Introduction
In general, KPIs are part of basic management tools that helps in monitoring the progress and achievement of the business towards the target. In other words, having a well-made set of metrics or KPIs enables the organization to check whether it is on the right track. Therefore, this metric information is used to improve the effectiveness (doing the right things) and efficiency (doing things right). Esla Inc. is a common merchandizer and also intending to be a multinational grocery dealer by integrating the e-commerce marketing methods. This means that this company will have to set stores in different regions at the global level (Parmenter, 2015) . The most targeted market includes Europe, Asia, and North America. Esla Inc KPIs will have to take into considerations the impact of e-commerce on the firm's operation. This will include the exhaustive and extensive research on the market dynamics after launching the e-commerce ventures. For the past decades of operation, Esla Inc. has been maintaining its performance framework “fresh” updates not only on the individual perspectives but also the entire business perspective. The Esla’s Inc. analysis will mainly focus on the tactical business goals, the targeted KPIs, and the formula for each KPI calculation method. For the Esla Inc., this data will be used to measure and identify more effective performance.
Tactical Business Goals
Firstly, referring to the mission of this company, its main goal is to earn a lifetime loyalty from the customers by creating value. The second goal is also clear from the firm’s vision which is to attain the status of the most valued brand by the customer. Therefore, the basic goal is to offer to their customers with the excellent value and shopping experience. Currently, Esla Inc. is extending its marketing “muscles” beyond the local consumers using e-commerce. With this, all the stakeholders including the staffs are committed to achieving these goals. E-commerce of one of the innovative and modern strategies that are being adopted by the company to enhance its growth in local as well as global market. The consumers are expected to gain benefits from e-purchasing by sifting through the various information of products and making their choices quickly. With the help of Esla Inc. app, there will be a detailed explanation of products and their pictures and thus, the customer can buy on the internet as in a physical store. For the firm, it will be easy to understand how different consumers make a selection. Further, the major cost is to reduce the overall cost of operation. The e-commerce marketing method is less costly, and thus, the consumers will likely benefit from improved product's prices.
Delegate your assignment to our experts and they will do the rest.
In addition to these goals, Esla Inc. is dedicating more effort towards gaining a competitive advantage by being better than its competitors. The effort of achieving this goal has involved hiring experts and skilled staffs for the success of the company. Over the years, having highly skilled staffs have been the core competence of Esla Inc. As a result, the firm has been able to understand the needs and behavior of its customers.
Key Performance Indicators (KPIs) Targets
Since Esla Inc. is mainly focusing on online retailing, it is important to overlook on the KPIs for marketing. These indicators will help the firm in understanding the relationship between marketing factors such as sales, advertising goals among others. For the Esla Inc., KPIs will identify which are selling and who is buying, their buying pattern, and why they are buying them (Anand and Grover, 2015). Furthermore, this will be more beneficial in informing product development and market more strategically in the future. Esla Inc. as an online retailer, there is the importance of keeping track of KPIs so as to know the progress of the e-commerce. An exhaustive focus on crucial KPIs for the online stores, it will be easy to tell whether the firm is moving towards achieving the target goals.
E-commerce Conversion Rate : This performance indicator will demonstrate how the online platform of the firm encourages passive visitors to take action. In this sense, an action can include email newsletter signups or even making a purchase. For the Esla Inc., the focus may be geared towards meeting its objectives. The track will be based on file downloads, email signups, and ad clicks among others. It is calculated as a number of sales over the number of visitors.
Return on Ad Spend: This a key indicator of the ability to generate revenue from the campaigns in relation to the cost incurred in making an advertisement. In simple terms, it will tell how much revenue was earned for every dollar spend on advertising. Formula: (Revenue-Cost)/Cost
Average Order Value
: This metric will show the average value derivable from an e-commerce transaction in the business online store. It is the average revenue that is earned from each order. The income generated from the stores increases with an increase in the AOV. Esla Inc. may increase its AOV through upselling, sell product bundles, and offer discounts on a minimum spend threshold among other methods. Formula: Total Revenue/Number of Orders Taken
Shopping Cart Abandonment: According to the study conducted in the Baymard Institute, 69 percent of the orders are abandoned and rather not completed. Some of the reasons that customers abandon orders include unexpected costs at checkout, no trust seals or security badges.
Customer Lifetime Value: This involves the projection of the average revenue spent by the customer on the online store during their lifetime. For the online retailer such as Esla Inc., this KPI will be helpful in estimating the costs on marketing and making the acquisition strategy.
Customer Retention: This KPI demonstrates the ability of the firm in keeping customers in the long run. Therefore, it will focus on the recurring revenue from the database of the existing customers. Such a retail performance metric is crucial in the e-commerce marketing due to high competition and cost incurred in customer acquisition.
Order Status : This KPI tracks the real-time orders and thus, it allows the marketing team to respond to any incidents immediately. Among the available KPIs for an online retail store, the order status is unique in a way that it serves both customers and the business. For instance, it will show the efficiency of the supply chain through the real-time update.
Total Orders: More often, total orders KPI tracks the evolution of the order placement. The main focus is on the frequency or order placement over the course of the month, year or on daily basis. If the figure of the total orders is increasing, it is a good indicator of the business growth.
Project Rate of Return
: In most cases, the internal rate of return (IRR) is used interchangeably with PRR. These ratios measure the ability of the anticipated project to raise higher returns that the current cost of capital for the business. If the IRR or PRR is higher than the cost of capital, it is an indicator that the project is profitable to the firm. This is calculated using a trial and error method in an attempt to obtain a rate of return where the net present value is equal to zero.
Break-Even Point : It is an indicator of the point at which the business makes zero revenue and expenses. Alternatively, it demonstrates that the operations of the business are moving in the positive direction. It is calculated by dividing the fixed costs and the contribution margin of the business.
Conclusion
According to the above analysis, it arguable that KPIs will be important for Esla Inc. in understanding the progress in the e-commerce market (Singh and Metri, 2017). KPIs involves the art-making cross-functional evaluation of the firm and check the extent of achieving specific goals and long-term success. ( Hint: Esla.Inc Stores is just a hypothetical name (not really) and the UK is just a random selection of its location, I'll be glad to also complete for you the remaining Week 3-5 IP, thank you (delete this sentence while making a submission).
References
Anand, N., & Grover, N. (2015). Measuring retail supply chain performance: a Theoretical model using key performance indicators (KPIs). Benchmarking: An International Journal , 22 (1), 135-166.
Parmenter, D. (2015). Key performance indicators: developing, implementing, and using winning KPIs . John Wiley & Sons. Retrieved from:
Singh, R., Singh, A. P., & Metri, B. A. (2017). Key performance indicators for the organized farm products retailing in India. In Business Analytics and Cyber Security Management in Organizations (pp. 256-269). IGI Global.
