Friday, 11 August 2006

KPIs for an Online Retail Site

The Online Retail or an E-commerce site is the most advanced of all the types of website, as it is very critical for these sites that they get their sites absolutely right as both their top and bottom lines depends on the site’s performance. Though the KPIs could vary from one site to another, some of the basic and most commonly used KPIs of the ecommerce site are listed below:

  • Order and Buyer Conversion rate: is the Holy Grail of retail metrics and the leading indicator of change for retail sites. It is the Buyer or order/ Visitors.

  • Average Order Value: is the Total value of orders/ no. of order. A close watch on the average order value on a daily basis, over a period of time would show customer buying behavior and present opportunities to up sell and cross sell.

  • Average Revenue per visit: is the metric of Total revenue/ No. of visits. According to Jim Novo it is the "grand dame" of retail site KPIs. This metric distills all marketing, merchandising and site design efforts into one key question - Did we get revenue during this visit?

  • Average Cost per Conversion: helps in keeping a close eye on the per conversion marketing cost. It is calculated by Total cost/ conversion.

  • Average time to respond to email inquiries: creates an opportunity to delight and surprise your prospects and customers which usually positively impacts your overall customer satisfaction. It is calculated by Avg (Date+time of response - Date+time of inquiry).

  • Ratio of New to Returning visitors: is New visitors/ returning visitors. This metric gauges the mix of visitors on the site and compare that to marketing efforts

  • New and Returning Visitor Conversion Rate: Helps managers set expectations about visitor acquisition efforts. It is Conversion from new visitors/ No. of new visitors, etc.

  • Percent of Revenue from New and Returning Customers: Will give a complete picture of customer purchase behavior. The percentage is calculated by (Revenue from new/ no. of new customers x 100). The classic case where this metric could help is, when the site-wide AOV declines slightly, causing senior strategists to panic. The good mid-tier strategist will hopefully be able to report that while AOV is down slightly, sales to new customers are up overall, shortening the sales cycle and improving overall site profitability.

  • Home Page and Key Landing Page “Stickiness”: Often time’s changes to key landing pages or audience targeting will cause a dramatic and unexpected increase in the number of visitors “bouncing” off your site as quickly as they arrive, thus increasing visits without increasing revenue.

  • Search to Purchase Conversion Rate: The Search function in a retail site helps shoppers quickly find the “right” products to purchase. This metric shows the relevance of the search results to what the shopper is looking for. (Orders from search/ No. of searches ) This KPI is important to track because good search functionality has been shown repeatedly to help drive purchases and any significant decline in your site’s order conversion rate may be tied to problems with search relevance or results presentation.

  • Percent Low Recency Visitors: According to Jim Novo, recency is the most powerful predictor of whether or not a customer will repeat an action. The lower the recency of visitors, greater will be the likelihood they’ll make a purchase. Percentage of visitors who have been to the site recently (total number of visitors in a given time frame/ overall visitors to the site). Jim novo uses the RFM model to determine the lifetime value of the customer by scoring each individual customer in a file of customer transactions against all other customers based on the "most Recent Date of Activity (Recency) and the "Highest Total Activity (Frequency) on a scale from 55 (highest) to 11 (lowest). I will try to elaborate on this KPI in my future blogs.

  • Cart and Checkout Completion Rate: This compliments the order conversion rate, to know quickly whether any measured decline can be attributed to the carting or checkout processes on the site. No. of orders/ Number of visitors (page views of) to cart.

  • Order Conversion Rate per Campaign or Campaign Type: Helps you to identify which marketing activity yields the highest returns, and an opportunity to optimise the same. This KPI is calculated by No. of orders from campaign type/ No of PVs (clicks) from campaign type (can be used for channels, position, ad unit, creative, etc.)

  • Effect on offline sales: This could be the relation of the website that could be linked to offline sales that could be sourced through the following:-
    o Unique toll-free numbers
    o Store locator
    o Order printout

Tuesday, 1 August 2006

KPIs? Keeps us Ponderings & Investigating, eh..?

In this industry the most common and frequently used buzzword is the KPI or the "Key Performance Indicator". Rightly so because it gives us the ability to measure accurately, predict and forecast customer behavior and hence has earned the new media the edge over the others in the recent times.

