What is Scorecard?
The scorecard is a key performance indicator (KPI) tool used to measure key metrics of an e-commerce website. These are commonly referred to as website performance reports that allow a brand to understand and judge the efficacy of including specific tools and services in a website. It ideally influences the decision-making power of a business by highlighting only the necessary insights.
Significance of Scorecard in an E-commerce Shipping and Delivery
Sound decisions based on internal and external factors are critical to a successful business. A scorecard primarily influences those decisions by highlighting key metrics, allowing enterprises to calculate return on investment (ROI) from every associated service and make better decisions.
- ROI calculation: A scorecard can be used to underline a particular service’s impact on the profitability of a business. Business owners can easily denote the ROI generated from each such service using the mentioned KPIs. It allows a brand to determine services that negatively impact the growth of a business.
- Service optimization: A balanced scorecard can help a brand by underlining the poorly performing services. It allows business owners to improve the identified service or look for promising replacements.
Prerequisites of Scorecard and How It Works
Any e-commerce brand can make a scorecard without having to satisfy any prerequisite. However, business owners should focus on one specific service within a set period instead of all the metrics.
- Metric selection: Businesses that want to create a scorecard must select the metrics to be considered and optimized in the future.
- Creating a scorecard: The selected metrics are used to create a scorecard, where the contribution of each metric to a specific goal, such as conversions, is recorded and scrutinized accordingly.
Use Case with Scorecard
An e-commerce website in the Philippines had a monthly order rate of 1,000 units with a profit margin of 20%. The order rate was growing at a 10% rate each month. The owner used a scorecard to determine that social media advertisements (SMA) were responsible for most sales, while search advertisements performed poorly. Subsequently, the search advertisement was paused, and SMA was boosted. As a result, the monthly order rate growth increased to 18%.