KPI stands for Key Performance Indicators (sometimes also abbreviated as KSI for Key Success Indicators). It refers to performance metrics, which is just a buzzwordy way to say specific, targeted goals you set for your business based on both your unique selling situation and the data behind it. While we all want to increase sales and profits, a general goal is never more effective than a specific one and a good KPI helps you personalize your marketing, selling and management efforts to your specific needs. When you tailor your efforts with a customized goal, you eliminate wasted time and money.

Knowing that you should be setting KPIs for your business to focus your efforts is different than knowing what kinds of goals to set. Start looking at your e-commerce data in context and identify patterns and trends. While knowing exactly what KPI would be best to set for your business depends on your specific situation, let me walk you through some ideas and typical goals to give you a starting point. From the moment a potential buyer discovers visits your website to months after a sale, setting the right KPIs can guide you to make the most effective tweaks to lead to more sales, growth and customer retention.

Which KPIs are important at each step in the sales funnel?


  • Discovery

Someone who can’t find your business, can’t buy from it. From increasing your site’s discoverability through blogging and SEO optimization to paid ad campaigns, there are dozens of KPIs you can set to help bring more customers to your site. Discovery KPIs could be to increase the number of conversions for a given ad campaign, an initiative that encourages customers to leave reviews and testimonials, or a target quantity of SEO friendly blog posts for your keywords, whatever it takes to get more people to find your e-commerce site.

  • Encouraging new customers Will you focus on referral credits to encourage past customers to spread the word, offer discounts or incentives for joining your mailing list or diversify your inventory to attract a new demographic you’re trying to target? Whether you set a numerical goal of newsletter sign-ups, a percentage goal for sales from new customers or a key customer demographic or simply aim to have an offer once a month to encourage new buyers, KPIs can help focus your marketing efforts. When you set a goal based on metrics, you’re ensuring you’re doing the work to attract the customers your online store needs and wants, not wasting your time and money trying to attract the wrong people.
  • Browsing Once a buyer gets to your site, you’ve got to convert that visit into a sale or you don’t make a dime. Set KPIs designed to make more browsers into buyers and you’ll understand exactly what your business needs to grow. Should your focus be on decreasing the percentage of abandoned carts or increasing the amount of time browsers spend on your site, the quantity of products they view or the number of sales, combos and promotional offers you feature to encourage buyers to complete the sale?


Whether your focus is to increase the upgrades or additional service packages added during the checkout process, hit a target duration of total time from Add to Cart to Completed Checkout, increase mailing list sign-ups at the point of purchase or to have a percentage increase in the dollar value of all carts, once you know exactly what about your checkout needs your attention and set the relevant KPI, you can set a plan to move towards that goal. There’s a myriad of ways to up-sell your customers during the checkout process, but your metrics can guide you to the ones that would work best for your products and customers. When you know exactly what you’re trying to accomplish during those magic check out moments, you can take the appropriate action to increase sales.

Post Purchase

Once the sale is over, your work is far from over. You may realize you need to set a KPI for a target time of sale to shipment, a percentage of customers that return for repeat business or work towards decreasing customer service response time, quantity of returns because of breakage or mistakes or the overall cost of shipping or supplies. Even when you’ve made the sale, there’s money to be made and lost in the aftermath and KPIs help you pick up that slack in your bottom line.

Set KPI to focus your attention on the parts of your business that really matter

A KPI differs from other goals because it has the metrics to back it up and comes from an informed investigation of your real live business, not a test case. You can set a KPI for almost any aspect of your e-commerce business. A Human Resources KPI may focus on lowering employee turnaround or increasing moral while an Inventory KPI could focus on anything from restocking items faster or cheaper to balancing the percentage of sales coming from in house products versus third party or resell items. KPIs can be for anything from the highest levels of your business all the way down to your private goals. You can even set a personal KPI, for example to target the number of hours you wish you were working a week to help you discover new ways to be efficient and delegate. The more specific you make the goal, favoring exact numerical goals and deadlines whenever possible and realistic, actionable tasks, the more effective it will be.

Is your website delivering the results you seek? If your website is out of date, you could be losing out on sales. Our experienced team of web developers and designers can help you increase those KPIs! Contact us for a quote.


Pete Peranzo
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