Common KPIs to Measure Your Web Shop Performance
A webshop is a place where your customers can buy your products and services. To make this process as efficient as possible, you need to have KPIs that measure the success of your website. These metrics are also useful in indicating the weaknesses of your webshop for you to take the appropriate remedial measures. This blog post will give you the common KPIs to measure your webshop performance and explain what they can do for you. Let us explore these KPI’s below.
- Total Revenue
The Total Revenue is an essential metric that shows you how financially healthy your webshop is. Total Revenue refers to the total income that your webshop generates from all sales of goods or services. If your total revenues are high, your webshop generates a lot of money and is thus financially healthy to offset your expenses. If your total revenues are low, this implies the webshop may be financially unhealthy and will not be as profitable as you anticipate. The Total Revenue can be calculated by the formula below:
Average price per unit (product/service) sold × number of units sold.
- The Average Revenue per Product
The Average Revenue per Product refers to the amount of money your webshop will generate from selling a unit of its product or service. Let’s assume your webshop deals in selling lava lamps. Your Average Revenue per Product will refer to the money that your webshop will get from selling one lava lamp. The Average Revenue per Product can be calculated by the formula below:
The Total Revenue of your webshop ÷ number of units sold
- Market Penetration
Market penetration refers to how much volume of products or services is sold to customers compared to the total market for these products and services. A brand can use this measure to estimate how valuable their products and services are to their customers compared to products offered by their competitors. The market penetration value of a product or service can be calculated using the formula below:
(Total no. of sales of your brand ÷ Total volume of sales for other similar products) × 100%
- Win Rate
The Win Rate refers to a measure of the efficiency of your web shop’s advertising efforts. You can boost the Win Rate of your webshop by identifying the points in your sales funnel where you are losing out on potential opportunities to convert more website visitors. You can achieve this by increasing engagement by offering better and interactive product knowledge to your leads. The Win Rate can be calculated by the formula below:
[No. of impressions won i.e. closed-won deals ÷ (closed-won deals + non closed-won deals)] × 100%
- Conversion Rate
The Conversion Rate is also known as the percentage of visitors who take action on your website. These actions can be purchased from your store or subscribed to your email newsletter. It is a measure that portrays how effective your ads, landing pages, and calls-to-action are. A high conversion rate means that your advertisement strategies effectively encourage more people to purchase from your webshop. It measures the number of conversions against the number of leads over a particular period. A lot of traffic does not necessarily imply that the conversion rate will equally be high. Your web shop’s traffic may be high, but very few people may be converting into buying customers. The Conversion Rate is calculated by using the formula below:
(No. of Conversions ÷ No. of Visitors to your webshop, i.e., no. of leads) × 100%
- Shopping Cart Abandonment Rate
The Shopping Cart Abandonment Rate is the rate at which your web shop’s visitors (leads) abandon their shopping carts without completing their purchase. When the Shopping Cart Abandonment Rate is high, it means there are underlying challenges in the process.
These could be:
- High shipping costs
- High cost of products
- Website errors
- A complicated checkout process
It is important to quickly correct these issues because they cause loss of income and Revenue when the sales are not made. The Baymard Institute estimates the global shopping cart abandonment rate for eCommerce stores to be a massive 70%. The Shopping Cart Abandonment Rate is calculated using the formula below:
[(No. of Completed Transactions) ÷ (No. of Created Shopping Carts)] × 100%
Monitoring your web shop’s performance is a necessary practice for brands that wish to thrive in the online business space. Use the KPIs described above to improve your business processes and start the exponential growth of your webshop.
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