27 Aug
KPI stands for key performance indicator. KPIs generally are an essential tool for measuring the success of your business and making the adjustments required to make it successful. The usefulness of individual KPIs, though, have their limits.
No business can grow fast without regularly measuring the success of its marketing campaign. To measure your SEO campaign continuously, your first task is to set the Key Performance Indicators.
However, ecommerce SEO KPIs are slightly different from some other businesses. That’s why online retailers, webmasters, and ecommerce marketers have to understand them while running the SEO campaign.
What is KPI?
A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets. High-level KPIs may focus on the overall performance of the business, while low-level KPIs may focus on processes in departments such as sales, marketing, HR, support and others.
What makes a KPI effective?
Now that we know KPI stands for key performance indicator it is only as valuable as the action it inspires. Too often, organizations blindly adopt industry-recognized KPIs and then wonder why that KPI doesn’t reflect their own business and fails to affect any positive change. One of the most important, but often overlooked, aspects of KPIs is that they are a form of communication. As such, they abide by the same rules and best-practices as any other form of communication. Short, clear and relevant information is much more likely to be absorbed and acted upon.
In terms of developing a strategy for formulating KPIs, your team should start with the basics and understand what your organizational objectives are, how you plan on achieving them, and who can act on this information. This should be an iterative process that involves feedback from analysts, department heads and managers. As this fact finding mission unfolds, you will gain a better understanding of which business processes need to be measured with a KPI dashboard and with whom that information should be shared.
Ways to success with 11 top ecommerce SEO KPIs
Here are 11 of the SEO KPIs that are most relevant to ecommerce websites.
1. Organic Revenue & Transactions
Organic traffic or unpaid traffic is the most fundamental of all sorts of SEO KPI for any ecommerce website. Revenue is another KPI parameter saying a lot about the money made by sales through SEO. The most significant thing to keep in mind is that even a huge traffic to your website may not help you achieve your desired revenue. That is why a relevant traffic of target audience to your ecommerce website will funnel your sales and ultimately generate you revenue.
Revenue is the money generated by sales. It happens to be one of the most common KPIs when it comes to monitoring your ecommerce SEO success. You must track the amount of revenue you get from organic traffic. There are many tools you can use to track this KPI.
We recommend Google Analytics because, with it, you can easily compare the performance of other strategies in your marketing journey. You put a lot of effort into your SEO campaign hoping to boost revenue. But, you must also focus on increasing the transactions associated with organic traffic.
Revenue and transactions are different because over time there may be cheaper products being introduced into the market, promotions, and other factors affecting revenue. However, transactions are still an indication of an actionable marketing strategy.
2. Assisted Organic Conversions
Assisted Organic Conversions are those actions on a website that lead to a final conversion. In ecommerce websites this is an usual thing to see because people make multiple interactions before finally purchasing a product. Google Analytics lets you see this KPI for improvising your SEO. While using Google Analytics or any other reliable tool, it’s hard to know exactly the number of conversions a particular source of traffic contributed. Usually, it takes a lot of visits to get one single conversion.
Fortunately, you can access Assisted Conversions in Google Analytics by choosing the “Conversions” option, then click on “Multi-Channel Funnels” and then “Assisted Conversions”. By viewing the assisted conversions, you’ll understand better all the conversions the organic traffic has attributed and how effective your SEO strategies are. Additionally, you’ll also see the revenue that the assisted conversions have generated.
3. Conversion Rate
Your conversion rate is the percentage at which your ecommerce website visitors are converting into customers. It is one of the most important on-site SEO metrics for a KPI. It shows how effectively you can make users interested in buying products from your website. This factor will also show the number of people who visited the ecommerce website and didn’t make any purchase.
Moreover, the conversion rates show the success of your on-page SEO strategies. A higher conversion rate from any source of traffic can be an indication of a more relevant copy, more effective checkout flow, or a better on-page experience for visitors. Therefore, you’re likely to realize an increase in conversion rate while working on on-page SEO.
In addition to that, you may take a look at the conversion rate for organic traffic alone and compare it to the conversion rates of other marketing strategies to see if it’s on par, higher, or lower. With that info, you can set benchmarks for the KPI from there and ensure that your business is on the right track.
