0:01

As an online business owner , you may be lost

0:03

and wondering what do you even track

0:05

or review on your website

0:07

and in your business to make sure it's growing

0:10

and creating more income for you

0:12

? While business owners have different

0:14

KPIs or key performance indicators

0:16

that align with their goals , there

0:19

are some common KPIs to consider

0:21

when tracking your website

0:23

in your business to make sure you're always

0:25

on a growth trajectory . Not

0:28

tracking metrics and not tracking

0:30

the right metrics can put your business behind

0:33

and potentially out of business . So

0:35

let's dive in to the common KPIs

0:38

to consider and how to make tracking

0:40

more easier and a bit of a

0:42

habit . Welcome

0:44

to the e-commerce made easy podcast . I'm

0:46

your host , k Saunders . When we started

0:48

this business , all I had was a couch , a laptop

0:51

and a nine month old my main goal to

0:53

help others . Now , with over 20 years in

0:55

the e-commerce building industry and even more

0:57

than that in web development , I have seen a lot

0:59

. I love breaking down the hard tech and

1:02

to easily understandable bits to help

1:04

others be successful in their online business

1:06

. Whether you're a seasoned e-commerce veteran

1:08

or just starting out , you've come to the right place

1:10

. So sit back , relax and let's

1:13

dive into the world of e-commerce together . Welcome

1:17

back to this week's episode of the e-commerce

1:19

made easy podcast . Today we're

1:21

talking about dreaded KPIs . I

1:23

know statistics and information

1:25

and numbers . A lot of us don't like

1:28

to really look and go

1:30

at these things , but I know for

1:32

me that it's not a very exciting topic

1:34

, as I'm saying , and many times I'll

1:36

procrastinate reviewing my numbers

1:38

but do you know what happens

1:40

when I regularly put off reviewing

1:43

our numbers ? Our business growth falls

1:45

behind . I've seen it time and time again

1:47

and the 21 plus years of

1:50

us having this business , when I fall

1:52

off the wagon looking at our numbers

1:54

, we fall off the wagon too

1:56

, and our income and our business

1:58

growth stagnates and slows

2:01

down . I'm sure you

2:03

get it , though . It's so easy to

2:05

feel like other tasks in our business

2:07

are more important until you finally

2:09

do look back at those numbers and realize

2:11

, man , if I had been keeping an

2:13

eye on it , I could have corrected things earlier

2:16

and not been in the situation I'm

2:18

currently in . I know I have felt

2:20

that several times in our business

2:23

and I always kind of like wanted to kick

2:25

myself in the butt . For why did I put

2:27

this off and why didn't I just do this ? Because it's

2:29

really not that hard once you really get a habit

2:31

of it . Okay

2:33

, so let's work through this together . So

2:35

, even though our businesses may look different

2:37

mine and yours there are some very common

2:40

and normal KPIs that make sense

2:42

for all of us business owners to look

2:44

at . So

2:50

the first one we're going to talk about is conversion rate . While most think

2:52

of conversion rate being related to sales metrics or monetary value , it can

2:54

actually describe much more than

2:56

that . So conversion rate is simply

2:58

the number of conversions divided

3:01

by the number of visitors and

3:04

then to get to the percentage , you just multiply that

3:06

result by 100 to get your

3:08

conversion rate percentage . So

3:11

when I said that

3:13

conversion rates doesn't necessarily

3:15

have to be a monetary conversion

3:17

rate , what am I really

3:20

talking about there and what should we track

3:22

? So , while

3:24

I recommend tracking your sales conversion

3:26

rate , of course , for sure you need to

3:28

be doing that you know how many

3:30

sales are you getting versus how many visitors

3:33

are you getting to your website ? You

3:35

also want to consider some other conversion

3:37

rates that are a bit more of a long-term

3:40

goal type of conversion rate . So

3:43

, for example , are you getting

3:46

more people on your newsletter ? Is it

3:48

growing ? Are you getting more followers

3:50

on social media ? Are you

3:52

getting more engagement in your newsletter

3:54

? Are you getting people responding back to you and

3:56

are you getting good engagement in your social

3:58

media ? Is it growing or is it stagnating

4:00

or declining ? And if you're hearing

4:03

some funny noises , the cats are in my

4:05

office right now thinking it's a cool idea

4:07

to play in the recycle

4:10

bin , so I excuse any background noise

4:12

you may hear . It's just life . I've got two

4:14

office cats and it's

4:16

kind of their witching hour . They want to have some attention

4:18

. All right back to what we could be

4:20

using for our conversion rates . Let me

4:22

recap there . So are we getting more people on our

4:24

newsletter ? Are we getting more people on

4:26

our social media followers and

4:30

are we getting more engagement in our newsletter and social media ? And then , finally

