24 May 3 Essential KPIs for B2C Companies
Our last post explored the eight KPIs (Key Performance Indicators) that B2B (Business to Business) companies should track when measuring the progress of their marketing program. Today, we’ll introduce KPIs in three key areas for B2C (Business to Consumer) companies: site traffic, conversions, and cart abandonment.
While the challenges that B2B and B2C companies face are similar, there is one major advantage that B2C companies have: direct access to the end consumer. This gives insight into customer habits on a level that isn’t always possible for B2B companies.
How to Determine and Track Your KPIs
As a small business owner who wears many hats, you are probably wary of adding another task to you to-do list. However, you’ll be surprised at how little time it takes to record and measure these stats. By knowing your business better, you can make informed decisions to increase profits.
B2C companies will want to track all of the KPIs we mentioned in our last post, plus the ones we outline below; we recommend month to month or quarterly tracking to get the most benefit.
This is an easy metric to measure with tools like Google Analytics. Here’s how to use this data to see what parts of your marketing plan are working:
- Total Sessions
This stat can be found in your Google Analytics dashboard under the main graph. You will see two numbers side-by-side: sessions and users. In a nutshell, these numbers tell you how many times your website has been accessed; you can also see how many returning visitors you have from loyal (repeat) customers. Having a good balance between new and returning users is essential to maintaining and growing your business.
Google’s terminology is a bit confusing, so here’s an easy way to interpret your dashboard:
- Sessions – The number of times your website is accessed.
- Users – The number of unique individuals coming to your website.
- Pageviews – The total number of views for your entire website; includes pages which were refreshed by visitors.
- Bounce Rate
Bounce Rate tells you how many people left your website after viewing only one page. As you can imagine, this stat can provide some interesting insights when you begin to explore bounce rate page-by-page (more on that in a second).
Bounce rate is measured by the number of single page sessions divided by the total number of sessions. The average bounce rate is between 41% and 55%, but your bounce rate may be higher if your website consists mostly of blog posts (blog posts tend to generate a lot of “single page sessions” when users follow a link to your blog, then leave after reading it).
In the Behaviors section, click on “Site Content” and then “All Pages” to see the bounce rate for specific pages (your site’s overall bounce rate can be viewed on the dashboard, as seen in the previous screenshot):
The default report will show you bounce rate for the most popular pages to the least, but you can also use the sort function to focus on a particular area of your website (for instance, the blog or a particular product section).
This data can help you identify which pages are converting well, and which ones aren’t. For example, standalone “testimonials” pages tend to have a high bounce rate, but if you combine specific testimonials to their corresponding product page, you’ll see a much lower bounce rate. Adding a stronger call to action (CTA) can help lower your bounce rate, but here are some other things to consider when evaluating an underperforming page:
- Does the viewer have all the information they need all in one place?
- Are the images clear, crisp, and engaging?
- Are there links to other sections of your website or suggested products, and if so, are they well-targeted to the content that is currently being viewed?
- Is the action you want the viewer to take clear?
With regular tracking of your bounce rate, you will quickly start to see what’s working (and what isn’t).
- Referral Traffic
When visitors come to your website through another website’s link to yours, that’s known as referral traffic. Social media posts, other industry websites, or potential brand advocates and influencers could all be sending traffic your way. By paying attention to this list, you can see which social media channels have the strongest audience for your brand, or if your participation in a specific event is generating interest. To turn this into a KPI, you may want to track specific referral sites. For example, if Facebook is important to you, you may want to see a certain percentage increase in referral traffic from Facebook per month or quarter.
- Organic Traffic
When visitors come to your website through a search engine, this is known as organic traffic (note: paid search is not included in this metric). Obviously, the higher this number is, the better optimized your website is – if people aren’t finding your business when they search for “hand dyed speckled yarn” (and that happens to be what you sell), that’s not good! Websites can improve their organic search metrics by implementing SEO best practices to increase the likelihood that their website displays in the first page of search results. Websites that are optimized for search engines can see a 300% boost in sessions over those that haven’t undergone optimization. In terms of tracking this number as a KPI, you’ll want to log the percent increase of organic traffic per month or quarter.
A conversion happens when you turn a site visitor into a paying customer. Many shopping carts track this information for you, so it’s just a matter of pulling this info into your benchmarking spreadsheet. Here are three conversion metrics to follow:
- Subscriber Conversion Rate
Seeing growth in your newsletter list is exciting as it means more people are “buying” into your content. While these subscribes may not result in an immediate sale, newsletter subscribers are more likely to convert into a sale later on. The hobby industry has an average open rate of 28%, which is much higher than other industries – clearly these customers are interested in what you are saying!
If you have a separate landing page for your newsletter signup, you can divide the number of subscribers who opt in through the page by the number of people who visited that page to calculate your conversion rate. If this number is low, it may be that your call to action (CTA) isn’t strong enough.
- Sales Conversion Rate
How many visitors actually make a purchase on your site? Sales conversions can be calculated by dividing the total number of unique visitors by the total number of sales in a given period of time. The average conversion rate for e-commerce in the US (as of Q4 2016) is 3%.
Google Analytics can help you analyze site traffic page by page to see which ones yield more sales. For the social side of things, UTM codes can help track which posts on what social media platforms are performing best for you. Once you’ve accrued several months of data, you can focus on creating content for your highest performing channels.
- Coupon Code Use
Coupon codes are a great ROI shortcut that’s easy to implement and track. For example, you could create unique coupon codes for each social media platform for a single campaign, allowing you to evaluate which ones drive the most sales to your site.
There are a number of ways to turn your coupon code campaign into a KPI: tracking the total number of redemptions, the total number of sales, or the ratio of sales to redemptions are just a few ideas. What works for your business may be different than what works for someone else’s. As you accrue more data, you can look for correlations between the success or failure of a campaign and other factors such as the nature of the offer or how and where you promoted it.
Shopping Cart Abandonment
You probably know this customer well – the one who loads up their cart but then never completes the transaction. For small business owners, it can be a confusing occurrence! While it may not seem like a positive KPI to track, it can be a great opportunity to improve your sales conversion rate.
Many e-commerce platforms track this number for you, and if your abandonment rate is high, you’ll need to start looking a few key areas to determine the root of the problem. Here are some questions you should ask yourself:
- Does the checkout process take too long? Is it hard to navigate?
- Are your shipping rates too high?
- Are your products priced competitively?
To combat cart abandonment head-on, think about targeting customers with an e-mail reminding them to finish their purchase. This type of email automation is effective in winning back customers 10-15% of the time, which can yield to thousands of dollars per year. You could also consider sending a short survey asking why they didn’t complete the sale while also offering an incentive to do so. For more tips on how to fight cart abandonment, read our 2-part series here: Part 1 and Part 2.
Though this is just the tip of the iceberg, taking the steps to track and measure these KPIs will bring you even closer to understanding your business and growing your profits.