How Measuring Key Performance Indicators Can Improve E-Commerce Strategy

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How Measuring Key Performance Indicators Can Improve E-Commerce Strategy - Part Two

How Measuring Key Performance Indicators Can Improve E-Commerce Strategy - Part Two

Why time spent on your site is important

All websites regardless of type should measure this KPI, simply because all websites can use it as a gauge to see how compelling their offers are as well as check web site performance. It doesn't matter whether you're running a content portal or an e-commerce sales operation, time spent on your pages is an important metric to measure. If you have for instance a commerce site you need to know how long your offers hold your audience.

Time spent on site is also another KPI that warns you when things aren't going well.

Why you need warning signals

Life is full of warnings. Your body warns you with pain when there is something you shouldn't be doing. If you don't exercise enough and sit in front of a computer screen for too long you get muscle aches and pains, or a repetitive strain injury. That's your body telling you to do more physical stuff or else!

Similarly if you twist or turn too quickly and strain a muscle, it's your body giving you a not so gentle reminder that you should either stop overextending yourself or feel pain.

You begin to naturally learn that doing something you shouldn't equates to pain, therefore you do your best to steer clear from the discomfort. Notice how the body gives you a taster? If you have been sitting too long in one position you get tired and achy? It's your bodies natural "kick up the backside" to suggest that you get up and move around for a bit or you'll really get yours later on!

Look at web site KPI's as a potential taster of some real pain, the signals that you use to guide your thinking about getting out of your chair and doing something.

What is the real pain?

The real pain is when you spend thousands on advertising to drive website traffic and convert very few of them to your goal. Or you spend countless hours modifying pages and don't have a clue whether any of the changes you're making have any effect. When all you do is look at the bottom line improvement this is quite often what happens.

In all business websites you should want to identify advertising, products, and areas of your site that generate the highest value visitors or interest over the long term. If the time spent on your is too short, your copy, graphics, or usability likely needs to be re-written or re-designed to be more compelling.

When is the time spent on the site too short?

Initially you need to figure this out before setting a base KPI. What we have done in some cases is time how long it takes to complete an action.

If you want someone to subscribe to your site how long does it take to do that in seconds? This then becomes your base KPI. If the majority of people stay on your site for longer than that period, then you're happy and your KPI is telling you that you're doing a good job. If the majority of people aren't sticking around long enough to actually subscribe then it's a warning signal that something is wrong and you could be headed for pain.

Your KPI will depend on the main action you wanted them to take. You could use these guidelines for each kind of website;

Lead Generation/Subscription, how long it takes in seconds to complete the sign up form.

E-commerce/Sales, how long it takes in seconds to purchase the product.

Content/B2B advertising, how long it takes in seconds to find and read an article.

Customer Service, how long it takes to satisfy the customer query.

We typically advise getting someone not connected to the website to do a short usability test and the average time taken be set as a KPI if the result was good.

What if the average time taken is too long?

When you have determined the minimum time spent on the site you should also pay attention to whether people are taking too long reading your pages. It could be that your users are becoming frustrated and can't find what they need on your site. Time spent on site in combination with page views per session gives you a more complete picture of whether people are finding what they need.

Summary - The Complete Picture

Putting the KPI's together and understanding why you're doing it is the key to defining metrics which you can use to help you make decisions. If you start to think about what a good visit is, what a bad visit is and determine which metrics define a good and bad visitor you're half way to getting the KPI's you need. By defining the KPI's before you start you can begin to get a more complete understanding of what works and armed with this information can improve your website based on what your visitors are telling you.

Author: Steve Jackson, Editor - Conversion Chronicles

Steve Jackson is CEO of Aboavista, editor of The Conversion Chronicles and a published writer. You can get a free copy of his e-book sent to you upon subscription to the Chronicles web site (http://www.conversionchronicles.com).

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