The 12 KPIs of Perfidious Albert's E-Commerce Strategy
Total Sessions Volume (TSV)
Definition
TSV is the total number of sessions over a given period of time for all users. A session starts when a user opens your website and ends 30 minutes after their last interaction. A new session starts if they come back after 30 minutes.
Calculation
The Sessions over time report in Shopify provides this KPI.
Trend Direction
Ideally you should see increasing TSV every month. This shows your website is growing and becoming busier. However, be aware that increasing TSV but also increasing SBR (see below) is not healthy and shows you are attracting disinterested visitors.
Improving
This is the one metric that almost everyone with a website is constantly working on. Improving it involves attracting more visitors using SEO (search engine optimisation), social media, advertising, and word of mouth.
How We Help
We actively monitor TSV as it is key to your success across all other metrics.
Total Visitor Volume (TVV)
Definition
Total Visitor Volume (TVV) is the number of users as opposed to sessions. One user might have many sessions.
Calculation
The Sessions over time report in Shopify provides this KPI (Visitors column).
Trend Direction
Ideally you should see increasing TVV every month. This shows your website is growing and becoming busier.
Improving
As with TSV almost everyone with a website is constantly working on TVV. Improving it involves attracting more visitors using SEO (search engine optimisation), social media, advertising, and word of mouth.
How We Help
We do actively monitor TVV as it is key to your success across all other metrics.
Average Session Duration (ASD)
Definition
Simply the average amount of time each session on your website lasts. This is roughly equivalent to the average time that each user spends on your website. It is a measure of user engagement.
Calculation
The Sessions over time report in Shopify provides this KPI (use the columns button to add Average session duration if it is not shown).
Trend Direction
You should target a healthy ASD (this will vary per website) and aim to trend upwards to meet the target. In general, the longer the average session duration, the better. This indicates that users are engaged and finding value in your product, which can lead to increased user retention and revenue.
Improving
You can improve the time your users spend on your website by enhancing the user experience, offering relevant and interesting content, and optimising functionality
How We Help
ASD is a critical metric for us to monitor, understand, and improve upon on your website. We spend a lot of time analysing and optimising ASD.
Customer Acquisition Cost (CAC)
Definition
Your customer acquisition cost is the amount of money you spend on acquiring new customers (advertising, marketing, sales) divided by the number of new customers acquired.
Calculation
Unfortunately Shopify won’t give you this figure - you will need to do a little book keeping. You will need to know your new customer figures which are part of your Customer Retention Rate (CRR) KPI.
Trend Direction
You should see a decreasing CAC every month. At some point maybe it will bottom out and you will want to see it remain stable.
Improving
Theoretically it is very easy to lower your Customer Acquisition Cost (CAC) - you just improve your Customer Retention Rate (CRR).
How We Help
Your CAC figure will be surprisingly high (for most businesses) and lowering it is a key part of our strategy when working with you.
Store Conversion Rate (CRX)
Definition
The most critical KPI in any e-commerce store is the conversion rate. Put simply it is the percentage of sessions that were converted into sales. Around 2% is the average worldwide but varies enormously across industries. Crucially CRX shows the final part of a long funnel from visitor to sale and the parts in between are equally important.
- Add to Cart Rate (CRA): The % of visitors who place an item in their cart.
- Proceed to Checkout Rate (CRB): The % of CRA who proceed to checkout.
- Proceed to Order Rate (CRC): The % of CRB who place an order.
- Cart to Order Rate (CRD): The % of CRA who place an order.
- Cart Abandonment Rate (CAR): The % of CRA who don’t checkout.
- CRX: The overall % of visitors who end up making a purchase.
Calculation
The Online store conversion over time report in Shopify provides these KPIs.
Trend Direction
CRX should always be rising or at least high and stable.
Improving
A poor CRX is one of the biggest killers of profitability in an e-commerce store. 60% of cart abandonments are due to postage costs. You can improve the time your users spend on your website by enhancing the postage options, delivery options, customer reviews, and using retargeting advertising.
How We Help
CRX is a critical metric for us to monitor, understand, and improve upon on your website. It will almost always be the initial focus of our attention as there is no point in sending more visitors to the website if they are falling away during the checkout process.
Session Bounce Rate (SBR)
Definition
Bounce rate is the percentage of single-page visits on a website. In other words if a visitor opens a website on a particular page (probably from a search engine) and then leaves the website (probably using the back button) without visiting any other page then they have “bounced” off the site.
Calculation
The Sessions over time report in Shopify provides this KPI (use the columns button to add bounce rate if it is not shown).
Trend Direction
You need to be careful to understand your website bounce rate and what affects it. If you are a very sales focused online store and you have a high bounce rate then it means people are not finding what they want on your site. However, if you have lots of blog pages or other information then perhaps people are finding what they want and leaving happy.
Improving
Bounce rate is affected by website speed, content quality and relevance, user experience, and audience targeting. It is a very difficult metric to work with and improve as there are a lot of factors involved.
How We Help
SBR is a critical metric for us to monitor, understand, and improve upon on your website. We spend a lot of time analysing and optimising SBR.