4:33

, one of the final suggestions I

4:35

have potentially , are you getting more people in your Facebook

4:37

group ? So if you utilize something

4:39

like a Facebook group , are you getting

4:42

more people in it than

4:44

you have losing ? So

4:46

I want you to take a moment to write down

4:48

what are your goals of your business . Where

4:50

do you want to grow your business ? What do you

4:52

want to make sure is always moving forward

4:55

? Then I recommend checking

4:57

the statistics weekly on these goals

4:59

. Personally , I feel like checking

5:01

conversion rates to six weekly

5:04

is a good idea Now . You could go

5:06

to every other week or monthly if that

5:08

feels a little bit too heavy for you right

5:10

now , and it might be a good idea to start

5:12

at more of every other week

5:14

or monthly if you're just first starting out

5:16

and have never tracked conversion rates

5:18

ever . But

5:21

I want you to start making this a regular

5:23

habit . How many visitors

5:25

have been to your site versus how many sales

5:27

have you gotten ? How many people have

5:29

gone to your newsletter signup page versus

5:32

how many new signups did you get ? I

5:34

really find that really looking at

5:36

this is going to help you assess whether

5:39

your website's being effective for you or

5:41

not , and I find this to

5:43

be a great task to do late in the day or

5:45

when you kind of have a little bit less mental

5:47

energy maybe late in the week too

5:50

, and you need to be working on your

5:52

business and towards your business goals , but

5:54

you might not have the brain power to do something

5:56

else that's more creative or might create

5:58

. Need some more brain space in your head , because

6:00

normally these are just recording some

6:02

numbers , making , doing the division

6:04

and then figuring out your percentage and

6:06

recording it . I recommend you record

6:09

things like this in an Excel or Google

6:11

sheets . That way you can see the trends

6:13

over time , and I really recommend

6:16

you do this one very consistently

6:18

. So whether you pick it's monthly or

6:20

the pick it's weekly or every other week , make

6:23

sure you always do it at about the same

6:25

time every time you do

6:27

it , and that's going

6:29

to help you create consistency in

6:31

being able to compare the numbers and

6:34

making sure that you're comparing apples to apples

6:36

versus apples to oranges , because

6:38

if you do it , say , on a Tuesday

6:40

, one day , a Tuesday morning , but then the next

6:42

time you check it is like a Thursday

6:45

afternoon . You're going to get different

6:47

numbers based upon the days of the week

6:49

, because I find for

6:51

our business , our customers are very cyclical

6:53

. They're not here on our website very much

6:56

on Saturday and Sunday . They're mostly

6:58

on our websites during the week . So

7:00

if you're picking a different day of the week

7:02

to check these metrics , you're not

7:04

going to probably get very good comparable

7:06

results to previous times that

7:09

you're checking it . So make sure you're very consistent

7:11

here . Okay

7:13

, so the next KPI metric that's very

7:15

important to business growth is customer

7:17

acquisition cost . So

7:20

customer acquisition cost simply is

7:22

how much does it cost to acquire a new customer

7:24

, as basically the words

7:26

imply , right ? So while the definition

7:29

is simple , measuring this metric

7:31

can actually be kind of hard . You

7:33

want to make sure that you take into account

7:35

several factors when determining the

7:37

cost of acquiring a new customer . So

7:40

, for example , do you run any ads

7:42

? Do you run ads on Facebook , instagram

7:45

, linkedin , ads on Google

7:47

, ads on Bing ? Do you run ads

7:49

? Note how much you're spending in

7:52

ads over the time period that you're going to want

7:54

to evaluate this . What

7:56

do your other marketing efforts cost ? For

7:59

example , do you , the business owner , do your

8:01

own marketing ? If so

8:03

, start tracking . How much time do you spend

8:05

each week or each time period

8:07

that you're tracking here ? How much

8:09

time do you spend on marketing ? What

8:11

is your effective hourly rate ? So

8:14

you want to take your salary or what

8:16

you bring home , divided by the number

8:18

of hours you work in a year , and

8:20

that's going to be your effective hourly rate

