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December 7, 2022

A Data – Driven Approach – KPIs that Work for Amazon Sellers!

Data-driven decision-making is a process that helps you identify the key performance indicators (KPIs) that best describe your business. It also helps you identify the metrics that best reflect the impact of the changes you’re making in your business. It’s an analytical approach to decision-making that requires data.

Instead of that, how do we get this to work in the real world? What do you measure? More importantly, how do you make sure that the metrics you choose are actually relevant to your business model? In this blog post, we’ll explore some common KPI mistakes that many sellers make. We’ll look at how data-driven approaches can help prevent these issues from happening.

Time Stamps

[00:43:43] What is Data – Driven Approach To Managing An E-Commerce Business?
[01:45:70] Data Driven vs Data Informed is Better
[02:51:15] Why Does Data-Driven Decision-Making Matter?
[07:52:73] The S.M.A.L.L. Framework
[12:40:56] KPIs You Need For Your Business
[15:54:78] Are Revenue Targets A Good Plan?
[19:10:33] Industry Benchmarks for Gross Margins
[21:57:07] For the “Leveraged”Business – KPIs
[27:29:95] Have 1 KPI Per Marketing Person
[31:56:01] Data Drive U: Services

This article will cover:

  • Why data-driven decision-making matters
  • How we can put in place a data-driven approach?

What are some of the ways that you can use data to make better business decisions? How will this help your ecommerce business grow?eCommerce


What is a Data-Driven Approach to Managing an e-commerce businesss ?

A data-driven approach to managing your e-commerce business is about using facts and figures to make decisions. This is better than just relying on your gut instinct. The process involves collecting data, analyzing it and making decisions based on the analysis.

The Data-Driven Approach has three main steps:

  • Collecting data in a systematic manner;
  • Analyzing and interpreting the collected data. We are look fordecision-making meaningful insights for better decision making; and finally,
  • Using those insights to improve marketing strategies, customer service or other areas of your e-commerce business. Data-Driven

Data-Driven vs Data-Informed

Why Does Data-Driven Decision-Making Matter?

Data-driven decision making is an important part of any business. It allows you to make better, more informed and more accurate decisions—which in turn leads to more effective business processes.

The reason it’s so important is that good data gives you the insights needed to make smart choices. The choices could be about your product or service development, or marketing and sales strategies. Either way, your choices can dramatically impact your bottom line.

The problem is that most companies don’t have the right tools in place to get their data and turn it into actionable insights. And those that do often find themselves drowning in an ocean of information. As a result, they waste time trying to figure out what their customers really want. Worse still, they make decisions based on bad data.

More Data Doesn’t Mean Better Decisions!

You don’t need MORE data per se. Rather, you need better and more relevant data that can help you make better decisions. More data doesn’t mean better decisions!

Data can be misleading – It’s important to understand how your customers are using your products and services. But understanding the customer journey is only half of the equation when it comes to using Amazon KPIs. You may, for example, place too much weight on negative reviews. You need to have context or perspective on why something happened in the first place (if you’re able).

Data can be misinterpreted. How many times have we seen people get fired up over something that turned out to be false? The same thing goes with sales numbers. One set of results from one customer won’t tell us enough to generalize safely.

How Do We Install Data-Driven Decision-Making?

You start by understanding what type of data you should collect. You must tailor this to the size and stage of your business. Jeff Sauer created a framework called SMALL data to help you determine what is best for a business of your size.

  • S- Solo – A business with 1 team member – you should just have 1 main KPI, probably sales! Profit and cashflow metrics are also important.
  • M – Micro – a business with 2 to 3- team members. At this point, we can afford to think about awareness and lead generation as well as sales.
  • A – Agile – a business with 4-5 members. We can add in lead capture and nurture into the mix now we have enough people to manage all the funnel
  • L – Leveraged – 5-10 team members, contractors and specialists. By this stage – and only then! – we can afford to have many funnels running beside each other.
  • L – Leading Edge – 10+ Team members with a cutting-edge team. By this stage you have many objectives.

The ACES Framework

The ACES Framework is a framework that includes 4 stages of the marketing funnel:

Awareness, Capture Intent, Educate and Nurture, Sales and Leads.

You’ve probably heard of this before. These are the stages you go through when someone starts to learn more about your business or product. The idea behind it is that you need awareness of your product before they can even think about buying it (or clicking on a link). Once they see something from you enough times or hear about you from someone else, you may be able to get their email address (capture the lead). Then they are ready for you to educate and nurture them. After this, finally, they might be ready to buy a product!

Solopreneur/micro-business focus

If you’re a solopreneur or micro-business, the most important thing to do is focus on one metric. This is going to be your North Star: the thing that keeps driving you forward and helping you make decisions about how to divide up resources.

In this case, we recommend focussing on the bottom of the funnel – the “Sales and Leads” part of the ACES framework:

You must focus on cashflow and profit at this stage. Revenue is part of what leads to profit but not a metric to place above profit!

Map out your strategy

As the saying goes, to fail to plan is to plan to fail. In business, it’s no different. The first step in building a data-driven approach is to map out your strategy. You must clarify what you are trying to do. What are your goals? How will you measure them? How can you improve them? And finally, how do we rank order our efforts so that we focus on what matters most?

Once you have an idea of your goals, it’s time to figure out what kind of data you need. What are the most important metrics to track? How do they relate to one another? And how can we leverage this information to drive change?

Have 1 KPI Per Marketing Person!

As a business manager, it is advisable to have one KPI per marketing person. This way you can track their progress and measure the success of their campaigns.

For example:

  • If you have an email marketing team, they should be given a set of KPIs around email only. They will measure how many people opened the email and what percentage of them clicked on the links within it, for example. You can also track how many customers bought from your website after clicking on one of those emails.
  • If you have an SEO webmaster in charge of optimizing your site for search engines such as Google or Bing, they will have different KPIs. They will track ranking in organic search results (SEO) for particular keywords.

About Data Driven U

Data Driven U is an online education company that helps companies make data-driven decisions.

Only those who make real-time decisions to resolve problems and issues in the right areas will succeed.

Effective KPI measurement is crucial for any company. But it’s especially important in e-commerce. The sales are irregular, customers are anonymous and competitors are plentiful. That’s a tough environment. And that demands a robust yet structured approach.

Data-driven decisions are a key component of successful online businesses. What does this mean? It means making data-driven decisions and using it to guide your actions, rather than relying on instinct and feeling. Amazon sellers need to do the same thing if they want to stay competitive in a crowded space.

Data-driven marketing is also becoming more common among Amazon sellers. Everyone looks for ways to optimize their efforts while growing their businesses.

Ecommerce metrics allow you as a seller on any platform (especially Amazon) see how well your products are performing on different levels: profitability per SKU (product), profitability per month/quarter/year etc… Looking at these numbers will help identify areas where improvements may be needed. That’s way better than waiting for problems to arise when cash flow becomes scarce!


And remember – Data-informed companies just make more money. So don’t neglect your data; nor should you get overwhelmed by it. Instead, start by identifying a very small number of well-chosen KPIs. Then commit to mastering managing those. If you commit to this practice, you’ll see a huge return on the effort and time in your business.


What services does Data Driven U offer?


  • SOP docs
  • Video training
  • Complete online flagship training courses including live instructors.

Today’s Guest

Jeff Sauer is the founder and CEO of Data Driven U. They help marketers get more comfortable with the data they need to make decisions.

Jeff was an agency owner for over a decade. He has data-driventransitioned to being a full-time educator. From teaching at university, Jeff now teaches online instead.

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