The B2B eCommerce space has become increasingly competitive, and for organizations to succeed, they must be able to measure the health of their eCommerce operation. To do so, companies turn to key performance indicators (KPIs) to provide insights on how their eCommerce platform is performing.
In this guide, we’ll explore the top KPIs for B2B eCommerce, defining each KPI and providing tips on how to track and measure each metric. We’ll also provide some information on the importance of each KPI, as well as how to use them to inform business decisions.
What is a KPI?
Let’s begin with a quick definition of what a KPI is:
A key performance indicator (KPI) is a measurable metric that is used to evaluate the performance of an organization, activity, or process. It can be used to measure success, as well as to identify areas where improvements or changes need to be made.
KPIs are an essential tool for monitoring the progress of an organization or a specific project. By tracking selected KPIs over time, companies can gain visibility into the performance of their eCommerce business and take the necessary steps to improve.
The Top KPIs for B2B eCommerce
Now that we’ve provided a basic overview of what a KPI is and why it is important, let’s take a look at the top KPIs for B2B eCommerce.
1. Conversion Rate
The first KPI on our list is conversion rate. This is the percentage of visitors who take a desired action. For B2B eCommerce, this would typically be the percentage of visitors who purchase a product or service.
To track this metric, it’s important to measure the total number of visitors to the eCommerce site and then divide that number by the number of conversions to get the conversion rate. It’s also important to note that this calculation may need to be customized depending on the nature of the eCommerce business and the actions customers are taking.
Conversion rate is a critical KPI for B2B eCommerce because it provides an indication of how effective the eCommerce platform is in turning visitors into paying customers. It’s also useful for understanding where tweaks and changes may need to be made to increase the rate of conversions and boost sales.
2. Cart Abandonment Rate
The next key performance indicator for B2B eCommerce is cart abandonment rate. This metric measures the percentage of customers who add items to their cart but then fail to follow through and complete the purchase.
Cart abandonment rate is important to measure because it provides insights into why customers may be abandoning their purchases. It can also reveal areas where improvements could be made to the customer experience, such as making the checkout process smoother or adding helpful customer service features.
3. Average Order Value
Another important KPI is average order value. As the name suggests, this KPI measures the average dollar amount of each order. It is important to track because it provides insights into the success of the eCommerce site in up-selling and cross-selling products and services.
Average order value can be calculated by dividing the total revenue generated by the number of orders. It’s important that organizations also track any discounts or special pricing that might have been involved in the calculation.
4. Customer Acquisition Cost
Customer acquisition cost (CAC) is the cost of acquiring new customers through both paid and organic channels. This KPI is helpful for understanding the cost of customer acquisition and the overall return on investment (ROI) of each channel.
In order to calculate CAC, companies need to measure the cost associated with each customer acquisition channel, such as paid advertising, referrals, or organic search traffic, and then divide that number by the number of new customers acquired.
5. Customer Lifetime Value
The last KPI on our list is customer lifetime value (CLV). CLV is the estimated revenue that a customer is expected to generate over the course of their relationship with a company.
Having a clear understanding of CLV is essential for measuring the success of an eCommerce business. It helps organizations identify their most valuable customers and makes it easier to calculate the ROI of different marketing activities.
CLV is calculated by taking the customer’s expected lifetime value and subtracting any acquisition costs associated with acquiring that customer.
KPIs are essential for monitoring the performance of a B2B eCommerce business. By tracking the top KPIs for B2B eCommerce, companies can gain visibility into their operations and use the insights to make informed decisions that will improve their overall success.