4. Organic User Lifetime Value
Customer Lifetime Value (CLV) is the measure of total investment that a customer makes in your products, services or brand in an unlimited time period rather than just their first purchase. Since it is easier to influence an old customer to make a purchase than a new customer, CLV is considered another KPI to keep an eye on.
Driving a lot of traffic to your ecommerce website through various SEO techniques is just not enough. What you need is valuable traffic. Over the years, Google Analytics has been used in lifetime value tracking in beta and has proven to be quite valuable.
By default, lifetime value is categorized in channels, which makes it easy to view the value of organic search users with time. A higher organic user lifetime value is to be attributed to better on-page user experience or ranking for more relevant keywords. By comparing the organic traffic lifetime value, you can see how they relate.
When monitoring this data, you should consider the info that users may have had while coming from other sources. By doing so, you’ll understand the best way to present that info to the visitors coming to your site organically.
5. Number of Non-Branded (But Still Relevant) Keywords
If you’re an SEO professional, you understand the ins and outs of keyword tracking. However, you also need to learn and be good at tracking the difference between branded and non-branded keywords. In marketing, this is critical because we need our sites to rank for keywords relevant to our products or services.
There are a few ways through which you track this. One of them is, of course, using reliable keyword tracking software. However, you can also utilize Google Analytics’ Search Console tool. From here, you can either export data or utilize advanced search features to filter out branded keywords.
6. Keyword Ranking Increases/Decreases
When working on your SEO campaigns, one of the common things to track is the standings on your target keywords. Sometimes, there may be words that you wish to increase your rankings for and others that you wish to decrease rankings for. You have to track both.
Keyword Rankings are the most exploited part of SEO and so act as good KPIs. These are words or product names that are searched on search engines and you would want your ecommerce website to rank for. These rankings determine the possibility of new traffic that you might be attracting and other related insights.
You must also remember to benchmark before getting started with your SEO campaign. The benchmarks will let you compare and understand where your SEO efforts have taken you and where you’re ended.
7. Click through Rate (CTR)
Click-Through Rate (CTR) is one of the factors considered when it comes to SEO. Although there’s no proof yet if it’s directly related to ranking, it’s still an important factor. By increasing your CTR, you’ll be driving more and more traffic to your ecommerce website, which will probably increase sales.
You can monitor the CTR either at the landing page or keyword level or both. You can also track both of these in Google Analytics via the Search Console integration.
8. Organic New Users
It feels great when you get new visitors to your website because you know that it’s a chance to acquire more customers. Therefore, you must track how many new visitors come from your SEO strategies. You’ll want to monitor how many new visitors are coming and increase this number over time.
However, you have to ensure that you’re tracking how the new visitors are interacting with your site. That will let you know if your site is attracting the right audience from the search results.
9. Free Listings Orders from Google Merchant Center
Are you already using Google Merchant Center? Well, if you’re not, you should consider it because there are some KPIs you’ll want to measure on this platform. Through the platform, you’re able to purchase shopping ads and have free listings that you can utilize to promote your products or services organically.
With the platform, you can track the number of orders you have received after optimizing product listings. To understand better the effectiveness of your listing SEO, you can have a look at the total sales.
10. Core Web Vitals
This is Google’s latest ranking factor and can be found in Google’s Search Console. Core Web Vitals are a set of features affecting the overall page experience and UX is the heart of an ecommerce website. No buyer likes to stall on a page with poor loading speed and this is where you can make revenue.
Core Web Vitals includes Largest Contentful Paint (LCP), First Input Delay (FID) and Cumulative Layout Shift (CLS). All of these either directly or indirectly affect the interaction and thus conversion rate of a website.
Also, the Core Web Vitals is a direct measurement of page experience that Google has said is a ranking factor explicitly. In marketing, page speed is critical because not many potential buyers are patient enough to wait for up to 10 seconds or more for a page to load.
You can track Core Web Vitals in Search Console. The best measurements are as explained below:
- Largest Contentful Paint (LCP) – This one measures a page’s loading performance. For the best user experience, LCP ought to happen within 2.5 seconds from the time the page first begins to load.
- First Input Delay (FID) – FID measures interactivity. An FID of at most 100 milliseconds is ideal to provide a good user experience.
