Essential Business KPIs for Online Stores & Tracking Them

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Essential Business KPIs for Online Stores & How to Track Them Like a Pro

22 min read

In the world of business, data is king. However, navigating this massive amount of information can be overwhelming.

Enter key performance indicators, or KPIs — the beacon that guides you through the stormy waters of data to the sunny skies of valuable insights for your business.

One of the most crucial aspects of ensuring business continuity is having a clear understanding of your business growth KPIs. This can help you develop better strategies, make more informed decisions, and ensure your business鈥檚 sustainable growth.

So, what exactly are KPIs in business, and how can they help you focus on what is most important for the success of your venture? Dive into this post to learn about essential key performance indicators for online stores and how to track them like a professional.

Understanding KPIs in Business

In a business landscape where competition is fierce and margins are thin, a keen understanding of business KPIs (key performance indicators) can spell the difference between success and failure.

So, what is KPI in business? Essentially, KPIs are measurable values that can be used to assess an organization鈥檚 success in meeting various business objectives. They come in many forms — from measuring revenue growth and customer retention to tracking employee performance and productivity.

What Are KPIs?

At its core, KPI, meaning in business, is about measurement — they鈥檙e the critical (key) indicators of progress toward an intended result. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision-making, and help focus attention on what matters most.

Different Types of KPIs

When it comes to measuring business performance, there are various categories that KPIs can fall into. These categories help organizations track and evaluate different aspects of their operations, such as financial performance, customer satisfaction, operational efficiency, and employee productivity.

Here are some common KPIs that many businesses track:

Financial KPIs: these measure your business鈥檚 financial health and performance, such as revenue growth, profit margin, and return on investment.
Customer KPIs: these track how well you are serving your customers and their satisfaction levels with your products or services — for example, customer satisfaction scores, retention rates, and net promoter scores.
Operational KPIs: these measure the efficiency and effectiveness of your business operations, such as inventory turnover and employee productivity.
Employee KPIs: these focus on individual and team performance, such as sales targets and customer service ratings.

Why Businesses Need KPIs

Imagine navigating a ship without a compass. That鈥檚 a business without KPIs! As a business owner, you need to track progress, forecast the future, and make decisions with confidence. KPIs are the compass that helps you steer your ship in the right direction.

Benefits of tracking KPIs:

Performance tracking: By defining and tracking KPIs, you can monitor your business鈥檚 performance in real-time and make necessary adjustments to stay on course.
Goal setting: KPIs provide a benchmark for setting achievable goals and measuring success.
Data-driven decision-making: Instead of relying on guesswork, using KPIs allows you to make data-driven decisions that can lead to better outcomes.
Identify areas for improvement: By analyzing your KPIs, you can identify areas of your business that may need improvement and take corrective action.

For an online store, tracking orders can guide decisions about inventory management and marketing strategies

Must-Have KPIs for Online Stores

As you can see, there are many different types of business KPIs and lots of metrics you can track. This may sound overwhelming at first and make you wonder what you should be focusing on in your online store. The thing is, depending on your business, the KPIs you choose to track will vary.

However, if you鈥檙e an online store owner, there are specific KPIs that can make a significant impact on your business鈥檚 bottom line.

So, what metrics are the most important for your online store? Read on to find out.

Tracking Traffic

Getting more visitors to your store starts with understanding where your traffic is coming from. By tracking website traffic, you can identify which channels are driving the most visitors and adjust your marketing strategy accordingly.

Here鈥檚 what you need to pay close attention to as an online store owner:

Number of online store visitors
How much time people spend in your online store
How many of the visitors are returning
What device they use to browse your store

That helps you track your store鈥檚 traffic and adjust your marketing strategy accordingly. For example, if most of your traffic comes from mobile devices, it may be worthwhile to optimize your website for mobile users.

Tracking Orders and Conversions

For an online store, orders are the lifeblood of your business. Tracking orders can help you understand your customers鈥� purchasing behavior and make informed decisions to drive more sales.

Here鈥檚 what you need to track when it comes to orders:

The total number of orders placed and the revenue
Conversion rate (number of completed purchases/total visitors)
Number of repeat orders
How many items people usually buy
How many items you sold during a specific period.

Once you figure out what factors contribute to bigger orders, you can use those strategies to encourage customers to buy again and make larger orders. For example, if you notice that orders spiked after you offered free shipping for a certain amount spent, you can use that tactic again to boost sales.

Tracking Finance

Track your financial flows to understand how well your business is doing and gain insights for the future.

Here are the accounting metrics you need to have an eye on as an online store owner:

Your store revenue
Expenses
Average order value, i.e., how much money you make per order
Average revenue per customer and visitor, i.e., how much money each customer brings you.

Tracking these numbers is essential to understanding your store鈥檚 financial health and making improvements. For example, if your average order value is low, you can focus on upselling or cross-selling strategies to increase revenue per order.

Tracking Marketing Metrics

Customers access your store through multiple channels, including ads, emails, social media, and more. By pinpointing the sources that have a greater impact on your orders, you can optimize your marketing strategies effectively.