8:22

approximately . You might wanna pad

8:25

that sum depending upon whether you want growth and

8:27

you wanna be able to cover your expenses and taxes

8:29

. So figure out your effective hourly

8:32

rate and how much time are

8:34

you spending on it . That's your cost for you

8:36

to do your own marketing ? Or do

8:38

you have staff that's helping you do your own marketing

8:40

? Have them start recording how

8:42

much time do they spend on marketing for you and

8:46

then you can figure out their effective hourly

8:48

rate . Make sure you add in their business costs

8:50

too , because when you have employees especially

8:52

if they're not just contractors and they're actual

8:54

, true employees you're going to be at least in the United

8:56

States paying part of their

8:59

taxes , part of their healthcare

9:01

, potentially , and things like that . So make sure you

9:03

consider the fully loaded cost

9:05

of your employee when you're trying to figure out how

9:07

much their effective hourly rate is . And

9:10

then , do you have software that supports acquiring

9:12

new customers ? Do you have a CRM

9:15

, a customer relationship manager ? Do you have social

9:17

tools to a customer relationship manager ? Do you have social tools

9:20

to help you post on social media

9:23

? Look at your software there . Do you have professional

9:25

services to acquire new customers ? Are

9:27

you paying somebody else to help you

9:29

acquire these new customers ? And

9:32

then , is there any other overheads related

9:34

to acquiring customers that we haven't discussed

9:37

as options here ? So this one's a

9:39

bit harder to track , especially the first

9:41

few times , because you really want to nail down

9:43

what are these external costs

9:45

or internal costs to our

9:47

business to acquiring a new customer

9:49

. So then , once you've

9:52

figured out the cost that

9:54

it takes you to acquire new customers how

9:56

many customers did you get in that time period

9:58

that you're currently evaluating ? So

10:00

then you can then figure out the cost

10:03

to acquire the new customers . Take

10:05

your total cost divided by the number of customers

10:07

you got in that time period and you're going to get

10:09

your cost of acquiring

10:12

a new customer . It's kind of a tongue twister to say

10:14

so . Personally , I feel like this

10:16

is a great idea to track a bit

10:18

more on the monthly side , or maybe even

10:20

a little bit longer , depending upon how

10:22

your business cycles . For

10:25

one , it's a harder metric to compute

10:27

and track and , plus

10:29

, having a whole month to average out the cost

10:31

will help you focus on non-cyclical

10:34

anomalies that can happen

10:36

in a business , non-cyclical

10:39

anomalies that can happen in a business . For example , as I mentioned earlier

10:41

, we get much less traffic on a Saturday and Sunday than

10:43

we do on the weekdays , so

10:46

we're acquiring a lot less customers

10:48

on the weekends than we would be on

10:50

weekdays . Now , if you add

10:52

into that the fact that holidays and

10:55

vacations can happen and

10:57

fall on weekdays , that could

10:59

skew one week's worth of data

11:01

. If , say , if you're in the

11:04

United States , the 4th of July happens on

11:06

a weekday , for that week you might get

11:08

a lot lower customer acquisition

11:10

cost for that week . Also

11:13

, for us we're a bit cyclical on the months

11:15

as well . Our customer is a bit quieter

11:17

, usually in June or July . It

11:20

could be one month or the other , sometimes both

11:22

, and then they tend to be a little bit quieter

11:24

in January or February . I

11:26

know this because of all the years of tracking

11:29

things like this . I know

11:31

that I shouldn't be worried if

11:33

our customer acquisition costs

11:35

in June or July is higher , because

11:37

that's typical for our business . So once you've

11:39

tracked this for a while , you can then

11:42

see what your overall

11:44

ebbs

11:46

and flows are for your business and that can

11:48

really help you project and be

11:50

ready for the times that it's a bit lower

11:52

or the times that it's when it's higher or the

11:55

times that it's when it's higher . So while

11:57

doing the customer acquisition is a

11:59

bit costly , there

12:07

are two main ways to reduce the cost of customer acquisition , and one is knowing your

