In a data-driven world, you need to understand how to measure the success of your business model. Employing appropriate KPIs for B2B e-commerce marketplace helps marketers to qualitatively and quantitatively evaluate the progress of their marketing models and also assists them in making more informed, data-driven, less risky, and profitable business decisions.
Pearl Zhu, the author of “Digital Master” book series, illustrates the importance of KPIs in transforming organizational performance:
“Selecting the right measure and measuring things right are both art and science. And KPIs influence management behavior as well as business culture.”
The most successful e-commerce businesses have been defining and measuring the vital KPIs for B2B e-commerce marketplace.
Appropriately choosing KPIs for B2B e-commerce marketplace helps assess the critically important numbers to address your business bottom-lines and other critical areas such as risk management and customer satisfaction.
The point is nothing is immeasurable including customer satisfaction, organizational flexibility, the performance of your individual employees and teams, cybersecurity risks, and cybersecurity ROI.
You just need to pick up the right KPIs for B2B e-commerce marketplace to tell the stories of the digital magic that you have created online.
In this blog we will describe 10 important KPIs for B2B e-commerce marketplace that will help you evaluate even the value of even the intangibles in your business:
1) Sales Conversion
Let me put it very simple and straight, first things first, your sales conversion rate can be arguably the most important KPI on your e-commerce metrics dashboard.
In simple words, your sales conversion rate can be defined as the total number of sales made per user that visited your website, expressed as a percentage.
This important KPI for B2B e-commerce marketplace is an indicator of the efficiency of your sales team to convert leads to paying customers.
After evaluating their sales conversion rates the marketers can start working on conversion rate optimization (CRO), which would ideally involve tactics to fix the leakages in the sales funnel and doing everything possible to optimize the audiences’ experiences and thereby the conversion rates.
This KPI also plays an important role in aligning your sales and marketing teams. Looking at this KPI allows both the sales and marketing to collaborate and work together to improve the quality of leads.
Read more on 5 Essentials of B2B Sales and Marketing Alignment
You can make these simple changes on your website to optimize your sales conversions:
- Speed up your website loading time and ideally try to keep it up to 2 seconds, especially be very mindful of your product pages.
- Promote high-quality images of your products and stick to a transparent pricing policy.
- Optimize your product listings with the help of keywords and,
- Optimize the landing pages on your website
Tracking sales conversions allows you to work on strategies to optimize website conversion rates. Marketers can increase revenue per visitor, acquire more customers, and can eventually make their businesses flourish.
2) Website Traffic
Your website traffic is established by the number of visitors that visit your website and the total number of pages they visit.
Website traffic refers to the web users who visit a website and the amount of data they send and receive on a website.
In general, the quality of traffic on your website increases the opportunity to acquire quality leads, and hence website traffic is amongst important KPIs for B2B e-commerce marketplace. With quality leads come more customers that help in increasing your business.
There are a lot of strategies to increase quality traffic on the website including:
- Promotion of your products on social media platforms
- Optimization of your website for search engines
- Growing the number of your newsletter subscriptions
3) Repeat Visits
A visit by someone who has already been to your website anytime in the past is called repeat visit. A repeat visit is also recorded under the total visits and hence often to calculate the unique visits we have to subtract repeat visits from total visits.
Your repeat visitors often know what they want and these are the people who usually tend to be in the final stages of their respective buying cycles.
Encouraging repeat visits on your website not only multiplies the chances of prospective sales but also helps you gain more trust from your prospective and existing customers. Also, often the total number of repeat visits is associated with the quality of your website traffic, whether relevant to your prospective clients or not and whether engaging or not.
A subset of repeat visitors is comprised of your repeat customers. Measuring a repeat customer rate allows you to conclude what percentage of your customers are buying multiple times. This determines the success of your customer service and is an excellent indicator of brand loyalty.
4) Email Opt-in Rate
Email Opt-in Rate refers to the total percentage of your website visitors who subscribe to your email list.
Once your prospective and existing customers are explicitly willing to receive mass emails, newsletters, and other forms of communication from you it implies that they are interested in your products. They may end up buying from you and in the long term become loyal to your brands.
You can increase your email opt-ins by:
- Creating Valuable and Compelling Content.
- Implementing the ‘Live Chat’ functionality to Generate Leads.
- Use of the Popup Forms.
- Creation of Compelling CTAs.
- Capitalizing on Social Media Ads.
- Publishing Gated Content.
Increasing your email opt-in list and nurturing them helps in optimizing the down-the-funnel conversions, and hence this is amongst the important KPIs for B2B e-commerce marketplace.
5) Customer Lifetime Value (CTV)
Customer Lifetime Value (CTV) is amongst primary KPIs for B2B e-commerce marketplace and helps in understanding your customers besides predicting the net profit attributed to the entire future relationship with a particular customer.
