KPIs in Digital Business – 5 Tips for Measurable Success

KPIs for Digital Business Success — Source: Unsplash/ThisisEngineering

Data is abundant in the digital world. Companies gather, store and hoard it, but only a few really know how to use it. However, the right figures can be indispensable in helping you accurately assess your performance and uncover optimisation potential. What do you need to achieve this?

The right key performance indicators (KPIs)! Combined with the right strategy, these allow you to measure progress in your business processes and adjust your activities in accordance with your goals.

Find out in today’s article which KPIs play an important role in digital business and how you can strategically use them for your company!

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KPIs for Your Digital Business

Your KPIs: As Unique as Your Company

Whether it is product data, marketing campaigns or customer service quality: nowadays, nearly every business process is mapped and analysed digitally. You can therefore use KPIs to manage, adjust and optimise processes and activities in all company departments.

Benefits of KPIs at a Glance

At management level:

Identify developments on the basis of reference data
Simplify and accelerate planning and decision-making
Define goals more precisely based on data
Refine cost control and performance monitoring through clear allocation per channel and campaign
Detect errors faster and recognise critical situations earlier
Make employee development more transparent

At operational level:

Automate routine tasks to free up capacities for strategic tasks
Visualise progress and highlight correlations
Expand employees’ scope for decision-making

At process level:

Strategically select channels
Constantly optimise processes
Make processes more efficient

Exactly which KPIs are considered depends on various factors. Not only are companies and the challenges they face different, but even projects within a company have varying priorities. That is why different KPIs are important in each case – depending on the strategic objectives.

This is also true for direct competitors within the same industry: although a click rate of 5 per cent might be a disaster for your newsletter, another company might consider such a rate a success.

In other words: your KPI strategy is always as unique as your company. There are no universal solutions here.

5 Tips for a Successful KPI Strategy

Do not worry – we will not leave you in the dark when it comes to KPIs. Despite their individual nature, we can identify a few principles and provide tips for the successful use of KPIs in e-commerce.

Tip 1: Less Is More

The word »key« indicates that we are talking about a limited number of performance indicators. In this case, it is important to remember that less is more – a clever selection of KPIs is more important than the sheer mass of variables analysed.

Tip 2: The Right Questions Ensure Structure

A structured approach can help you determine which performance indicators are truly »key« to your business success.

Ask yourself the following questions:

Which new insights do you hope to generate with your KPI strategy?
Which sources provide the necessary data?
How can the data analysis process be efficiently structured and established?
Who in the company will receive which information on KPI development when?
Which to-dos result from this in the near and the more distant future?

Tip 3: Keep an Eye on the Most Important E-Commerce Figures

In e-commerce, there are KPIs such as net sales, conversion rate or customer lifetime value that allow you to evaluate measures at a glance and answer questions such as:

How high is the average shopping cart value at the time of purchase?
How expensive is the acquisition of new customers?
How many page views do the homepage or individual subpages record?

Tip 4: Stay SMART

Once you have decided on your KPIs, it is time to specify them. The SMART criteria will help you determine realistic figures:

Specific: Define the goals you want to achieve as precisely as possible
Measurable: Decide on specific figures that are verifiable
Achievable: Set realistic goals that you can actually accomplish
Relevant: The goals you set should be directly linked to the project’s success
Time-bound: Specify a realistic time frame for attaining the goals and regularly check that they are still achievable

Tip 5: Learn from Experts

Like so many things in the ever-changing world of e-commerce, your KPIs are not set in stone, so the iterative KPI process begins again and again. A real KPI must always withstand the question of why exactly this parameter should be used as one of the few »key« indicators. In this context, it can be very helpful to bring in external consultants who can provide a fresh perspective and initiate new ideas.

Performance Measurement for Modern E-Commerce: Download the White Paper for Free Now!

Those who want to be successful in digital business should be able to clearly define strategic objectives and measure the degree to which they have been achieved. KPIs are of crucial importance in this regard. Find out in our »KPIs in Digital Business« white paper what distinguishes KPIs from key figures and how you can find the right KPI framework to meet your needs.