Strategies eCommerce Companies Can Employ Today to Increase KPI Performance
Previously, we wrote about several of the most important Key Performance Indicators that eCommerce companies should monitor to measure their success.
In this follow-up post, we look at strategies eCommerce companies can employ today to improve their KPI performance.
Revenue and sales KPIs
Increase Average Order Value (AOV): Once you have engaged with a customer and they are actively placing an order, you can employ several techniques to increase the AOV, such as offering bundling discounts, cross-selling, and upselling at checkout.
Improve Conversion Rate: Low conversion rates (the number of visitors who convert to sales) generally point to a poor website experience. Ways to enhance your website experience are to optimize your product pages with better images, how-to videos, user reviews, add-on and upsell products, and compelling descriptions. Other strategies include:
- Run limited-time promotions, run flash sales, or offer discounts when purchasing multiple quantities of the same item
- Simplify the checkout process
- Offer guest checkout options
Customer acquisition and retention KPIs
Lower Customer Acquisition Cost (CAC) with retargeting: Acquiring new customers is more expensive than retaining existing ones. Run retargeting campaigns for visitors who abandoned their carts or browsed without purchasing to entice previous visitors to return to your site and see what’s new.
Employ email and SMS marketing to reduce churn: Related to CAC is churn, which refers to losing existing customers to your competitors. Some techniques to help prevent churn are to use abandoned cart reminders, post-purchase engagement emails, and loyalty discounts to re-engage with previous customers. Other strategies include:
- Improve post-purchase sales support
- Offer incentives for repeat purchases
- Send personalized recommendations to encourage retention
Operational and efficiency KPIs
Reduce Cart Abandonment Rate (CAR): Cart abandonment refers to visitors who add products to their shopping cart but never complete the purchase. High cart abandonment indicates friction during the checkout process. Techniques to reduce CAR include offering free shipping thresholds, showing total costs upfront, and streamlining the checkout process.
Increasing the Inventory Turnover Ratio (ITR): A low ITR usually indicates a tendency to overstock items that are poor sales performers. Increase ITR by identifying slow-moving products and creating special promotions to sell excess inventory quickly.
Speed Up Fulfillment: Customers are expecting faster product delivery. To help reduce the time between order placement and delivery, consider partnering with local fulfillment centers or third-party logistics (3PL) providers.
Profitability and financial health KPIs
Increase Gross Margin: The Gross Margin is a percentage obtained by dividing your revenues less COGS by total revenue. A high percentage indicates you enjoy highly profitable margins. One way to increase your gross margin quickly is by identifying your best-selling products with high margins and focusing on promoting those items.
Improve ROI on marketing spend: Spending money on advertising and marketing should be considered an investment, and that investment should be profitable over time. However, finding the right combination to generate sales is an art and a science. The best way to find out what works and what doesn’t is to start small until you find out what works best for your product. This includes testing different ad creatives, optimizing bidding strategies, and focusing on high-converting channels.
Customer experience and engagement KPIs
Boost NPS and CSAT: Your satisfied customers are your best form of advertising and repeat business. Some ways to boost your NPS and CSAT scores are to improve customer service response times, offer real-time chat support, and proactively address negative feedback.
Reduce Return Rates: Returns represent lost revenue and might indicate low product quality or insufficient information about your product. To minimize returns, enhance your product descriptions, provide accurate sizing guides, and offer better customer support.
By executing these quick strategies now, eCommerce managers can see immediate improvements while setting a strong foundation for long-term success.
Contact the experts at ArcherPoint to learn more about how you can optimize your eCommerce operation and increase sales.