Customer Lifetime Value is the summation of the average transaction amount of a customer, his annual purchase frequency, and the expected years of relationship.
Your CLV acts as a benchmark when deciding on how much you should spend to acquire new customers and how long they should be retained.
In general higher the customer lifetime value, the greater the profits. Remember, acquiring new customers is always more expensive than retaining existing ones. Moreover, CLV is also used to calculate customer equity.
In order to increase your CLV, you can increase your Return on Advertising Spend (ROAS) for your repeat purchasers, segment your customer lifetime value and recalculate extended customer lifetime value, improve your average order value and encourage your existing customers for repeat purchases.
6) Average Order Value
This refers to the average value of each purchase made in your store. Tracking your average order value can help in analyzing how you can encourage your customers to spend more while buying from you. You can analyze the complimentary offers to promote.
To increase your average order value, you can:
- Upsell your customers complementary items that may complement their primary purchases.
- Offer combo packages with discounts.
- Offer free shipping on purchases exceeding a bare minimum amount.
7) Customer Acquisition Cost (CAC)
Your Customer Acquisition Cost (CAC) is the average cost of gaining a customer, including everything from marketing and sales costs to the cost of maintenance of office setup and staff members.
CAC can also be calculated by different sources such as different traffic channels, search engines, social media, or from email lists.
In general, the focus should be on minimizing the Customer Acquisition Cost (CAC) while maintaining the quality of website prospects acquired. Following tactics help:
- Improve your conversion rate.
- Optimize your advertising campaigns and make them cost-effective.
- Invest in optimizing the organic channels for traffic acquisition including SEO and Social Media Marketing (SMM).
- Invest in referral marketing so that more customers are drawn to your website.
8) Churn Rate
This one is next up amongst the important KPIs for B2B e-commerce marketplace as it measures the rate at which customers stop doing business with an entity. This includes the subscribers who might discontinue their subscriptions after a particular time period.
Churn rate measures the turnover of the customers. Measuring this KPI allows you to work on strategies to delight your customers and provide them with seamless experiences across omnichannel.
Engaging and educating your customers, targeting the right audiences, and offering incentives and better services are some of the ways to decrease your churn rate.
9) Refund and Return Rate
An extraordinary increase in the refund and return rates can prove to be limiting factors for your e-commerce website.
Generally, easy refunds and returns are stimulations for your customers to buy without a second thought. Marketers should learn to use returns and refunds to drive their business and while returns and refunds should, as a rule, be hassle-free, they shouldn’t be happening because of the poor quality of your products.
Return and Refund Rate is amongst the B2B e-commerce KPIs that allows you to analyze the health of your store. Trace if your refund rate is spiking from a specific section of your store. Try connecting the dots and introspect any retrogressive trends.
10) Net Promoter Score (NPS)
Net Promoter Score is an index in the range of -100 to +100 that conveys the willingness of a customer to recommend the products or services of a company to others.
This B2B e-commerce KPI acts as a proxy for gauging customers’ overall satisfaction with a company’s products or services and with customers’ loyalty to the brand.
Net Promoter Score is the difference between the percentage of Promotes and Detractors. It can be calculated by following the steps below:
Step 1: Design an NPS survey and enter all the survey responses in an excel spreadsheet.
Step 2: Classify the respondents as Detractors, Passives, and Promoters.
Step 3: Add up the total responses from each group.
Step 4: To get the percentage take the group total and divide it by the total number of responses.
Step 5: To get the final NPS score, subtract the total percentage of Detractors from the total percentage of Promoters.
Different industries have different scales of what might be good or bad NPS scores for them.
NPS is amongst the most important KPIs for your business as it reflects the quality of your products, your customer service, and customer experience. It is an incredibly important metric for measuring customer satisfaction and loyalty.
NPS score gives powerful insights and beyond the measurement of customer loyalty is also indicative of the likelihood of gaining new and repeat business. NPS helps forecast business growth, cash flow as well as provides an assessment of the health of your brand and overall customer satisfaction.
Let’s Wrap Up
The Key Performance Indicators (KPIs) for your e-commerce business are universally important for all your departments. Deciding what to measure and how to measure is important and therefore KPIs should be relevant to your business. The KPIs described above are usually of high importance for all the B2B e-commerce business models. But again there is no hard and fast rule.
You can check your KPIs on weekly, monthly, quarterly as well as on over the year basis. Never hesitate from coming up with your own business KPIs to best address your requirements. Overall, the purpose should be selecting the KPIs that help you in analyzing and improving your business bottom-lines.
Valasys Media is a well-renowned name helping B2B companies with an array of services including lead generation lead nurturing, account-based marketing, list building services, contact discovery services, content syndication services, event promotion, appointment setting, business intelligence, and CRM services to help them optimize their revenue goals.
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