Number of Orders (NOO)
Definition
The number of orders that the store received during the period. An important KPI in its own right, but also used for calculation of other KPIs such as Average Order Value (AOV).
Calculation
The Orders over time report in Shopify provides this KPI.
Trend Direction
It goes without saying and without exception that your NOO KPI should be improving every month, however a small NOO with a larger AOV is probably better than a smaller AOV with a larger NOO. Larger order values are more profitable than larger numbers of orders as the fixed costs around fulfillment, customer service, and packaging remain the same.
Improving
You can improve the number of orders your site gets by increasing Store Conversion Rate (CRX), increasing Customer Retention Rate (CRR), and increasing Total Sessions Volume (TSV).
How We Help
NOO is a critical metric for us to monitor, understand, and improve upon on your website. However, it is not a metric we work on directly - it is a metric we use to measure if a bunch of other metrics around conversion and average order value are actually improving. In other words there is no way to increase NOO without increasing TSV, CRX, and/or CRR.
Overall Sales / Revenue (REV)
Definition
The total sales for the period less discounts, returns, refunds, and postage charges.
Calculation
The Sales over time report in Shopify provides this KPI (use the Net sales column).
Trend Direction
Well now, what is the point if revenue is not going upwards at a satisfying pace! This one is probably more about targets than trends.
Improving
You can improve the overall sales your site achieves by increasing Store Conversion Rate (CRX), increasing Customer Retention Rate (CRR), increasing Average Order Value (AOV), and increasing Total Sessions Volume (TSV).
How We Help
At the end of the day revenue is the only metric that really matters (well, profit is arguably more important than revenue, but to some extent that is a general business metric rather than an e-commerce metric).
Revenue is also one of the options for how we charge for our services - we sometimes charge a fixed price and we sometimes charge a percentage of revenue.
Average Order Value (AOV)
Definition
The average order value is simply Overall Sales (REV) divided by Number of Orders (NOO).
AOV is a critical KPI and arguably one of the most important. A huge amount of e-commerce costs are more or less fixed per order. These include the Customer Acquisition Cost (CAC), merchant transaction fees (i.e. 30c fixed for PayPal), packaging fees (often a €10 order goes in the same box as a €100) order, postage, fulfilment costs, customer service costs, etc. If every order you send has €20 in fixed costs then no matter how many €10 sales you get you will always make a loss.
Calculation
The Average order value over time report in Shopify provides this KPI.
Trend Direction
If your site sells a single e-book for €12 that will be your AOV, and if your site sells garden sheds for €2500 then your AOV will always be €2500. However for most businesses AOV is very variable and you should aim to get it higher and higher all the time. It will eventually become a case of diminishing returns - and that is OK - see how high you can go and then spend your time elsewhere.
Improving
AOV is one of the easiest metrics to understand as we are surrounded by strategies to increase it, even in the local supermarket. Upsells (if you are buying that then you might like this), Cross-Sells (if you are buying that you might need this), Bundles (buy a six pack and save), Volume discounts (buy 3, pay for 2), are some strategies to increase AOV.
How We Help
AOV is a critical metric for us to monitor, understand, and improve upon on your website. It will almost always be a core focus of our work on your website.
Customer Retention Rate (CRR)
Definition
We define this as the number of orders placed by returning customers over the number of orders placed by first time customers as a percentage. So a 20% CRR would mean that 20% of the orders during the period were at least the 2nd order that customer had ever placed.
This metric doesn’t have a time limit attached to it - a returning customer from 5 years ago is the same as a returning customer from last month.
Calculation
The First-time vs returning customer sales report in Shopify provides these KPIs (a little calculation is required).
Trend Direction
Finding a new customer is very expensive - see Customer Acquisition Costs (CAC), Getting an old customer to come back is often a lot less expensive. If they are on your mailing list in Klaviyo then the cost might be almost nothing - just a reminder email well timed.
Improving
The factors that make a customer come back time and time again include customer satisfaction, product quality, customer service, trust and credibility, and convenience.
How We Help
CRR is a longer game than most of the metrics we work on, but it is one of the most important. We will work with you to set-up customer satisfaction surveys, gain customer reviews, and to build your customer mailing list.
Customer Satisfaction Score (CSS)
Definition
Your Customer Satisfaction Score is the number of 4 or 5 star reviews or feedback you have received divided by the total number of respondents expressed as a percentage. So a CSS of 90% means that 1 in every 10 people scored you 3 or lower, the other 9 or 90% scored you 4 or higher.
Calculation
You need to ask customers for reviews through some mechanism such as Google Reviews, Google Forms, TrustPilot, etc. Then a simple spreadhseet will crunch the numbers.
Trend Direction
Personally we like to see CSS hit 100% and stay there. In most e-commerce businesses getting a 5 star review is just a matter of selling a quality product and fulfilling it in a competent way. If you can’t manage that consistently the business is in trouble.
Improving
Be nice, be competent, keep your promises.
How We Help
We can help with great emails, an amazing website, and automated customer service that works.
