Product Marketing KPIs
The Best Digital Marketing KPIs to Track for eCommerce
Running an online store has many benefits over a physical store. One of those benefits is the ability to track a broader (and more granular) range of key metrics. These metrics can indicate how well your store is performing and, therefore, help you understand how well your product marketing efforts are doing. Most importantly, you can use the data surrounding these metrics – known as KPIs – to further improve your digital marketing strategy.
Before we discuss the various KPIs that you should be using to constantly inform your strategy, we will first explain exactly they are.
What is a KPI?
KPI stands for “Key Performance Indicator”. Online businesses use KPIs to measure the success of their business, product marketing activities, and how customers interact with their website.
It is a set of metrics that varies in importance depending on your industry and your customer base. For example, eCommerce stores that sell high-value items are likely to get a low conversion rate. This is because before you spend thousands of AED on a diamond ring, you will do your research and discover the exact ring that is right for you. You might visit multiple jewellery stores – eCommerce and in-store – before you make a decision.
On the other hand, if you are purchasing a bouquet of flowers, you are more likely to make a purchase as soon as you find the flowers you like. Therefore, an online store that sells flowers is likely to have a significantly higher conversion rate.
One is an expensive, long-term decision, the other a low-cost, short-term purchase. Therefore, the measure for success when it comes to KPIs will be different. If you are unsure about what your KPIs should be for your industry, arrange a free 30-minute discovery call with one of our marketing experts.
The Best Product Marketing KPIs to Track
Product marketing can refer to either launching a new product or a long-term strategy. KPIs will be different for each situation.
We will highlight two short-term product marketing KPIs:
- Bounce rate
- Pages/actions/clicks per session
Bounce rate is a metric that measures the percentage of visitors who leave a website after only viewing one page. A high bounce rate is generally indicative of a poor user experience, as it means that users are not finding what they’re looking for on your site.
As a short-term KPI, it should prompt you to immediately investigate the issue. It could be that your customers are finding exactly what they need on their first click; however, if they are not proceeding to checkout/converting, it could indicate a serious problem with your site’s UX.
Are your calls to action not strong enough? Is your “add to broken” button broken? Any issues relating to the bounce rate being high is especially important for eCommerce.
Pages/Actions/Clicks per Session
A session starts when an active user lands on your website and finishes when 30 minutes have elapsed. In general, most users will not spend more than 30 minutes on your website, but if they leave and come back within that 30 minutes, it still counts as one session.
The number of pages a user visits, actions they participate in, or clicks are important KPIs for product marketing. It shows how users are interacting with your website. If there are too few actions, they may not find your products engaging enough. Meanwhile, too many pages, actions or clicks might show users are struggling to navigate your website.
We will look at four long-term KPIs for product marketing:
- Conversion rate
- Average order value
- Customer lifetime value
- Shopping cart abandonment
Conversion rate, or CVR, refers to the percentage of visitors to a website who end up fulfilling a specific action. For eCommerce, the most important CVR would be visitors who make a purchase. In terms of non-eCommerce, filling out a form, sending an email, making a call, or some other desired action can be tracked as CVR.
The CVR can be separated into how you acquired that traffic as well as your most effective channels. For instance, you may have a low conversion rate from your organic traffic – is that due to ranking for the wrong keywords? The same could be said for your paid traffic if the CVR is low. Are you bidding on the wrong keywords?
Your conversion rate is directly related to the quality of your PPC and SEO campaigns; however, it is arguably most connected to your site’s UI & UX (user interface & user experience) design. Your marketing campaigns could be excellent at generating traffic to your site, but if visitors are struggling to use your website, they will not convert.
Average Order Value
Your average order value, or AOV, refers to how much each sale is worth to your business. Although improving your AOV implies that each order is worth more, improvements in AOV are entirely relative and can, thus, be misleading.
For example, if you increase your AOV by 100%, it could still indicate your business is not in profit. If you sell items worth 100 AED and your AOV increases by 100%, you are still only selling 200 AED of products. Meanwhile, if you sell one high-end item – such as a laptop – and encourage users to purchase a carry case with it, this could increase AOV by just 5% and yet still add to your profit.
There are numerous techniques to improve AOV, and they mainly revolve around improving your user experience. Here are some ideas that might help:
- Upsell premium items
- Package deals
- Free shipping
- Loyalty schemes
Discover more about the importance of average order value for eCommerce.
Customer Lifetime Value
Customer lifetime value, or CLV, refers to the total revenue a business can (reasonably) expect from a single customer. In other words, it represents a customer’s total to your business.
CLV is calculated by taking:
- The average value of a purchase and multiplying it by;
- The number of purchases every year, then multiplying again by;
- The number of years a customer has used your website.
In theory, if you have an accurate CLV, you can understand how much you should spend on acquiring new customers. If the cost to acquire a customer was £50 (even if they only spend £40 initially), then the £500 a year they will spend will make that acquisition cost worth every penny!
Shopping Cart Abandonment
Having a high shopping cart abandonment rate shows that you are receiving the demand for your products and services but you are failing to convert willing customers. This could be because you are…
- Not allowing users to edit their cart easily
- Not providing a guest check-out area
- Not indicating to the customer that they have updated their basket
- Failing to show the total cost on the first page
- Lacking multiple payment options
- Asking for too much information
Keeping your shopping cart simple, easy to navigate, and easy to edit will help decrease your shopping cart abandonment rate. Check out our guide to shopping cart UX to delve further into this common problem!
Get in Touch with Digital Marketing Experts
KPIs help us make data-driven decisions. That’s why we are obsessed with them here at Trafiki! If you are unsure about what KPIs you should track and how to make the best use of them, then book a free 30-minute discovery session and speak to our digital marketing experts in Dubai.