We’ve said it before, and we’ll say it again: being efficient isn’t about working harder, it’s about working smarter. We believe that life can be pretty intimidating for vertically integrated online stores & building brand recognition like the biggies of the world is quite a dream. But we also believe that the beauty of the internet is that you can compete. Compete fair & square. We’ve recently completed our first year at PosterGully & when it comes to customer conversion & sales, connecting with our potential customers & describing our products persuasively has been our key weapon.
Now, coming to how a 6 member team scaled to 10K orders with more than a month to our first anniversary. It’s simple. We sell with emotion & justify with logic. And how we do that? We keep a very strict eye on our Key Performing Indicators (KPIs). Monitoring them has helped us identify progress towards sales, marketing & customer service goals. A simple example of this may be a goal to increase site traffic by 20% in the next month. On the basis of this goal, a performance indicator might be the no. of unique visitors the site receives daily or which sources drives visitors (SEO, PPC, Brand advertising, YouTube video etc.)
See, KPIs can & will differ for each of online retailer’s goals, whether those are related to improving customer service, boosting transactions/day or streamlining the supply chain. 3 of our goals that worked significantly well for us in the last quarter were:
Goal 1: Increase sales 30% from Mar-May ’13. KPIs included conversion rate, daily sales & site traffic
Goal 2: Increase conversion rate by 1 %. KPIs included shipping rate trends, price trends, cart abandonment rate & daily conversions.
Goal 3: Reduce after sales calls by half in the period from Mar-Sep ’13. KPIs include service call classification, page visited just before call, operational errors, people resources.
The initial growth was slow for us because the focus was more on everyday transactions rather than long term sustainable growth, but since the focus shifted to monitoring KPIs, the results were visible, clear & long lasting.
Here are some common KPIs we constantly refer to for gauging the health of our business. Just remember these worked for us & might/might not work for some other online retailer. But what is important is to set goals and select KPIs, monitoring which should become an everyday exercise. KPIs SHOULD DRIVE ACTIONS.
Sales Key Performance Indicators:
- Daily Sales
- Average order size
- Cart abandonment rate
- Competitive pricing
- Average margin
- Conversion rate
- New customer orders versus returning customer sales
- Our share of market
- Product affinity (products purchased together)
- Product relationship (products viewed consecutively)
- Stock levels
Marketing Key Performance Indicators:
- Daily Traffic
- Unique visitors vs. returning visitors
- On site time
- Page views/visit
- Traffic sources
- Day part monitoring
- Newsletter subscription growth
- Chat sessions initiated
- Facebook, Twitter followers
- Number & Quality of product reviews
- Brand advertising click-through rates
- Affiliate Performance
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