How to track your e-commerce strategy effectiveness with consistent KPIs – PART 2 of 2
A simple method to keep monitored your e-commerce Performance.
How to improve the results on your e-commerce of the web marketing campaigns? How to track effective KPIs in a multichannel environment?
In the Part 1 we talked about the funnel model that will guide, as a holistic concept, all the web marketing actions. Let’s see in detail how to track them with the consistent KPIs on an e-commerce.
The C.O.R.E. MODEL
In the past article we have seen that the funnel purchase model could be improved as a C.O.R.E. MODEL (Channel → Objective → Result→ Estimate ).
It is a model set to monitor different variables with a omnichannel approach, especially the different results on the e-commerce of different and often multichannel campaigns.
In particular, the model is aimed to:
- Maintain an alignment between the different marketing actions (at Channel level) and their Objectives. An alignment between expectations of the marketers and the tool used is essential to avoid misunderstandings in the interpretation of the results: too many times the objectives of the campaigns are misleading, respect to the channel used. For example, if a banner campaign has only the objective to increase sales, all the results expected are misleading. In this case it would be better set as Objective the brand awareness.
- Align the Objectives with the Effects on the customer’s experience along the purchase funnel; in other words, how to obtain different KPIs from the measurement of each Effect in the funnel stage. When the objectives (brand awareness, for example) are aligned with the effects and with their related metrics of measurement (KPI such as increase in the brand research keywords for example), then we are sure that the KPIs are consistent.
- Once obtained the KPIs, it will be easy, after tests and experiences, starting to make Estimations on each marketing action.
With this C.O.R.E. Model, you can have a definite omnichannel panel to monitor and improve the performances of your web marketing efforts, having always in mind the outcomes.
The model, showed in the picture, starts from the different channels (see the left side) that could lead a target audience to a different level of the purchase funnel.
At the left side of the picture, we have classified generically as ‘Channel’ the column of the influences, that can be of 2 types:
the source channel of web marketing efforts aimed to gather qualified traffic (off-site means, as PPC or SEO)
the optimization endeavours (on-site efforts, as product page optimization) that are related to the funnel stage where the user is already on the website.
In facts, once that the user has landed in one stage from whatever off-line effort, the objective of the e-commerce design is to ease the sales, leading him smoothly down along the funnel.
THE ALIGNMENT OF CHANNEL> OBJECTIVE > EFFECTS (KPI)
For example, a banner campaign can have as objective the increase of the brand awareness, so the main result that you should track as KPI is the increase in natural searches using the ‘brand keyword’, more than the number of immediate purchases. This is because every channel, as proposed in the model, must have their main objective along the funnel. Of course, this doesn’t mean that the sales triggered by the banner campaign are not to be tracked: it means just that the weight of the figures of this result should be less than the other, because the main goal was another.
The channels in web marketing generally refer to what in the model are called ‘Off-site channels’. In the classical point of view (apart the C.O.R.E. Model), the on-site Channels aren’t considered means of promotion just like web advertisement; strange, isn’t it?
In another article we will see how instead, one of the most powerful and effective “mean of promotion” is a proper one-to-one optimization of the website (trough website optimization and landing pages optimization paired with the off-site campaigns).
Anyway the off-line channel can be divided upon the fact that the effects are the results of a paid action or not:
-REFERER (link building, article marketing, content writing)
-ADS (PPC, Remarketing, banner, Social Ads,)
More easily, the Channel have to be divided upon their different type, along with the Google Analytics main categories:
1-Referrals (websites, social)
2-Search Engines (SEO, PPC)
Anyway the campaigns can be always monitored, thorough the standard UTM url tracking variables to append to the landing url.
For example, “?utm_campaign=blogpost&utm_medium=social&utm_source=facebook”, where is possible to set the tracking of the type of source (utm_medium=social), the subtype (utm_source=facebook) and the given name to the campaign (utm_campaign=blogpost).
If the KPIs refers to different stage of the funnel, they aren’t important at the same level, so how to weigh them?
