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What’s this and how does it benefit your business?
If you work in e-commerce, you’ve probably already heard the word “key performance indicators (KPIs)”. But what are they and why should you care?
KPIs are measurable values that tell you whether your online business is doing fine or not. They’re like milestones towards your success. Based on your business model, KPIs can be values like the number of orders in a given month, total revenue, gross margin, and so on.
Monitoring them is the only way to get a precise idea of whether you’re achieving your goals. Most importantly, a thorough understanding of your KPIs lets you make decisions based on real data about your customers, not on your gut instinct.
With accurate KPI monitoring, you’ll identify the strategies that work and those that don’t. So you can use the ones that work over and over again, and stop wasting time and money on those that don’t work.
For example, if you published two ad campaigns on different platforms, KPIs let you figure out which one was the most successful. So the next time you can only invest in the most successful platform.
Let’s say you published a one-month campaign on Facebook Ads in April and a one-month campaign on Google Ads in June. In July, you go check your report. In April, the number of orders and unique customers was roughly the same as the other months. But in June, you see a sudden spike with more orders and more unique customers. Your revenue increased, too.
Of course, next time you’ll pass on Facebook Ads and maybe you’ll increase your Google Ads budget, to get even more orders, new customers, and revenue. Ultimately, using your KPI metrics in a smart way will make you earn more money.
This template makes everything easier by pulling data automatically from Shopify, your database, and so on. So you only have to worry about making sense of your data and driving smart insights from it.