Using Holistic Business Metrics to Unlock B2B Ecommerce Value
Businesses have long used traditional ecommerce key performance indicators (KPIs) such as Conversion Rate, Average Order Value, Customer Acquisition Cost, and Customer Lifetime Value to measure the success of their ecommerce efforts. While these KPIs are useful in providing a general overview of the performance of an ecommerce platform, they fail to capture the full potential of ecommerce and its impact on the overall business. By using holistic business metrics, businesses can unlock the full potential of their ecommerce efforts and gain insights into how ecommerce can be used to improve the overall performance of the business.
What are Holistic Business Metrics?
Holistic business metrics are performance indicators that measure the impact of ecommerce on the overall business. These metrics are used to assess the impact of ecommerce on the business’s cost structure, customer retention rate, customer satisfaction, order processing speed, and the ratio of online to offline transactions. By using these metrics, businesses can gain a more comprehensive view of how ecommerce is impacting their business.
Cost per Transaction
Cost per transaction is a metric that measures the internal cost of processing an online or offline transaction. This metric can be used to measure the cost of sales performing order entry or the cost of customer service communicating order status with customers. By tracking this metric, businesses can gain insight into how their ecommerce efforts are impacting their cost structure and whether they are achieving the desired cost savings.
Customer Retention Rate
Customer retention rate is a metric that measures the percentage of customers that continue to purchase from a business over time. By tracking this metric, businesses can gain insight into how their ecommerce efforts are impacting customer loyalty and whether they are achieving the desired customer retention rate.
Customer Satisfaction
Customer satisfaction is a metric that measures how satisfied customers are with their ordering experience. This metric can be used to measure the impact of an ecommerce customer portal on the customer experience. By tracking this metric, businesses can gain insight into how their ecommerce efforts are impacting customer satisfaction and whether they are achieving the desired customer satisfaction rate.
Order Processing Speed
Order processing speed is a metric that measures how quickly orders are processed. By leveraging ecommerce, businesses can increase their order processing speed by integrating their ecommerce platform with their Warehouse Management System (WMS). By tracking this metric, businesses can gain insight into how their ecommerce efforts are impacting the total volume of daily orders processed and whether they are maximizing the billable shipments.
Online Transactions vs Offline Transactions
The ratio of online to offline transactions is a metric that measures the percentage of orders that are placed online versus those that are placed offline. By providing self-service to 80% of customers that provide 20% of the business’s revenue, businesses can optimize profitability and focus on improving personal service to the 20% of customers that deliver 80% of the revenue. By tracking this metric, businesses can gain insight into how their ecommerce efforts are impacting their customer base and whether their online to offline order ratio is maximizing the businesses profitability and customer satisfaction.
Conclusion
By using holistic business metrics, businesses can gain a more comprehensive view of how ecommerce is impacting their business. These metrics can be used to measure the impact of ecommerce on the business’s cost structure, customer retention rate, customer satisfaction, order processing speed, and the ratio of online to offline transactions. By tracking these metrics, businesses can gain insight into how their ecommerce efforts are impacting their overall performance and whether their offline/online investments are fully optimized.
