In this modern technological era, every aspect of a successful business relies on good data. It is through the effective collection and analysis of data that you can measure how well your business is performing in various areas. To achieve this, you first need to identify the Key Performance Indicators (KPIs) that you will be focusing on.
In the world of B2B eCommerce, this applies 100%. If you know the right KPIs to focus on, you can accurately measure the progress your business is making. You can then use this information to make more informed decisions. If you take a look at eCommerce businesses that are doing well, you will realize that they are employing effective KPI metrics for their B2B eCommerce marketplace.
When businesses choose the right KPI metrics for their B2B eCommerce marketplace, critical issues that require attention will be identified quickly, allowing the business to excel in crucial areas such as customer satisfaction and risk management. In this article, we will take a look at the various KPI metrics for B2B eCommerce marketplaces.
What are KPI metrics for an eCommerce store?
The KPI metrics for B2B eCommerce marketplaces simply translate to measuring the performance of different areas of your eCommerce store that can be quantified. KPIs are crucial as you can identify the areas in which you are doing well and the areas that require improvement. With this information, you can formulate strategies that will drive your revenue and boost profitability.
There are several KPI metrics for B2B eCommerce marketplaces and it is important that you understand these metrics and point out the ones that can drive your sales and help you reach more customers. Visit the Virto Commerce blog post and see some of the essential KPI metrics for your eCommerce store. Here are some of the top metrics you can focus on.
A conversion rate in B2B eCommerce refers to the number of customers that actually make a purchase after browsing through your site and checking out the available products. Knowing your conversion rate will tell you if your marketing strategies are working and how effective your methods for reaching customers are. The conversion rate is basically the percentage of conversions compared against site visits.
Most eCommerce stores do not need to set up physical premises for selling goods but you will certainly need some storage space. If you end up keeping more inventory on hand than you need, it can cost you more than it should in terms of storage costs. That is why it is important to track the reorder rate to help you know the stock quantity you should have in stock.
On the other hand, if you do not track this essential metric, you might not have popular items in stock which can lead to you losing sales—and ultimately customers. The reorder rate is calculated by multiplying the average units of goods sold daily with the average lead time.
Customer acquisition cost
This is the average cost that has been incurred in acquiring one new customer over a specific time frame. It is found by adding up all the marketing costs and any other additional penny spent in converting a lead to a customer and dividing this number by the number of new customers. If this metric is close to zero and you are getting new customers, it implies that your existing customers are referring new people to your business.
If your business is in its early growth stages, this cost is usually quite high.