Request input from your employees, advisors, and providers. But do not rely on them for all of the replies. Do your own research.
Where do you begin with this review? I will offer a framework in this report.
Key Areas to Review
- Shop traffic. Look at visits, unique visitors, page views, time on site, rebounds, along with other data and compare them to the previous year (2012). Divide down your investigation by quarter to spot current in addition to seasonal trends.
- Referral sources. Organic search engine referrals have declined for several online shops in the last two decades. It’s more challenging to track which keywords are sending you traffic. Get decent baseline amounts from 2013 to set new KPIs for 2014.
- Mobile traffic and sales. You have to be mobile friendly to be aggressive. Tablet friendly isn’t good enough. You require a smartphone friendly shop. Review your performance and look for ways to improve as the visitors from these devices is only likely to grow more dramatically this season.
- Revenue. Break it down by product line, new and repeat clients, referral sources. Start looking for the growth areas and the laggards.
- Gross and net margins. Can you meet the goals you set in the start of the year. Are you currently trending up or down? Do you have greater margins within a particular product group or customer segment?
- Inventory. It is too easy to assume that your physical inventory is true when you have an automated inventory system. Even in the event that you conduct spot checks to confirm your amounts throughout the year, it is better to take a real, thorough inventory at least once each year. This is an area virtually every ecommerce company can improve on. Most physical inventories lead to shortages. It’s far better to write them off now instead of later.
- Shipping costs. Take the time to understand if you’re losing money on transport; you probably are if you provide free delivery. Assess the effectiveness of your existing policies. Consider new offers or carriers.
- Personnel costs. It is early in the year. Are your labour costs in line with your budgets and profitability? Consider that workers will expect raises. Ensure to factor that into your annual budget.
- Providers . Determine the suppliers you’re spending the most money with. Are there any other sources that may be less costly? Can you buy in larger quantities to acquire higher discounts?
- Customer support outcomes. What direct feedback have you received from clients? What is your return rate? How many customer service calls were opened? How long did it take for you to shut them? What are your ratings and testimonials in third party marketplaces?
- Marketing effectiveness. Review your paid advertisements functionality, your email effectiveness, and your social networking analytics. Which contribute to visitors? Which contribute to earnings? Where do you see growth and attrition?
There are quite a few other KPIs that might be unique to your company.
- Create top 10 lists. List the top 10 things you did well in 2013. List the top 10 items that need improvement. Review those with your management staff. Give credit where it is due, then handle the things which need improvement. Establish new goals for all items and create a plan to satisfy those objectives. Ensure that you have systems in place to measure your own success. Ensure that you do so for both lists. Stretch your targets on the things you did well too.
- Produce new company objectives. There might be some overlap , but have some time to set new KPIs for 2014 for all your functional areas. Communicate them to your teams and ask them for input and support in achieving the new objectives. Like your top 10 list, make certain to set processes in place to track your progress.
- Create a budget. I know it’s painful, but make an annual budget and review it quarterly or monthly. A budget is truly only a KPI for you to measure your overall financial performance. Managing from a budget will let you identify trends quickly and act on problem areas. Without one, it’s easy to lose site of hidden costs and slow declines.
- Connect with your clients. Conduct a survey. Ask your clients what you can do to serve them. Ask them what products interest them and why they buy them from you or other shops. Learn what you can do to obtain more of their organization.
- Connect with your employees. Research your employees or speak with them one on one. Learn what motivates them and demotivates them. Ask them for ideas to help the provider’s performance. Ask them what you can do to allow them to make them more loyal and productive.
- Connect to your key suppliers. Most retail companies have a few important providers where they buy most of their products. Speak with your suppliers’ sales agents about the trends they see in their enterprise. Ask them what products they recommend you add to your shop. Ask them for bestseller lists. Probe ways to reduce your cost of goods sold.