So, you’ve decided you want to unlock growth through better product experiences. How do you start? We’ve got just the thing. Welcome to 4 KPIs to measure PXM success, our first post in a series about developing the profession of PXM at your company.
We’ve been promoting the concept of PXM for more than two years now, and we see rapidly increasing interest in the subject.
C-level marketing and commerce executives tell us that PXM sounds incredibly promising as an approach to unlocking growth through better product experiences. But they also come to us with a common question — where should we start? And how do we measure our success?
As with any strategic decision or investment, it’s essential to know whether you are making progress. “What gets measured, gets managed,” as the old saying goes. In this article, we’ll discuss the PXM KPIs you should be tracking so you can evaluate your success and identify where to make adjustments along the journey.
Because the objective is to unlock growth, the most obvious KPI is revenue. But this can be driven by many factors: raising prices, opening stores, adding sales channels, expanding catalogs and assortments, entering new markets, and more. With better quality product data, complete product listings, and other enhancements, the product experience should be significantly better. This improved experience should drive more conversions, so conversion rate is the right KPI to track — that way, you don’t muddy the waters by including revenue from new items, new markets, broader market reach, and other tactics.
Of course, PIM and PXM ensure a great experience from the start and certainly make it easier to expand and adapt catalog catalogs, sell cross-border, and more. But to see the results of a PXM investment, you need to start from something you know, such as sales conversion rate on your eCommerce site, and measure the increase as time goes on. If you’re operating in a multichannel environment, it’s also important to consider each channel’s conversion rates and track how they improve. These might vary from channel to channel for a variety of reasons, so if you’re struggling with varying levels of quality product information on each channel, measure your progress on each one. That way, you can make decisions about where to invest for the best return.
Rate of product returns
By initiating a PXM practice, you get better product data, which means you convert more shoppers to customers. Increasing the number of customers buying from your site, however, can also cause your product return rate to rise. Some of this return volume can be chalked up to buyer behavior, but according to many analysts, nearly two-thirds of returns result from retailers’ mistakes.
These mistakes include low-quality, incomplete, or inaccurate product information or assets, which leave shoppers with the wrong impression or idea of what they purchased. So, look at your current return rate overall, and if you track return reason, be sure to pay close attention to what percentage of purchases are returned because of bad product data. If your PXM practice is a success, you should see both the total number of returns and the number of returns made due to incorrect or incomplete product information plummet.
Constantly changing new trends and shifting customer demand means your product catalog and assortment are never finished. Instead, your catalog is always changing to accommodate unique and emerging needs and desires from your customers. That means you need to be able to pivot and update your catalog quickly, without allowing errors in product information to reach your customers.
Time is money, and your PIM should be helping you make more money by accelerating your time-to-market and giving your products more selling days. Two crucial KPIs to track the efficiency and effectiveness of your PXM initiative are the time it takes your teams to add new products to your catalog and how often you can update or adapt product information.
A good PXM practice should also reduce the cost of getting products ready for sale. This is a time-consuming and expensive process, especially if you’re using an outdated or poorly-suited tool to collect, manage, enrich, govern, and distribute this data.
With the right PIM solution in your PXM practice, it should become much easier and far less expensive to enrich and manage product information. Track your enrichment costs as a PIM KPI as you look to measure the impact PIM is having on your organization. Your enrichment costs should fall sharply as PIM helps you eliminate inefficiencies and decreases your team’s manual workload.
Using PXM KPIs to measure success
These are just a few of the critical KPIs you should use to measure the benefit of your PXM practice. You can choose to get even more granular in some of these areas depending on your business. But start with these, begin your PIM implementation, and use the results to calculate your ROI.