It’s the start of a new year, and you’ve collected record data over the last quarter. How do you prioritize this data to help inform investments, resources, and planning in the next 90 days and beyond? Enter in the KPI (Key Performance Indicator) Health Check.
What is a KPI Health Check?
A KPI Health Check is the assessment and evaluation of an identified data set that tells the story of your customer’s journey through your site compared to industry benchmarks. This information establishes a baseline for website performance, site conversion, and overall health to identify areas of opportunity for growth. While industry benchmarks, on their own, can be incredibly helpful, leveraging them as a reference point for your own KPI story can take your strategic planning to the next level.
KPI Heath Check Structure
The goal of KPIs is to paint a picture of your shoppers’ overall journey. Choosing your unique KPIs will depend on your customers. But some general KPIs may include:
– Add to Cart rate
– Checkout Start
– Abandonment rate
– Product View rate
– Bounce rate (or Engagement rate in GA)
– Overall Conversion rate
Each KPI should correlate to a certain section on the site with a particular theme and areas for optimization assigned. For example, Bounce and Product View rates tie to an upper funnel with the visitor exploring or searching items. This metric can influence an acquisition strategy by traffic source, site search or filter usage as areas for optimization. On the other hand, Add to Cart represents the mid-funnel journey and could indicate the visitor’s intent to purchase. In this case, areas for optimization could include urgency messaging, use of CTAs, or product recommendations.
KPIs can also be monitored by various functions of the ecommerce business. Bounce rates may be measured by a digital marketing team that is driving traffic to the site and Add to Cart could be measured by a merchandising team that manages product and pricing strategy.
Once underperforming areas on the site are identified, establish a desired target for the KPIs you look to improve. Generally, ecommerce business objective is to get a lift in the overall conversion and/or revenue, thus improving those KPIs and refining strategy to reach those targets will impact the bottom line.
Before Pulling Data
What is Available?
Make sure the data you need for measurement is available and determine if additional configuration/implementation is required. For example, when using Google Analytics to pull data around the shopping journey, Enhanced Ecommerce reports should be available.
Is the Data Accurate?
In order to make data-driven business decisions, reliability is the key. Can we trust the data? It is vital to make sure that tracking is implemented accurately (Ex. there is no double tracking issues that will skew KPIs, therefore causing the wrong perception of performance)
What Time Frame to Use?
When documenting KPI metrics, it’s important to get a good sample of data. But remember, a week or two of data will not necessarily paint an accurate picture. There are things to consider such as traffic volume, promotions, external factors, or any other outliers that may impact and skew data. Therefore, it is best to take a time frame with the steadiest traffic and trading conditions around a 90-day interval. This should be sufficient enough to get accurate measurements. However, if during that time an occurrence of a major site change or features has happened, it is better to avoid that and pick a shorter time interval instead.
A good practice is to reevaluate your KPI metrics and document updates on a quarterly basis to see if optimization efforts are paying off.
Why a KPI Health Check is Helpful and What Can it Be Used For?
- Inform next steps for additional analysis and research
- Identify areas with highest opportunities for improvement
- Increase confidence in large investments, resources and time when planning updates to the site and features that directly impact the bottom line
- Help to prioritize efforts and inform the roadmap for optimization efforts
Our Analytics Specialists have audited sites for some of the industry’s most iconic brands and typically find between 5-10 violations and suggestions for improvement. In need of support for your analytics implementation? Reach out today and ask about our complimentary audit services.