KPI – Key Performance Indicator
A quantitative measure reflecting success toward business goals. eCommerce KPIs: CR, AOV, LTV, CAC, ROAS, Churn Rate. Every business needs 5-7 core KPIs — not 50.
In practice
A good KPI drives action. 'Sales' is not a KPI — it's an outcome. 'Product page CR' is a KPI because you can act on it. When everything matters, nothing matters.
Common misconception
'More KPIs means more control.' The opposite is true. A store with 40 KPIs can't focus. Amazon operated for years with a single North Star metric.
How to fix it
KPIs don't reflect reality? (1) Check they're measurable (available in GA4), (2) check they're actionable, (3) remove KPIs that look good but don't drive decisions, (4) every KPI needs an owner, a target, and a frequency.
Example
A clothing store with 35 KPIs — every marketing meeting took 3 hours. They narrowed it down to 6: CR, AOV, CAC, LTV, Repeat Rate, NPS. Meetings dropped to an hour, revenue rose 28% within a quarter.
Priority
Define 5-7 core KPIs now and review them weekly. Rule: every KPI needs an owner, a target, and a frequency.
Related terms
Keep learning. Metrics that touch the same area:
- North Star MetricAnalyticsA single metric that represents the business's true growth and the value it delivers to customers. Amazon: number of Prime products available. Shopify: partner GMV. A store: customers who bought more than twice.
- ConversionAnalyticsA desired action a visitor takes — a purchase, sign-up, form submission. The basis for measuring marketing success.
- Conversion Rate (CR)AnalyticsThe percentage of visitors who completed a desired action. Average: 1-4% for purchases, depending on category.
- ATC – Add To CartAnalyticsThe action where a visitor adds an item to the cart. Average ATC rate: 8-10% of product page visits.
- Cart AbandonmentAnalyticsA customer added an item to the cart but didn't complete the purchase. Average: 70-75%. One of the biggest opportunities.
- Open RateAnalyticsThe percentage of recipients who opened the email. Average: 20-25% in eCommerce.
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