12:09

ideal customer and knowing them very well . So if

12:11

you're attracting the wrong people to

12:13

your website , people who are not your ideal

12:16

customer , then your cost of customer acquisition

12:18

is going to be a lot higher because you're going to

12:20

have a lot of people landing on your

12:22

website , landing on your webpage , on

12:25

your newsletter et cetera , that

12:27

aren't your ideal customers and they're

12:30

going to kind of bloat the number

12:32

of people coming to you and not

12:34

purchasing . So making sure you

12:36

know your ideal customer well and you're speaking

12:38

to them well on your website

12:40

, in your advertisements , in your marketing efforts

12:43

, is going to help reduce this cost

12:45

. Also , engaging

12:47

with your customers early is key . So

12:50

whenever they do fall into

12:52

your circle and into your world , make

12:55

sure you're engaging with them early

12:57

and effectively and very well

12:59

, and that's going to help them become

13:01

to know and like and trust you better

13:04

and convert into a customer much faster

13:06

. So those are the two main ways you

13:08

can reduce customer acquisition costs

13:10

. Again , that's knowing your ideal customers well

13:12

and engaging with your customers early

13:15

. So while

13:17

getting new customers regularly is essential

13:19

to having a thriving business , keeping

13:22

them is a much lower cost

13:24

. So next we're going to go into customer

13:26

lifetime value . So

13:28

customer lifetime value , as it implies

13:30

, is the value a customer brings

13:32

to your business over the course of their working

13:34

or buying from you , so they're

13:37

working with you . If you're a service provider

13:39

or a coach , or if you sell

13:41

products instead

13:43

of services , how long are

13:45

they repeatedly coming back and buying

13:47

from you ? So having a high

13:49

customer lifetime value is important

13:52

as we want to keep and retain customers

13:54

as long as possible . They're already

13:56

familiar with you and if they like

13:58

and trust you , then they're going to

14:00

be coming back again and again

14:02

to use your products and your services

14:04

. So to calculate

14:06

customer lifetime value , you

14:08

want to project the average

14:10

spend of a customer and multiply it

14:12

by their life expected lifespan

14:15

as a customer . So

14:17

this is something that's a little bit more of a long

14:19

game to be able to project , because you

14:21

need to have some history there . You need to have

14:23

, you know , probably be in business

14:25

for you know , say , longer than a year

14:27

, for example , maybe a few more than that

14:30

, to be honest with you . But

14:32

even if you're just starting out in your business , getting

14:35

a handle on this and knowing what

14:37

to track is going to be very important

14:39

. So this is a

14:41

track , a metric that's pretty

14:43

common to track monthly for

14:46

most businesses rather than weekly , and even

14:48

some businesses find that it's

14:50

better to track this one

14:52

over a several month time

14:55

frame , so maybe quarterly

14:57

or every six months

14:59

or every year . They want to track this , depending

15:01

upon how often a customer would

15:03

be typically prompted to purchase

15:06

from you again . So if you're selling

15:08

products , say , let's say , cat

15:10

food , and they're going

15:12

to obviously want it , maybe once a

15:14

month or every couple weeks

15:16

, so they're going to be coming back to you more regularly

15:19

. Now , if you sell services

15:21

, they may only need your help and your

15:24

services every few months or once

15:26

a year , and so they might be coming back

15:28

every year . So look

15:30

at your business as a whole and how often will

15:33

customers typically buy from

15:35

you and use that to determine how

15:37

often you're looking at this metric . You

15:41

can also pick a few of your top customers

15:43

and see how often they repeat buying from

15:45

you to help guide you on how often to

15:47

track this metric If you're not quite sure how

15:49

often that they really would be ideally

15:51

buying from you . So , since

15:54

keeping customers and having them come back

15:56

for more of your products and services is key

15:58

to business success , how do we

16:00

do that ? How do we keep and retain those

16:02

customers ? Now we have a few podcasts as episodes

16:05

already on customer trust and customer

16:07

loyalty , so I highly recommend that

16:09

you listen to those . We'll link to those in the show

16:11

notes . But in general , what you want

16:13

to do is improve your initial impressions

16:16

on the customer . So whenever they

16:18

first purchase with you , whether it's

16:20

a product or a service how

16:22

are you giving them good customer

16:24

support and kindness in

16:26

that first stage of their first purchase

