Tracking Ecommerce - KPI's Every Business Needs

There's a great saying: What's measured, improves. And when it comes to ecommerce, that's been shown to be true time and time again.

The question is, what needs to be measured, and how?

The basis of tracking KPI's is quite simple. Start with a spreadsheet and list a handful of KPI's that allow you at a glance to see which parts of the business is working and which need attention. It's pretty easy to set up for ecommerce and once it's running it becomes massively useful.

Starting out, some key numbers you want to be tracking would include:

- Visitors or sessions
- Conversion rate
- Number of orders
- Average order value (AOV)
- Items per order
- Sales total

If you've read the article about our CART framework, you will understand why these numbers are being tracked. Most people track the end results of ecommerce, sales totals for example, when what you actually want to measure are the components that lead to those sales i.e. sessions, conversion rate, AOV etc. Those are the things you can control and change, and therefore improve. The sales come as a result of improving those components.

Once you have this in place, you may want to choose just one that you focus on improving for this month. Average order value is a good place to start. Then next month you choose something else. But that should never replace continuous tracking of all the KPI's.

How do you track them?

Create a new Excel spreadsheet or Google Sheet and put in all the numbers for the above KPI's in each day. Yes, every day. Can you do it weekly? Sure. Is it as effective? No. On a day to day basis you may not see major changes. But it's the trend over time we're looking for.

But I must reiterate, it requires updating every day. There's a discipline involved beyond just inputting data into a spreadsheet, it only takes maybe 3 minutes tops, but doing it every day keeps everyone focused on the numbers and improving them.

And yet occasionally we see business owners skipping it for a few days because they feel something else is more important at that time.

There's a common thread with those who don't stick with it. Things start to go downhill. It's not because they're not filling in a spreadsheet, it's because they return to focusing on day to day tasks and not the things that make the business work.

And without those daily numbers, they don't know what levers to pull when things go bad. They grasp at straws, discounting and over-emailing, changing ads, experimenting in places where their market doesn't go, and it all just gets worse and worse.

All for saving 3 minutes a day to check their numbers are still going in the right direction.

If you really want to get unstuck, if you really want to grow, you HAVE to know what numbers need to change. And the sooner you start, the sooner you'll see the difference.

Article by Gary Baker

Gary Baker is a UK-based ecommerce consultant, coach and investor with over 20 years experience running ecommerce businesses in a range of industries. He currently heads up Ecom180, a consulting firm focused on assisting ecommerce businesses with turnarounds, growth and exits. His extensive hands-on experience allows him to provide tailored advice based on firsthand knowledge of the difficulties and successes that come with running an ecommerce business today. You can find more about him at garybaker.online