There’s hundreds of ecommerce KPIs that you could be focusing on, and even more articles telling you which ones you should be setting as a goal. So we thought we’d break them down into different areas to help get you decide for yourself which eCommerce KPIs are most important to your business, goals & strategies in a short series of blogs
First up in this article we’re exploring one of the most overlooked areas, customer satisfaction. Get this area of your strategy right and you’ll enjoy increased conversion rates, ROI & retention rates, as well as reducing your CPL. That’s four pretty important reasons for focussing on this ecommerce KPI segment!
Let’s take a dive into the three key metrics that will give you the data insights you need to build a robust and successful customer satisfaction strategy
Ecommerce KPI #1 Abandoned basket rate (ABR)
Every year ecommerce brands lose on average £15 billion ($18 billion) in sales revenue due to abandoned baskets. However, the good news is unlike a customer walking out of a shop, there are ways to get them back. Plus, you will always have data insights available to help create a strategy to combat this.
The formulae for calculating your abandoned basket rate (sometimes called shopping cart abandonment rate, SCAR) is total number of completed transactions / total number of shopping carts × 100.
One thing to remember when looking at ABR is there can be many reasons why people don’t complete their purchase, making it easy to create narratives without evidence. Because of this you need to stay focussed on the available data insights from your current strategies and channels that will have the answer.
Get started with your abandoned basket strategy
With win back email open rates as high as 41%, introducing an ABR strategy could be the perfect way to increase revenue. Take a look at some quick tips below:
- Get the right automation tools in place to make implementing and continuing your strategy simple.
- Understand why people are leaving. Some of these answers will be available in Google Analytics, but you may also have to deploy other tactics and A/B tests to understand where the issues are.
- Know what data you have available, where is it coming from and what is important to track?
- Create a report dashboard to help display data, or add a section to your Ecommerce management KPIs dashboard
- Have a plan to monitor and optimise the strategy performance
Ecommerce KPI #2 Reviews/ratings metrics
With 95% of customers reading online reviews before making a purchase, it’s pretty safe to say that these days reviews are pretty important! They increase trust between your company and the customers, and they can be the decision maker for the final purchase.
Some key metrics to measure are:
- Customer review engagement rate – 68% of customers don’t trust a 5-star rating unless there are a high quantity of reviews which means it’s important to have a customer review strategy in place. If you’re using a platform that sends requests to customers then it’s important to measure how many requests you send VS how many you get back. This will help you forecast your future review performance and set reasonable goals.
- Overall review rating – 94% of customers say reviews have made them avoid a business, whereas positive reviews can increase customer spending by 31%. It’s important to monitor the rating to get an understanding of your performance and the impact it may have on new customers.
- Your reply rate & time – Whether your reviews are good or bad, replying to your customers who took the time to leave a review is important. 57% of customers wouldn’t use a business that doesn’t respond to reviews at all and 53% expect brands to respond to negative reviews within a week.
- Customer sentiment – As well as looking at your overall review rating, drilling down into them will help you to understand individual product performance. You’ll be able to identify your star products and where there’s room for improvement which will help inform your marketing and business strategy.
Ready to start your customer review strategy? Check out some tips below:
- Paid or free tool? Research wisely into which platform to use, there are free tools available but remember to think about their credibility with your customers.
- What will you reply to customers? Customer service templates to reply to reviews can be a good idea, remember to leave spaces for your team to personalise each message.
- Who gets a reply? Reply to ALL reviews, that means the good, the bad and the ugly!
- How are you going to implement the strategy? Set an internal process for managing reviews, thinking about how you source your customer data right through to who is managing which element and when a review needs to get escalated, and to who.
- What about non-verified reviews from other channels? Be aware of review channels such as Google, Facebook and Trust Pilot that don’t need validation to prove they are a customer.
Ecommerce KPI #3 Rate of product returns
These days returns are part of the shopping process with the average return rate being between 20%-30%. Unfortunately for retailers they can be a costly one.,not only do many customers prefer (and expect) free returns, but a good returns experience is also a key motivator when it comes to customer loyalty. On top of that, some third-party online retailers such as Amazon can actually kick you off their platform if your return rate exceeds a certain amount.
But, it’s not all doom and gloom. Valuable data can be gathered from your returns process and turn it into an opportunity to learn why your customers are unsatisfied and make changes. To do this you first need to include a way to get the information, with the most common being a survey in the returns process to gather data on why people are returning the item. By using a drop-down option you’ll be able to keep the data clean and provide better data insights.
Once you have the data you will be able to analyse it for patterns or quick wins that will influence your marketing and business strategy. For example, is it the same product getting frequently returned or across all product lines? Do customers have similar reasons for returning your products?
A final note on this Ecommerce KPI segment
Focussing on any of these metrics will provide you with the opportunity to increase conversion rates, ROI and retention rates, as well as reducing your CPL. Another benefit to working on customer satisfaction metrics is that the strategies you need to implement are usually relatively low cost. That means by focussing on this Ecommerce KPI segment, you’ll help hit your business goals without a big price tag attached. Remember, once you’ve chosen the metrics you want to focus on, if possible, it’s important to build a data dashboard to easily identify trends, opportunities and issues which need attention.