16:29

? You want to make sure your first impressions

16:31

are great . You also

16:33

want to deliver outstanding support . If

16:35

they have questions , whether it's before buying

16:37

or after buying , make sure you're

16:39

very responsive and very attentive to

16:42

them . And you can hear all the cat spells . Apparently

16:45

they're itching themselves . They

16:47

got a little scratch going on , so hopefully

16:49

you hear the little bell going on . All right

16:51

, so we wanted this back to where we were . You

16:53

want to deliver outstanding customer support

16:56

. Like I said , quick

16:58

responses , attentive responses

17:00

, making sure you're fully understanding

17:03

and answering their questions . I

17:05

find a lot of places that I need

17:07

customer support from Assume

17:10

what I'm asking rather than getting

17:12

clarifying questions sometimes when

17:14

they need it . Although today I

17:16

needed to contact a pretty big company

17:18

for some customer support and , wow , I was

17:20

impressed by them . They

17:23

were very concise , understood my questions

17:25

and came back with more questions and

17:27

answers to help me out and

17:29

they were just phenomenal . So , really

17:31

, how you have your people trained

17:34

to help support or whether you

17:36

are the one doing the support , making

17:38

sure you're very thorough

17:40

and kind when you're doing your support is super important

17:43

. Also , surprise your customers

17:45

and show your gratitude . We've talked about this a

17:47

few times on the podcast , but nothing

17:49

is better than a thank you email

17:52

or , even better , a thank you

17:54

note in the mail , whether it's a simple postcard

17:56

or a little letter saying , hey , thanks

17:58

for your support . I really appreciate it . Now

18:01

, I'm not saying you have to do this to every single

18:03

customer or client , but

18:05

you know what Doing that occasionally when

18:07

you can , is a really great way to

18:09

show your gratitude and support

18:12

. Or giving people a shout out on social

18:14

media and thanking them when it's appropriate

18:16

for your product or service . All

18:18

right , so let's recap the three main

18:21

KPIs we discussed today . First

18:23

off , conversion rate . So

18:26

not only look at your monetary conversion

18:28

rate . How many visitors are you

18:30

bringing to your site versus how many sales

18:32

you're getting ? Also , look at those longer

18:34

game conversion rates . It's going to bring and

18:37

build your business up in the long term , like

18:39

newsletter subscriptions , social

18:41

media followers , engagement and

18:43

all those areas . So look at several

18:46

different conversion rates that are important to you

18:48

and your business and write those down

18:50

and make sure that you're measuring these ideally

18:52

weekly , if not bi-weekly or monthly

18:54

. Then

19:00

look at the harder one , which is the customer acquisition cost . Make sure you're fully figuring

19:02

out your actual cost for your marketing efforts and your advertising

19:04

efforts and then figuring how much it

19:07

you , how many customers you get from

19:09

that effort . And then , last

19:11

but not least , the customer lifetime value

19:13

. How much is your customer worth over

19:15

the time period that they are

19:17

with you ? And

19:20

figure out how can you improve this . How

19:22

can you make the customer spend a bit higher

19:24

? How can you make the number of people

19:26

coming back to you buying again higher

19:28

? Both of those are going to help

19:31

your customer lifetime value metric

19:34

for you to measure , all

19:37

right . So I want to know do you have other KPIs

19:39

that you track ? We want to hear from you

19:41

. So drop us an email at podcast

19:43

at bcsengineeringcom

19:47

, or send us a direct message

19:49

on social . Again , our email is podcast

19:51

at bcsengineeringcom

19:54

. Myself and one of my staff members

19:56

personally review and read every single

19:58

one of those emails you guys send in . All

20:01

right , so thank you for joining me for this week's

20:03

episode of the e-commerce made easy podcast

20:05

. Be sure to visit our show notes

20:07

and other episodes on e-commerce

20:10

made easy podcastcom and

20:12

if you're watching on the YouTube channel , make

20:15

sure you hit that subscribe button . And if you're listening

20:17

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20:20

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20:24

be thrilled if you could rate and review

20:26

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20:28

ratings and reviews help me reach more

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listeners and empower more people like

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you to thrive in their online business

20:35

world . Thank you again for listening and

20:37

we will see you next week .