KPIs are quantifiable metrics which reflect the performance of an organization (in our industry website) in achieving its goals and objectives. The concept emanates from the principle “What gets measured, gets managed”.

Umh... Now that we know what a KPI in Web Analytics is, it brings us to which ones to choose. There are so many standard KPIs and Metrics, how do you decide which one is for you?
To answer this in short - "It Depends"

Depends on;

- Who is our audience?
- What are they trying to accomplish?
- How well are we helping them get the job done?

While a KPI can be either a count or a ratio, it is frequently a ratio. While basic counts and ratios can be used by all Web site types, a KPI is infused with business strategy - hence the term, “Key” — and therefore the set of appropriate KPIs typically differs between

- Site type KPI:
E-commerce, content, lead generation & customer service
- Process type KPI:
Reach, Acquisition, conversion and retention

However most sites would have overlapping business models, and would also require customized KPIs. This is where an experience consultant would be able to help. In the coming blogs, I shall elaborate on the various most commonly used "Site Type KPIs".

Thursday, 27 July 2006 there anything more than Numbers?

It is general perception that "Web Analytics" is all about numbers. But numbers on their own do not add any value unless they are fitted into a context.

Eric Peterson in his book "Web Analytics Demystified said that “The numbers on their own are less interesting and less informative than changes in the numbers over time.” . However this is just one aspect of web analytics. The other and the most important one being to infuse critical business objectives/ goals into identifying, tracking, reporting and analysing the numbers.

So ultimately this boils down to the following 2 most important criteria while analysing web analytics data, they are:

1. To choose the correct, accurate and comprehensible numbers with context. The context could be time period, segments, sections, formats, etc.


2. The business goal/ objective that the task will achieve thereby adding value and ensuring ROI to the business.

The companies that have realized that web analytics is all about measuring and forecasting customer relationship with the business have benefited a great deal. This brings us to the next level in web analytics eCRM, which is extending the knowledge of web analysis to all other points of contact with the customer apart from the digital medium. And the task of integrating these two disparate data and knowledge to deliver better and add more value to the customer and also to enhance the businesses bottom line, credibility and brand value.

Tuesday, 27 June 2006

Web Analytics - Elevator Pitch

Many a time, we are posed with the problem of explaining our core area of business or competency in a nutshell or within 3 minutes depending on the number of floors in the building. In my case this elevator pitch is invariably on web analytics. Though there are many aspects in web analytics, but the aspect most of them are interested in is how will web analytics benefit my Business or Organization.

Any organization big or small has a website, sometimes the website becomes the core business or it supplements the business that they are in. E-commerce or retail sites exist only because of their websites or are content sites whose lifeline is their url. There are businesses which is increasing by the minute, who are looking at the internet to supplement or source the leads and hence marketing becomes their core focus and other business that are trying to reduce cost and increase efficiency by developing self service/ customer service models on their websites.

When business are investing so much money in the websites, they ideally should also spend effort, time and money on analyzing how the website is contributing towards the business goal. Its common knowledge that "What gets measured, gets managed" in web analytics we need to add a suffix to this adage which is, "What gets measured accurately, get managed properly" and follow it up with "What gets managed well, will increasingly result in value and efficiency".

Hence my elevator pitch on web analytics has been "monitoring and reporting of website usage to make business understand the complex relationship "What are user action on the website" and "the offering of the website" and use the continuous insights to accomplish the predetermined objectives/ goals of the business.

Thursday, 15 June 2006

WAW Event turns into a WOW Event

I was pleasantly surprised by the number of people who signed up, came to the event and participated actively in the presentations, group discussion and Q&A sessions. In fact the event paved way to next two event sponsorships, topics for the forthcoming events and patronage from the participants.

By all means The "Web Analytics Wednesday" (WAW) Event held yesterday (June 14th) in Bangalore was a big success. The participants were web analytics or allied professionals from major corporates such as Fabmall, HP Invent, Intel, Mphasis, Webex, Tesco, Malayala Manorama, etc. The audience appreciated and welcomed the event, and it was decided that it would be regular quarterly event. Further the group will be active in the web analytics forum as well to keep abreast on the developments in the field of “Web analytics”.

