KPIs can seem pretty straight forward when it comes to your digital marketing campaigns, but thats not always the case. Click through rate, view through rate, etc are all great and can indicate what attracts your customers interest at first touch, but what about actual conversions and profit? Here are a few KPIs we think will help you translate all of your hard work and amazing campaigns into sales for your e-commerce company.
Average Order Value (AOV)
According to Shopify, the average order value for customers referred from Instagram is $65.00, followed by Facebook ($55), Twitter ($46), and YouTube ($38). Looking at your average order value broken out by your campaigns will not only tell you what campaigns yield the highest value, it can also indicate the most efficient and effective initial landing page for increased revenue. For example, let’s say you have 3 campaigns. One is advertising and leading to a landing page on pants, one on shirts, and one on sunglasses. You notice that your AOV is the highest on sunglasses. From this (and looking at on site analytics) you decide that sunglasses are a great selling point for the rest of your brand so you launch other campaigns centered around your sunglasses and your brand. Knowing the value of sunglasses as the first landing page touchpoint will also inform strategy surrounding other parts of your marketing strategy such as special offers and landing page flows.
Cost Per Acquisition (CPA)
CPA can be a very important for optimizations, but it can also indicate what your customers resonate with the most. Looking at your CPA down to the creative level can give you a sense of what customers resonate with the most. For example, you have an ad for a hat and an ad for a t-shirt. Your CPA for the t-shirt is $3 less than that of the hat. From this, we can create more ads that advertise the t-shirt instead of the hat since the CPA is lower. A/B test different versions of the t-shirt ad either by changing the type of tee or the color; really any product variable works. This can also give some insight on creating new product iterations based on what the lowest CPA ads are promoting.
This might be the most important KPI you have as an ecommerce business, but this can be difficult to track within the biggest digital platforms. Major platforms will provide the media spend, AOV and CPA, but cannot provide the cost of goods sold (your COGs) which can make a monumental difference when optimizing your campaigns. Let’s set out an example; You sell t-shirts for $20 on your website. For a specific campaign, your AOV is $40 and your CPA, according to Facebook, is $30. Seems fine right? You’re still making some money on the sale. Now let’s factor in your average COGs for that campaign and say it is $15. You’re now in the hole but can’t optimize for that since that is not a default metric in Facebook or Google. If you have Shopify, try out Cloop. It syncs with your store and imports COGs to Google and Facebook and imports data down to the ad level for better optimizations.
Developing KPIs is crucial for marketing success, but some can be harder to define and measure than others. Make sure you are equipping yourself with all the tools you possibly can to make sure your KPIs are both efficient and effective.