moment they hold their package in their hands. In a time when many people are used to receiving their orders within one to two days, a short delivery time can be a huge advantage over the competition.
So if an online shop constantly keeps an eye on such KPIs and strives to improve them, it can significantly optimise the flow of goods. The result: happier customers, lower storage costs and ideally more sales because people know they can rely on fast deliveries and good availability. So it's not just about having nice products and marketing them well, but also about how you store and deliver them.
Conclusion: Running an online shop is often like juggling. Between sales figures, customer feedback and technical details, you can sometimes get lost. But this is where KPIs come in and become a real friend to the shop owner. They are like a map that shows us where we currently stand and where our journey could go.
With their help, we not only get a wealth of data at our fingertips, but also - and this is at least as valuable - deeper insights. Imagine not only being able to see that sales have increased, but also to understand exactly why. That's exactly what KPIs allow us to do.
But there is one thing we should never forget: KPIs alone cannot tell the whole story. It's like cooking: Just because you have all the ingredients doesn't mean the dish will turn out. You have to know how everything works together. So it's about always keeping the big picture in mind and not just looking at numbers, but also taking into account the human element, the customer opinions and experiences.
It is this balance, the combination of hard numbers and understanding what customers really want and need, that makes the difference. Those who master this have a good chance of not only surviving but being truly successful in the highly competitive e-commerce market. So it's not just a question of measuring, but above all of understanding and applying.