TRACKING AND WEIGHTING
Weighting the results of the various efforts is aimed to better understand the relations of each marketing campaign with the objectives on the purchase funnel. As we have seen in the Part I, the purchase funnel is a good indicator of what are the main needs of the e-commerce platform in order to maximize the orders versus the visits; in other words, in order to keep a long-term growth rate avoiding investment wasting.
By now we don’t consider some objectives that could make more complicated the model, like the objective to sell more profitable products of the catalog respect to others, and so on.
Generally, the number of KPIs in an e-commerce should be no less than 3 for each stage, at least in my opinion.
But how to weigh them if, after some months, adding a new KPI will be useful?
From a holistic point of view, in a complex system, where there are variables influencing the others, you should focus in overall inputs and overall outputs. Some campaigns can have an indirect influence on the website and, why not, on the next campaign: for example a remarketing campaign can lead me 5 times on the e-commerce in a Christmas Campaign, but at the end I can buy just when I find the brand name on a Social Ads. In this case, my sale should be considered an effect of the Social Ads, but surely the fact that I previously visited the website without buying was important for the brand awareness and the brand image, isn’t it?
So, the total weight of the different KPIs should be 100%.
If the total weight of all the KPIs is 100%, a KPI like the average visits per month should be weighted for example 0,01% of the total, so the number of sales per customer by month should be weighted far more, being the most important KPI at the end of the purchase funnel: let’s say, 89%.
A statistic could say: “the 0,01% is not a real relevant ratio, why should we keep track of its KPI”?
Because the rule of 80%-20% is just a matter of how to find the causes in a stable environment, while an e-commerce is a marketing process: I mean that in a omnichannel environment, even some visits can become sales after 4-5 months, as we have already seen before.
That’s just to explain how avoiding to keep tracked the different variables that have effects on the main objectives could be misleading. Even more, the data consistency between different periods of time is maintained using KPIs at all the funnel stage.
LAST STRATEGIC CONSIDERATIONS
Just remember, the KPI of the purchase funnel monitoring helps to get monitored the effectiveness
of the e-commerce communication, while the web marketing plan keeps track of the returns on investments.
But somehow, the web marketing plan could be designed in a ‘C.O.R.E. Model’ flavour in order to find better hints about the consistency between the funnel strategy (optimize, gather qualified traffic, improve brand awareness) and the marketing campaigns. We will see how in the next articles.
Remember that the effectiveness of the funnel depends on how you communicate before and after the visit of the target user on your e-commence.
But first of all, it should be clear to you what is the value proposition of your e-commerce, in other words, the answer to the question: ‘why my target audience should buy my products’?
Is the answer ‘For low prices’? ‘For an excellent customer service’? ‘For the width of the range of your catalog’? ‘For the specialist information that you provide as an opinion leader in your niche’?
Without a value proposition, is like you had a perfect communication (how you say things), but flawed by the content (what you say).
Advertising counts, but customer relations is a golden mine.
If you see the classic AIDA purchase funnel scheme, generally it ends with what pays the bill: the purchase.
But if you just start thinking that in the Internet arena probably you’re not alone, that your products are not unique and your prices not, finally you can agree with me that having a lot of orders in one year doesn’t means that is possible to rest on one’s laurels.
So there is a golden treasure in the modern e-commerce: the customer! He can become a reliable (and free) advocate of your brand, if he has the feeling that he’s not considered by your customer care office merely a number, but a person.
In other words, just give to your communications a bit of personalization and – more of all, don’t forget to give special offers to a small group of customers.
Even if you don’t have a deep segmentation of your customer base, never forget that the cost of a new customer is always far more big high than the cost to keep an old customer. Keep track of the average reorder rates, and inspect the behaviour of the customers that buy less than the average, e.g. in terms of number of items per re-order, number of re-orders by year, average cart value re-order et cetera.
That’s all by now, I hope that you ‘ve found interesting this article on e-commerce strategy and about how to set KPIs in an e-commerce website.