2 ways to avoid vanity metrics in eCommerce

Although eCommerce websites come in different shapes and sizes, there are very real, specific KPIs that every eCommerce website, regardless of size, should be setting and monitoring.

But you've to be extremely careful.

Ecommerce KPIs can be both a blessing and a curse.

Most eCommerce marketers fail to accomplish their goals on time not because they lack skills and knowledge but because they lose sight of what to track precisely.

Dozens of vanity KPIs can be more distracting than worthwhile.

Fortunately, there are two things that can help you determine the KPIs you need to monitor on your eCommerce businesses.

Be clear about your business goal(s)

Some people like to call them brand objectives.

You see, KPIs on their own don’t tell the full story of how your site is performing. On their own, they are just numbers and percentages that mean nothing.

Every website you see out there also has these numbers. But what makes other eCommerce websites perform better than others is because they know which KPIs are relevant in their business environment.

In other words, your business goals inform the type of KPIs you should set and monitor for your eCommerce site. KPIs don’t give context to your eCommerce business, but it’s the other way round.

To give you a clear understanding of what I mean by business goals, here are three objectives that an eCommerce business can have:

• Increasing number of online sale?
• Driving more traffic to the site? (we usually don’t advise this as a business goal)
• Growing email newsletter list?

It’s wise to take a moment to figure out precisely what your goals are before you start to track every KPI under the sun.

Look for these four Character traits

Once you have a clear understanding of what you’re trying to achieve as a business, the next thing is to look for certain traits in a KPI.

In other words, you have to determine if a KPI is useful or not by looking for the following character traits in it:

• Impact the bottom line: KPIs should relate to the bottom-line and be crucial to achieving your business goal.
• Can be measured accurately: The best KPIs are not complicated. They are simple, straightforward, and easily calculated. You need to track the data required to create an indicator accurately. Useful KPIs are well-defined and quantifiable.
• Timely: To be useful, you need access to real-time KPI results so you can implement improvements. In some instances, you can even combine old and real-time data to track trends.
• Actionable: Well-crafted KPIs provide a road map to success. A good KPI will help you understand the improvements you need to make on your site.

Determining which KPIs to evaluate represents the most significant single issue for eCommerce businesses in obtaining real value from analytics and the daunting array of reports.

Over the years, we’ve noticed that reports’ creation is often not the problem; the challenge lies in interpreting those reports and extracting the minutiae with real meaning.