The topics that were presented were “Data Proliferation in Web analytics” by Seby Kallarakkal working in Nabler. And the second presentation was by me (Jaisri Chety from Regalix Inc) on “Web Metrics and Business KPIs”. This was followed by a question & answer session and group discussion.

Web Analytics Wednesday is a global effort to put "faces with names" and to get local members of the web analytics community networking, updated and share & enhance their collective knowledge on Web Analytics. This is the Indian chapter of the “International Web Analytics Forum” started and moderated by “Eric Peterson” under the patronage of “Web Analytics Association”

I started the event and the forum to spearhead web analytics discussions and knowledge sharing in India. The newly formed group will focus on: -

- Increasing awareness and usage of web analytics and web analysts in India.

- Convene, meet and share knowledge every quarter (or more frequently if possible)

WebTrends” the acknowledged global web analytics market leader sponsored the Event. For more than twelve years, WebTrends is now leading the category into Marketing Performance Management. It enables thousands of web-smart organizations to easily improve campaign performance and web site conversion as well as build stronger relationships with their customers.

You can download the presentation on WebMetrics & Business KPIs from here. Download

Wednesday, 14 June 2006

Finally the D-Day is here


Its been a great experience till here - to the D-Day of the "Web Analytics Wednesday" Event in Bangalore. There were the usual package of pleasant and not-so-pleasant surprises. One surprise that I need to inform you all about is there will be a small delay in the start time. Instead of 6:00 pm the event will commence at 6:45 pm. I am sorry for the inconvenience.

It is exciting as well as a little intimidating, that usually happens with a stage event. However, we are all set to go live in a couple of hours from now.

For all those who will be there - looking forward to meeting you all.

And those who will not be able to make - don't worry, I shall update all the presentations/ topics in this blog.

Monday, 12 June 2006

Venue fixed at last

After almost a month of planning and working on the event, we finally have a venue. I am looking forward to meeting you all at:

Location: Royal Orchid Central Bangalore, 47/1, Dickenson Road, Bangalore-560042 (in Manipal Center - Off MG Road)

Date: 14th June

Time: 6:00 PM

  • Welcome/ Introduction
  • Topic Presentations
  • Cocktail & Dinner
For those of you who will not be able to attend the event, I shall be updating the discussion/ topics presented here (in my blog). You can bookmark this page and comeback here for the updates.



Friday, 2 June 2006

Topic selection for WAW - 14 June

Conducting an event, small or big has its own challenges. For this particular event "Topic Selection" has been the most difficult task so far. After a lot of elbow grease, I have arrived at these 4 topics for the event:

  1. Data proliferation: multiple sources, reports, and integration - Integrating with marketing and consumer data
  2. Segmenting for better understanding of customers, your website, usability, buying behavior, and everything else.
  3. Understanding business goals well enough to know what to measure; and connecting Web metrics to business key performance indicators
  4. Finding, hiring, and training qualified people on the correct use of Web analytics data (including training internal resources and team members on how to use the data to make decisions)
Thanks to Jim sterne, who had already articulated my thought process in one of his article's in "Clickz", that gave words to the topics that I had in mind.

My personal favorite is "Segmenting" (2) and "Data Proliferation" (1), one which is the topic that I will be working on and presenting in the Meet.

If any of you are interested in presenting any of the above mentioned topic or have any other interesting topic in mind, please get back to me at the earliest to help us prepare the agenda.

Looking forward to making this event a success and a forerunner to many more that would follow.

Wednesday, 31 May 2006

Web Analytics meet on 14 June, Banaglore


This blog is started with the sole purpose of reporting the new developments and happenings in the field of Web analytics in India. Web Analytics in the recent times has become quite a buzzword. We shall in the coming few weeks try to look at this hype and hoopla.

To begin with we are starting with a long awaited "Web Analytics Wednesday" event in Bangalore on the 14 the of June. As on today there are 6 people who have registered for the event. I shall be discussing the topics and the discussions taking place in this event in a more elaborate fashion. Till then it is going to be just campaigning for the registrations for the event.

Please go ahead register for this exciting event today in and refer it to all those who you think are relevant audience.

Look forward to whole new chapter in the field of Web Analytics take shape in "Web-Scapes".