Ecommerce OKR and KPI for Business
As an ecommerce continues to grow, it becomes increasingly important for businesses to effectively set and achieve their goals. OKRs and KPIs are two frameworks that can help eCommerce businesses achieve their goals. and track your performance. We'll take a closer look at what OKRs and KPIs are first, how they differ, and of course, how ecommerce companies can use these ratios to fuel their growth.
To begin with, what are OKRs and KPIs for your business in an ecommerce?
Objectives and Key Results (OKRs) and Key Performance Indicators (KPIs) are frameworks that help businesses define and measure their success, which are essential to eCommerce. However, there are some key differences between the two:
OKRs are a framework for setting and achieving goals that are arguably ambitious, measurable, and time-limited. They typically involve setting a specific goal, defining a set of key results that will indicate progress toward that goal, and regularly measuring progress toward those key results.
KPIs are a specific metric or set of metrics that are used to track and measure progress towards a specific goal or objective. KPIs are often used to measure performance in different areas of the company, such as sales, marketing or customer service, you've probably heard about all of the latter by now.
Both OKRs and KPIs can be used to drive growth in ecommerce businesses, but they have different strengths and weaknesses, so let's get down to business!
Using OKR in ecommerce
OKRs are particularly useful for e-commerce businesses because they provide a framework for establishing the aforementioned goals by setting specific goals, creating a clear roadmap to success, and ensuring that everything in the organization is pointing toward the same goal.
For example, an e-commerce company might set a goal of increasing sales by 50% in the next quarter. To achieve this goal, they would define a set of key results that will indicate progress toward that goal, such as increasing website traffic for example, or improving conversion rates and increasing average order value. By regularly measuring progress towards these key results, the e-commerce business can identify areas for improvement and make strategy adjustments. In digital markets this is essential. Another example is launching a new product line at the end of the year for placement in the store. To achieve this goal, it would be necessary to define a set of key results that will indicate progress toward that goal, such as conducting market research, developing a prototype, and launching a marketing campaign. By regularly measuring progress towards these key results, the ecommerce business can ensure that it is on track to launch the new product line on time and within budget.
Use of KPI in ecommerce
KPIs are especially useful for eCommerce businesses because they provide a way to track and measure the performance in different areas of ecommerce. By identifying the key metrics that are most important to their business, eCommerce businesses can gain insight into how they are performing and identify areas for improvement. And constant improvement is nowadays a necessity for a competitive ecommerce store.
For example, conversion rate is a KPI that measures the percentage of website visitors who make a purchase. By regularly monitoring this KPI, eCommerce businesses can identify areas where they might be losing customers and make adjustments to their website or marketing strategy to improve conversion rates. Additionally, the time value per customer is a KPI that measures the total value of a customer throughout the time they do business with an ecommerce. By monitoring this KPI, eCommerce businesses can identify areas where they might be losing customers and make adjustments to their customer retention strategy to increase customer retention.
According to a Deloitte survey, companies that use OKR are more likely to achieve their goals than those that don't. The survey found that 80% of companies using OKR achieved their goals, compared to 44% of companies not using OKR.
A study by McKinsey found that companies that use KPIs to track and measure performance are more likely to achieve their goals than those that don't use KPIs. The study found that companies that use KPIs were 20% more likely to achieve their goals than those that did not.
According to a HubSpot report, the average conversion rate for eCommerce websites is 2.86%. However, this varies widely by industry and the type of product being sold. For example, the average conversion rate for the fashion industry is 1.63%, while the average conversion rate for the electronics industry is 3.61%.
How can you grow your ecommerce through OKRs and KPIs?
Set clear goals: By setting clear and specific goals, eCommerce businesses can align their teams and prioritize their efforts. OKRs help companies set ambitious but achievable goals, while KPIs help measure progress toward those goals.
Identification of areas for improvement: By tracking KPIs, eCommerce businesses can identify areas for improvement in their sales, marketing, customer service, and other areas. This enables them to make data-driven decisions that improve their business processes and drive growth.
From our point of view at B2B Store, people are and will be the most important asset of any efficient company.
Improve customer experience: los KPI relacionados con la satisfacción del cliente, como Net Promoter Score (NPS) y Customer Effort Score (CES), pueden ayudar a las empresas de comercio electrónico a mejorar la experiencia del cliente. Mediante el seguimiento de estas métricas, las empresas pueden identificar puntos débiles en el recorrido del cliente y tomar medidas para mejorarlos. En Orienteed, we are completely on the side of our customers providing the latest technology and support.