What KPIs are important?

Now that we know what KPIs are we should examine what KPIs you should be tracking. This is not an exhaustive list, but rather is meant to be a list of metrics that most digitally focused DTC businesses should track.

Pageviews – Tracking how many times a page was viewed and is useful in determining which of your content or products is popular.

Sessions/Impressions/Visits – The number of people being measured for a specific outcome. So this can be seen as the opportunity for you to do business.

Total Revenue – This should be straightforward dollars in the door. You don’t have business without revenue.

Margin – The total amount of revenue left once you remove the cost of goods sold. This KPI provides additional context to revenue, by showing if it is profitable growth.

Lifetime Value – The predicted revenue of a customer over the duration of their relationship with your business.

Repeat/New Customers – Depending on your business model the mix of new vs returning customers carry different meaning. However, tracking this can determine if you are maintaining relationships with past customers and if your business is growing to a larger customer base(new customers).

Conversion Rate – Conversion can be tied to any outcome such as purchase or filling out a form. Conversion rate is a way to measure effectiveness of a page, offer, campaign etc.

AOV – Average order value is important to better understand customer order behavior.

Bounce Rate – A bounce is usually considered to be a person who visits and then leaves directly after their first interaction on your website. A bounce is seen as someone that didn’t find what they were looking for.

Discount % – Discounting can have an effect on customer behavior if used as an acquisition offer. Additionally, this metric provides extra context to revenue.

ROI – Return on investment is defined as (Revenue – COGS)/COGS. This simple measure can be used to determine the performance of a number of actions. For example, an ad campaign can be measured by the revenue it generates vs the cost of acquisition and the goods sold to create that revenue.

COA – Cost of Acquisition is a metric that when combined with LTV can tell you if you are acquiring profitable customers. 

The above list is not a complete list, but it does give you a substantial summary of your business activity through KPIs. As you move up the analytics value chain these KPIs will help to define a baseline which can be used to highlight areas that need improvement through high value projects like predictive analytics.