Performance drivers

Specific performance metrics are used to evaluate and improve the efficiency and effectiveness of a process. Key performance indicators (KPIs) are a special type of performance metric which indicate the overall performance of a process or its sub-processes. An example of KPIs for an online electrical goods retailer is shown in Figure 4.9. Improving the results from the e-commerce site involves using the techniques on the left of the diagram to improve the performance drivers and so the KPI. The KPI is the total online sales figure. For a traditional retailer, this could be compared as a percentage to other retail channels such as mail order or retail stores. It can be seen that this KPI is dependent on performance drivers such as number of site visits or average order value which combine to govern this KPI. Note that the definition of KPI is arbitrary and is dependent on scope. So, overall conversion rate could be a KPI and this is then supported by other performance drivers such as engagement rate, conversion to opportunity and conversion to sale.

A further objective-setting or metrics framework, the online lifecycle management grid, is presented at the end of the chapter as a summary since this integrates objectives, strategies and tactics.

Figure 4.9 An example of a performance measurement system for an e-commerce electrical goods retailer

Source: Friedlein (2002)

Figure 4.9 An example of a performance measurement system for an e-commerce electrical goods retailer

Source: Friedlein (2002)

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