There is nothing more important of your Web Analytics success than identifying the right Key Performance Indicators for your business. Learn eight simple rules you can follow.
|Scooped by Hassan Fouroozesh|
Metrics are important to use at any business, it helps businesses to reach their goals and any goals has to be measurable. You cannot optimize what you do not measure. This review will explain and illustrate some of the important key factors that Avinash have introduced in the article and I’ll also add a few more points and new metrics related to what he has introduced.
Avinash said that a conversion rate metric is a great start to begin which is highly true. Conversion rate is focused on increasing the outcomes, it is a highly objective and measurable technique. Following this metric method allows having a guide what a good design is. If you change your e-shopping design and it increases the conversion rate then this tells us the new updated design is more favourable for the business. Conversion rates can be used to measure registrations, adding an item to cart, download content.
Average order Value (AOV)
Assume acquiring customers costs you £50 per customer and the customer buys an average of £265 and you would make £20 a profit. Then this is a positive thing to spend £50 to acquire every new customer. Different sources of traffics may produce a wide different number of AOV, so it is helpful you to evaluate which traffics to focus on most to attract.
Avinash did not provide this KPI. Some e-commerce sites do not bother to measure abandonment cart. Understanding why customer’s leaves their items in cart and then abandon the website is an important indication that there is something wrong. Perhaps, the delivery cost is high, or the ordering is frustrating. Knowing why customers abandon their shopping carts is an important step to tackle the problem.
This is related to conversion rate. A/B testing is you will have two (or more than two) versions of an element [A and B] and determines which version is better; the both versions would be subject for experimentation simultaneously. For example, assume that currently the ‘buy’ button colour on your website is red. We will create two elements to tests; version A, the ‘Buy’ button colour is changed to yellow. Version B, the ‘Buy’ button is changed to blue. The test will split the traffics into two, half of the users will receive version A element and the second half of users would get version B element. Then the results will come out that version A improved conversion by +10% but version B decreased the conversion by -15%. Therefore it is better to change the colour from red to yellow.
Net Promoter Score (NPS)
Avinash introduced “Visitor Loyalty & Visitor Recency” but I think NPS is a easier to start with. NPS is a questionnaire style but it only asks a customer one simple question that is “How likely is it that you would recommend [your service] to a friend (or colleague)?” Customers would respond on 0 to 10 point rating basis. 0-10 scale is categorized into three parts. Score 0-6 are Detractors customers, implies that are unhappy customers and can damage your brand. 7-8 score are Passives customers, implies are satisfied but not unenthusiastic enough to promote your service. Finally, those who score 9-10 known as Promoters, implies that they are enthusiastic and would refer your service to others.