- Cumulative Layout Shift (CLS) – It measures visual stability. Your site should have at most 0.1 CLS to provide a good user experience.
11. Return on Investment (ROI)
The calculation of this KPI may differ from one person to another. Keep in mind that you’re always investing in a technique even if it’s not paid. To execute a strategy, you’ll need to invest in money or time – sometimes both.
The time factor may be contained only to your time but a team may be involved. When measuring your time investment, each individual’s time ought to be accounted for and assigned a value. For instance, your time may be worth $60 per hour or $100 per hour.
From there, you need to multiply each individual’s time investment by their respective hourly value to find the value of their investment. If you’re a team executing SEO for you, then that will be part of your investment. But the price of collateral, tools, and others ought to also be included and calculated.
Moreover, the cost of goods sold ought to be included in your gloss investment. After you have calculated the total investment, divide your revenue by this number (total investment) to find your real Return on Investment.
How to write and develop KPIs
When writing or developing a KPI, you need to consider how that KPI relates to a specific business outcome or objective. KPIs need to be customized to your business situation and should be developed to help you achieve your goals. Follow these steps when writing a KPI:
1. Write a clear objective for your KPI
Writing a clear objective for your KPI is one of the most important – if not THE most important – part of developing KPIs.
A KPI needs to be intimately connected with a key business objective. Not just a business objective, or something that someone in your organization might happen to think is important. It needs to be integral to the organization’s success.
Otherwise you are aiming for a target that fails to address a business outcome. That means that, at best, you’re working towards a goal that has no impact for your organization. At worst, it will result in your business wasting time, money and other resources that would have best been directed elsewhere.
The key takeaway is this: KPIs need to be more than just arbitrary numbers. They need to express something strategic about what your organization is trying to do. You can (or should be able to) learn a lot about a company’s business model just by looking at their KPIs. Without writing out a clear objective, all of this will be lost.
2. Share your KPI with stakeholders
Your KPI is useless if it doesn’t get communicated properly. How are your employees – the people tasked with carrying out your vision for the organization – supposed to follow through on your goals if they don’t know what they are? Or perhaps worse: Not sharing your KPI risks alienating and frustrating your employees and other stakeholders who are unable to see the direction in which your organization is heading.
But sharing your KPIs with your stakeholders is one thing (though even this is something that too many organizations fail to do). More than that, though, they need to be communicated right away.
KPIs need context to be effective. This can only be accomplished if you explain not just what you’re measuring, but why you’re measuring it. Otherwise they are just numbers on a screen that have no meaning to you or your employees.
Explain to your employees why you’re measuring what you’re measuring. Answer questions about why you’ve decided on one KPI over another. And most important of all? Listen. KPIs aren’t infallible. Nor will they necessarily be obvious to all involved. Listening to your employees will help you identify where your organization’s underlying goals aren’t being communicated properly
Say you’re getting lots of questions about why profit isn’t a KPI for your company. It’s a reasonable belief for your employees to have. Making money is, after all, an essential part of what any business does. But maybe revenue isn’t the be all and end all for your organization at a given time. Maybe you’re looking to make major investments into research and development or are on a major acquisition spree. Getting lots of questions like this is a sign you need to do a better job of communicating your KPIs and the strategic goals behind them.
And who knows: Your employees might even give you some ideas on how to improve your KPIs.
3. Review the KPI on a weekly or monthly basis
Checking in on your KPIs regularly is essential to their maintenance and development. Obviously tracking your progress against the KPI is important (what else would be the point of setting it in the first place?) But equally essential is tracking your progress so you can assess how successful you were in developing the KPI in the first place.
Not all KPIs are successful. Some have objectives that are unachievable (more on that below). Some fail to track the underlying business goal they were supposed to achieve. Only by checking in regularly can you decide if it’s time to change your KPIs.
4. Make sure the KPI is actionable
Making your KPIs actionable is a five-step process:
- Review business objectives
- Analyze your current performance
- Set short and long term KPI targets
- Review targets with your team
- Review progress and readjust
Most of this we’ve already gone over, but it’s worth focusing on the need to develop targets for both the short- and long-term. Once you’ve set a goal with a timeline that’s farther into the future (say the next few quarters, or your fiscal year) you can then work backwards and identify the milestones you’ll need to hit on the way there.
