Every business has its own key performance indicators (KPIs) that indicate to leaders and management how close the company is to achieving its goals. KPIs vary from company to company, but many are similar across industries. Two Internet retailers selling different products – SCUBA equipment and houseware, for example – will be equally concerned with increasing online payments. Below are the three most important KPIs for online stores and what business leaders and marketers can do to improve them:
1. Bounce Rate: Your goal is for visitors to spend as much time on your site as is necessary to complete a purchase. Unfortunately, many leave after looking at only one page. The exact percentage of these users is what is known as your online store’s bounce rate, and you want it to be as low as possible. After all, spending more time on your site increases the likelihood an offhand browser will become a paying customer.
2. Add-to-Cart Rates: Once visitors have perused your online store, the next step is for them to add an item to their virtual shopping cart. Businesses can learn a few things from low add-to-cart rates, Practical Ecommerce wrote. When compared to the percentage of unique versus recurring visitors your site has, low rates could indicate an issue with your pricing or the product itself.
3. Cart Completion and Cart Abandonment: Discarded shopping carts are a major concern for most online sellers. Consumers begin but don’t finish the checkout process for numerous reasons. Some want a quick peek at shipping costs, while others may not be sure whether they want the item or not. No matter what the cause, every online store should work to increase their percentage of completed orders.
Raising Your KPIs
Each of these indicators directly relates to your conversions. Improving them means your business should see a greater number of e-commerce payments. They each have their own specifics, but paying particular attention to your website’s navigation, loading times and marketing data can help you improve the status of all three.
Navigation: If viewers aren’t staying on your website, it may be because they’re unsure how to proceed. Clear navigation shows people how to accomplish their own objectives on your website, whether that’s finding more information about your product, learning about available payment solutions, or completing the checkout process. They need clear directives and a logical hierarchy to understand how to proceed.
This extends into the checkout process. Your visitors need to progress naturally from one stage to another, inputting payment and billing information smoothly. In addition, your site should provide a way for users to return to a previous stage and edit information.
Loading time: Faster Internet speed has raised consumer expectations with regard to how long a website should take to load. Gone are the days of waiting five minutes for one JPEG to appear – as data from Kissmetrics indicated. A one second delay in loading time can damage conversions by up to 7 percent.
So how long is too long? According to Kissmetrics, 47 percent of online shoppers expect a page to load in fewer than three seconds. Fifty-three percent said a quick-loading page was an important factor in deciding whether or not they would return to a website. Meanwhile, 79 percent stated they were less likely to buy from an online store that experienced performance issues.
Therefore, businesses should do all they can to optimize their websites for faster load times. They should never sacrifice speed for fancy animations or unnecessarily large product images. Instead, they need layouts that appear quickly and are easy to grasp, while still being attractive and on brand.
Marketing data: Knowing which channels bring in the most conversions helps businesses understand which of their marketing campaigns are effective and which are not, Practical Ecommerce said. According to the website, insight by marketing company Monetate found that approximately 11 percent of consumers who came to a retailer’s site directly added an item to their cart. Slightly fewer – about 10 percent – came through email marketing. Search and social had the lowest rates at 8 percent and 5 percent. These numbers may be different for your business, but analyzing them points to where you should be focusing your marketing efforts. For example, if your add-to-cart rates from social media also hover around 5 percent, it’s probably more beneficial for your business to focus on getting conversions from another channel. Social media marketing can drive customer engagement instead.
Measuring your website’s bounce, add-to-cart and cart abandonment rates gives you a good look at how consumers interact with your business. Taking steps to improve these metrics through clear navigation, reduced loading times, and use of marketing data should also increase conversions and lead to a successful online business.
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