What is a Key Performance Indicator Report
Whether you are a novice or a pro at ecommerce, when it comes to interpreting data, KPI reports are central to understanding your customers.
There is always something new to learn.
This is especially true at the cutting edge of ecommerce, with Ecommerce platforms such as Shopify and Magento, where new mass-market 3rd party tools are spearheading the drive to ever greater personalization and driving competition in all markets.
This guide will help you understand how KPI’s, KPI reports and KPI reporting are essential to meeting ecommerce goals and for making better data-driven decisions.
At the heart of your decision making should be hard data. KPI reports make that otherwise overwhelming data useful.
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At the top of the Goal list that all other goals build towards is the sales goal or rather a goal of increasing sales to some degree or another.
Of course, as a goal, sales is a little too broad/vague an area to be useful. Therefore goals that provide an answer to the question of how to increase sales should be used.
Part of determining ‘the how’ is deciding how to measure performance towards each goal. Each goal might have numerous KPI’s to measure.
What is a Key Performance Indicator (KPI)?
Simply put, a Key performance indicator or just KPI for short is a measure of progress toward achieving a goal. A KPI can be comprised of one data set measured over time, or numerous different measurements combined to define a single KPI.
Business wide KPIs that you should be using for an ecommerce website include:-
- eCommerce KPIs
- Marketing KPIs
- Sales KPIs
- Customer Support KPIs
- Product Performance KPIs
- Product Category KPIs
Each of your KPIs should precisely define a process for implementation and measurement. For example:-
- KPI Objective: To Increase leads by 30%.
- KPI Measurement: A total leads KPI – calculated by adding of all leads from all channels, using Google Analytics data.
- Activities: Increasing the quality of lead generation channels.
- Responsibility: Responsible individual for making sure these activities are completed.
- Time-frame for success: 6 months.
What are Metrics?
Metrics are measurements, – numerical values that contribute toward a KPI. For example, leads from different sources would be separate metrics, which when combined together would equate to a leads generated KPI.
Without metrics, KPI’s could not be measured nor effective goals be set.
What are KPI Reports and how does it differ to KPI Dashboards?
Metrics often supply too much data to be useful visually, – not without some additional visualization tool. KPI reporting is a way to summarise and visualize data in a more digestible format. Here and sofar, this description also describes data visualization tools, often referred to as the KPI dashboard.
The difference between a KPI dashboard and a KPI report is that the former is for the daily monitoring of activity, while the latter enables the analytical interpretation of the data (understanding of data), not just the visualization of daily activity.
KPI Reports are what you need to understand your customers so that you can improve what you offer in order to meet their needs. The failure to use ecommerce KPIs and reports is akin to not knowing their needs.
A great way to describe it would be to say the use of KPI reports (or not) is the difference between success and failure in ecommerce.
Shopify KPI Reports
Shopify provides great reports, but the availability of these is limited according to the Shopify plan you are on. Therefore in order to be successful with Shopify you need to pay to upgrade your Shopify plan to access the all-important KPI reports. This is easier if you already have a customer base, perhaps a physical store with data to build upon.
The ability to understand your customers through data (Psychographic data, demogrphic data) provides the ability to segment and personalize what you offer.
Unfortunately, Shopify’s pricing plan does not meet every Shopify stores needs but luckily there are alternatives.
Shopify Analytics Alternatives
There are alternatives to Shopify’s tracking, analytics and KPI Reports which use Google Analytics as an alternative tracking provider. This, in turn, requires a way to combine the data sets of GA and that which is available in Shopify. This is necessary to be able to produce holistic KPI reports.
Enter Conversific, an ecommerce KPI reporting application for ecommerce (not just a Shopify application).
Ecommerce failure rates are at an average of 90% after 120 days according to one recent survey. They attributed failure to “Poor online marketing performance coupled with an overall lack of search engine visibility.” However, if you dig a little deeper, you will see the true cause is the failure to understand their audience and make the appropriate data-driven decisions. This would, of course, include improving marketing through personalization and through ensuring relevancy is central to any B2C communications.
The way to do this is through Goals, KPI reports, and metrics which are designed to increase understanding of customer motivation. In addition to a tool like OptiMonk which can be used to segment and retarget users based on their own particular interests. Terms like consumer journey, choice architecture and personas are key to understanding how to reach your ecommerce goals.
With Conversific you can get the data bit right, and everything else will follow.