Here are the marketing metrics you should track in your online store:

Performance of your marketing campaigns, such as click-through rates and conversion rates
Where your orders are coming from (i.e., order sources).

How to Track Your Online Store Performance

While there are various tools for tracking your business KPIs, it鈥檚 much easier to track your online store performance where you manage your business.

If you sell online using the 黑料门 by Lightspeed ecommerce platform, not only do you get a powerful online store, but you also get valuable insights into its performance directly where you manage it all — in your 黑料门 admin.

Reports and analytics section in the 黑料门 admin

With 黑料门, you can access real-time reports and analytics to monitor your online store鈥檚 performance, including sales numbers and customer data. You can actually track and measure all the critical online store KPIs we discussed above!

On the page, you can get a comprehensive understanding of your store鈥檚 performance through key metrics: visitors, orders, conversions, and revenue, which can serve as practical business KPI examples:

The Visitors section lets you keep an eye on store traffic, how long visitors stay in your store, what devices they use, and if they return.
The Conversions section shows you the percentage of visitors who actually make a purchase.
The Orders section lets you gain insights into the number of orders made, the revenue generated, new versus repeat orders, and the average number of items sold during a certain period.
The Revenue section lets you stay updated on your financial flows. It provides valuable insights into your store revenue, expenses, average order value, and average revenue per customer and visitor.
There is also a Marketing section that gives you insights into the performance of your marketing campaigns, order sources, and the marketing strategies you鈥檝e implemented in your store that have led visitors to make a purchase.

You鈥檒l find line charts to analyze and forecast trends over different periods, tables for a detailed data examination, and interactive pie charts for a quick and insightful overview of key metrics.

Simply click on the dropdown and choose the time interval you want to customize the reports. To get more insights, you can choose a period for comparison. This lets you view how the metrics of the current period have changed compared to a period from the past.

Choosing a period for comparison

Benefits of Tracking Your Store Performance with 黑料门

There are various tools available for measuring your business metrics, but using 黑料门鈥檚 reports has its unique advantages:

With 黑料门, you can track all the essential metrics in one place rather than using multiple tools to gather different types of data.
黑料门鈥檚 reports are automatically updated and synced with your store鈥檚 data, saving you time and effort.
The reports are easy to read and understand, with colorful charts and graphs that help visualize your store鈥檚 performance.
You have the flexibility to choose any period for each type of report and compare it with the same period from the previous week, month, or year.
Each metric brings a range of specific parameters that help you dive deeper into your store鈥檚 performance.
To stay in the loop, you have the option to receive weekly emails from 黑料门. These emails will not only provide you with your weekly stats but also offer some helpful advice on how to grow your business.

With 黑料门, you can use the trends, statistics, and parameters the Reports provide to refine your strategies and ensure that your business is on the right track. So why wait? Start tracking your online store鈥檚 performance with 黑料门 today and use the valuable insights to boost your sales, improve your marketing strategies, and reach new heights in your business.

The Visitors section in 黑料门鈥檚 reports

How to Start Using Reports with 黑料门

When it comes to running a successful online store, knowledge is power, and 黑料门 provides you with all the necessary tools to track and understand your store鈥檚 performance.

To start using 黑料门鈥檚 reports, follow these simple steps:

.
Open your 黑料门 admin and click on the page.
Choose the type of report you want to view, such as visitors or orders.
Customize the date range and other parameters to get a more detailed report.

Use the insights from the reports to make informed decisions for your business, and don鈥檛 forget to check in regularly and track your progress over time.

As an online store owner, it鈥檚 crucial to clearly understand your financial and marketing metrics to make informed decisions for your business. With 黑料门鈥檚 user-friendly reports, you can easily track and analyze these metrics in one convenient place.

To learn more about using the Reports tool in your 黑料门 store, read this .

How To Make the Most Out of 黑料门鈥檚 Reports

A great benefit of using 黑料门鈥檚 reports is that they unlock valuable insights into your online store data that would otherwise be challenging or even impossible to track with other tools. Here are some of the metrics you can track:

Metrics that help you understand the success and long-term sustainability of your business, such as revenue per customer or visitor
Metrics related to your 黑料门 store expenses
Metrics related to conversion by customer segments, such as new vs. returning visitors or desktop vs. mobile visitors.

Let鈥檚 explore a few examples showcasing how a deep understanding of these metrics empowers you to make informed decisions that drive business growth and improvement.

Managing Advertising Campaigns

Revenue per visitor helps you plan your advertising campaign and ensures you don鈥檛 overspend.

Checking average revenue per visitor in 黑料门鈥檚 reports

Say, your revenue per visitor is $1. Knowing this information, you can adjust your marketing campaigns accordingly to spend less than a dollar to attract a visitor. This way, you鈥檒l increase your profits in the long run.

Sales sources give you a peek into which marketing channels are bringing in the most visitors and which ones aren鈥檛 performing well. This information helps you decide which channels to drop and where to allocate more resources.

黑料门鈥檚 Marketing reports provide you with an easy-to-understand overview of your sales sources

Learn more about tracking sales sources in your 黑料门 store.