Let’s say, for example, you want to sign up 1,500 newsletter subscribers in the first quarter of the year. You’ll want to set monthly, bi-weekly or even weekly targets to get there. That way you’ll be able to continually reassess and change course as needed on your way to achieving the longer-term goal.
You could divide the targets up equally according to each month. In this case that would be 500 subscriptions in January, 500 in February and 500 in March. However you may want to get more specific. There are more days in January and March than February, so maybe you want to set a target of 600 for those months. Or maybe you typically get more website traffic in February (perhaps your business has a presence at a major trade show) so you decide to set a target of 800 in that month.
Whatever it is, make sure you break up your KPI targets to set short-term goals.
5. Evolve your KPI to fit the changing needs of the business
KPIs that never get updated can quickly become obsolete. Let’s say, for example, that your organization recently started a new product line or expanded overseas. If you don’t update your KPIs, your team will continue to chase targets that don’t necessarily capture the change in tactical or strategic direction.
You may think, based on your results, that you are continuing to perform at a high level. In reality, though, you may be tracking KPIs that fail to capture the impact your efforts are having on underlying strategic goals.
Reviewing your KPIs on a monthly (or, ideally, weekly) basis will give you a chance to fine tune – or change course entirely. You might even find new and possibly more efficient ways of getting to the same destination.
6. Check to see that the KPI is attainable
Setting achievable targets for your team is essential. A target that’s too high risks your team giving up even before they start. Set a target too low and you’ll quickly find yourself wondering what to do with yourself once you’ve achieved your annual goals two months into the calendar year.
An analysis of your current performance is essential. Without this you’re left to search blindly for numbers that have no root in reality. Your current performance is also a good starting place for deciding on areas upon which you need to improve.
Start rooting around in the data you’ve already collected to set a baseline for what you’ve accomplished in the past. Tools like Google Analytics are great for this, but so are more traditional accounting tools that track revenue and gross margin.
7. Update your KPI objectives as needed
KPIs aren’t static. They always need to evolve, update and change as needed. If you’re setting and forgetting your KPIs, you risk chasing objectives that are no longer relevant to your business.
Make a habit of regularly checking in not just to see how you are performing against your KPIs, but on which KPIs need to be changed or scrapped completely. To someone who’s never developed a KPI before, all of this might sound exhausting.
But here’s the good news: Once you’ve gone through this process a few times, it’ll be that much easier to use it again in the future.
Are KPIs still relevant?
KPIs often have a negative connotation associated with them. Unfortunately, many business users are beginning to see KPI monitoring as an obsolete practice. This is because KPIs fall victim to that most human of all problems: lack of communication.
The truth is that KPIs are only as valuable as you make them. Key performance indicators require time, effort and employee buy-in to live up to their high expectations. Bernard Marr, best-selling author and enterprise performance expert, sparked an interesting conversation on this subject in his article, “What the heck is a KPI?” The comments make it clear that while key performance indicators may have fallen out favour (depending who you ask), their potential value remains in the hands of those that use them.
So then why are key performance indicators so important?
Setting key performance indicators for an organization usually happens during the strategic planning phase, whether you do that yearly, quarterly or even more frequently, the goal is to ensure the entire organization is aligned towards the same objectives. Imagine a large row boat with ten people, if 3 people think the boat is heading left, 5 people think the boat is supposed to be heading right and 2 people think the boat is supposed to turn around. What happens to the boat?
The boat will start spinning around. Therefore, ensuring alignment from top of the organization all the way to the front line employees is the difference between a boat moving forward in unison vs getting nowhere.
Wrap up
The most important part of any KPI is its utility. Once its outlives its usefulness, you shouldn’t hesitate to toss it and get started on new ones that better align with your underlying business objectives.
The above are the 11 top ecommerce KPIs this year that you can use to track your success. Remember, you don’t have to wait until it’s too late to turn your ecommerce back on the right track. Start tracking now so that you can act right away.
Tracking the KPIs that you utilize in monitoring and measuring your success will help you come up with better SEO strategies moving forward. Act now, know how your business is performing, and understand the adjustments you need to make for better results.