Understanding Profits vs. Expenses

Metrics like revenue per customer help you plan future income. For example, if you know how many new customers you鈥檙e going to attract this month, you can calculate how much money you鈥檒l make this month. This is helpful as it allows you to set realistic goals and track your progress towards them.

There are other metrics that help you accurately calculate your expenses and estimate future profits.

For example, in your 黑料门 store, you have the option to specify the cost of goods — the cost price, which is essential for calculating store expenses.

You also get a detailed breakdown of your store spending, giving you insights into specific categories like shipping costs and the overall expenses involved in creating, preparing, and selling a product.

Targeting High-Performing Segments

When it comes to conversions by segments, like new vs. returning visitors, you can identify the segments with high conversion rates and focus on driving more people into those segments. Similarly, you can pinpoint the segments with low conversion rates and make improvements accordingly.

Comparing new vs. returning customers

For instance, you鈥檝e noticed a remarkably high conversion rate for orders among visitors who have previously visited the store. To maximize this opportunity, you could consider launching remarketing campaigns on Facebook to bring back visitors who have already shown interest but haven鈥檛 made a purchase yet.

Optimizing Website Experience

Metrics related to conversions by segments also help you identify areas for website optimization. Take, for example, desktop vs. mobile conversions. If you observe low conversion rates on mobile, it鈥檚 a clear indication that you need to work on improving the design of your website for mobile users.

Metrics such as visitors by country and language provide insights into your audience鈥檚 locations and preferred browser languages. Leveraging this data, you can offer country-specific shipping options or localize your website to better resonate with your audience.

You can also track orders by shipping method and payment option, providing a snapshot of your customers鈥� preferred choices. This insight helps you determine whether it鈥檚 time to phase out the less popular options.

Analyzing Product Trends

The Product sales and stock overview report gives you a handy summary of what items have been sold in a specific timeframe and their current stock levels.

By comparing these numbers to the previous period, you can spot sales trends for each product. This helps identify which products should be discounted or stocked up during peak seasons.

A Product Sales and Stock Overview report in 黑料门 admin

Analyzing Your Sales Funnel

The Checkout process steps in the Conversion report show you how many customers finish each step of your store鈥檚 checkout. This helps you see where buyers leave their carts and lets you tweak things to close more sales.

For example, if lots of shoppers drop off at the shipping step, you could try offering free shipping or a faster delivery option.

Best Practices for Tracking and Measuring KPIs

In a world where data is king, your business鈥檚 ability to understand and use different KPIs will be a massive part of your success. So always keep an eye on those numbers because they all tell a story — the story of your business鈥檚 past, present, and, potentially, future.

To get the most out of measuring your business KPIs, here are some best practices to keep in mind:

Selecting the Right KPIs

Wrong KPIs mean the wrong direction. So, how do you pick the right ones? It鈥檚 about what鈥檚 vital for your business success. Here are some tips:

Align with your business objectives: Choose KPIs that align with your business goals and long-term strategy.
Keep it simple: Don鈥檛 get weighed down by too many KPIs. Focus on the essential ones that truly measure success.
Be relevant: Ensure your KPIs are meaningful and relevant to your business. Don鈥檛 just track something because it鈥檚 easy.
Monitor trends: Look beyond single data points and track trends over time to see how your performance is changing.

With a vast range of KPIs available, it can be overwhelming to select the right ones for your business. But remember, what matters most is picking the ones that align with your specific business goals and objectives. 黑料门 checks all these boxes by providing easy-to-use reports that track your most important KPIs.

Tracking KPIs

Once you have identified the right KPIs for your business, it鈥檚 essential to track them consistently. Here are some tips for effective tracking:

Set a frequency: Decide how often you will track your KPIs — daily, weekly, monthly, etc.
Use technology: Consider using software or tools to track your KPIs automatically and analyze them in real time.
Visualize the data: Create easy-to-digest visualizations of your KPI data, such as graphs or charts, to quickly understand trends and patterns.
Track against targets: Set specific targets for each KPI and track progress towards those targets.

In that regard, using 黑料门鈥檚 built-in reports is just what you need as an online seller: a clear, concise way to track your progress and measure success against your long-term strategy.

Wrap-Up

Congrats, now you know 鈥嬧€媓ow to use KPIs to measure performance! Keep in mind, though, that business KPIs are a compass, not a map. They guide you, but your strategy is what gets you to your destination — business success.

黑料门 is your partner in navigating through the waters of ecommerce. With reports by 黑料门, you can track, analyze, and use those insights to boost your business forward.

Sign up for 黑料门 and seamlessly migrate your existing store. You鈥檒l love managing an online store that keeps you informed about its performance at all times.

You can also take advantage of 黑料门鈥檚 other features, such as inventory, order, and staff management, and marketing tools — everything that simplifies the life of a busy business owner. Plus, you can sync your 黑料门 store with social media and marketplaces to sell on Facebook, Amazon, and more.

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About the author

Anastasia Prokofieva is a content writer at 黑料门. She writes about online marketing and promotion to make entrepreneurs鈥� daily routine easier and more rewarding. She also has a soft spot for cats, chocolate, and making kombucha at home.