KPI in Whatsapp Commerce

WhatsApp Commerce has become one of the important tools in today’s digital marketing strategy. With over two billion active users worldwide, WhatsApp offers great opportunities for businesses to interact directly with their customers. The main advantage of this platform is its ability to provide a personal and instant communication experience.

Measuring the performance of campaigns in WhatsApp Commerce is not as simple as counting the number of messages sent or read. This is where the importance of Key Performance Indicators (KPI) comes into play. KPI in WhatsApp Commerce are metrics used to assess the effectiveness and efficiency of marketing campaigns and customer interactions through this platform. Without monitoring KPIs, it is difficult to determine whether the implemented strategy is successful or needs adjustments.

This article will discuss various important metrics or KPIs that should be monitored in the context of WhatsApp Commerce. Through a deep understanding of these KPIs, you will be able to optimize your marketing strategy, enhance customer experience, and ultimately increase business revenue through the WhatsApp platform.

What is KPI and Why is it Important in WhatsApp Commerce?

KPI or Key Performance Indicators are metrics used to measure the effectiveness and performance of various aspects of a business. In the context of WhatsApp Commerce, KPIs serve as very important measurement tools to assess the extent to which your marketing strategy has successfully achieved the established goals.

Definition of KPI in WhatsApp Commerce

KPI in WhatsApp Commerce has two main functions:

Measurement of WhatsApp performance: Determines how well marketing campaigns and interactions with customers are conducted through this platform.
Improvement of business strategies: KPIs help identify areas that need improvement and optimization to achieve better results.

Main functions of KPI

KPIs have several important functions in business, including:

Formulating Business Strategies: By analyzing data from KPIs, you can make more accurate data-driven decisions to improve the effectiveness of your marketing campaigns.
Measuring Campaign Effectiveness: Provides insights into how well messages and offers are received by the audience, allowing for quick adjustments if needed.
Identifying Weaknesses: Helps identify areas where the business may be less effective, allowing you to take corrective action immediately.

By regularly monitoring KPIs, you can not only ensure that your WhatsApp business strategy is on track, but also continuously improve customer experience and revenue potential through this platform.

Key Metrics to Monitor in WhatsApp Commerce

1. Revenue per Conversation (RPC)

Revenue per Conversation (RPC) is a metric that measures the revenue generated from each conversation with customers on WhatsApp. This metric is crucial for measuring the effectiveness of your business interactions with customers through this platform.

Definition and How to Calculate RPC

To calculate RPC, use the following formula:

{RPC} = {Total Revenue from Conversations} / {Number of Conversations}

For example, if the total revenue generated from conversations is Rp 10,000,000 and the number of conversations is 5,000, then the RPC is:

RPC = Rp 10,000,000 / 5,000 = Rp 2,000

Good RPC Benchmark

The benchmark for RPC can vary depending on the industry and type of campaign being run. However, some general references indicate that a good RPC usually falls within the range of €1.50 to €2 or more. Some campaigns even achieve more than €3 per conversation.

Knowing this benchmark helps you determine whether the performance of your WhatsApp Commerce campaign meets expectations or needs improvement. By regularly monitoring and analyzing RPC, you can create more effective strategies to increase revenue through conversations on WhatsApp.

However, it is important to remember that not all conversations will result in sales. There are times when customers make returns of goods in transactions, which can affect total revenue and ultimately RPC. Therefore, it is also important to monitor other metrics such as the return rate of goods in order to obtain a complete picture of the performance of your WhatsApp Commerce campaign.

2. Return on Campaign Spend (ROCS)

ROCS or Return on Campaign Spend is a metric that measures the return on investment from marketing campaigns on WhatsApp. ROCS is very important because it provides an overview of how effective your campaign is in generating revenue compared to the costs incurred.

To calculate ROCS, you can use the following formula:

{ROCS} = {Campaign Revenue} / {Campaign Cost}

For example, if your campaign generates €1,000 in revenue with a cost of €200, then your ROCS is 5x.

The ideal target ROCS to achieve usually ranges from 6x to 8x. Some very successful campaigns can even reach returns of up to 155x. Monitoring ROCS helps you assess whether your marketing strategy is efficient and provides a good ROI (Return on Investment). It allows you to allocate your budget more wisely to the most effective campaigns.

When RPC and ROCS are monitored together, they provide deep insights into the profitability of each conversation and overall campaign in WhatsApp Commerce.

3. Click-Through Rate (CTR) and Open Rate

Click-Through Rate (CTR) measures the percentage of people who click on a link in a WhatsApp message compared to the number of messages sent. To calculate CTR, divide the number of clicks by the number of messages sent, then multiply by 100 to obtain the percentage. For example, if there are 15 clicks out of 100 messages sent, the CTR would be 15%.

Open Rate describes the percentage of messages opened by recipients compared to the number of messages sent. To calculate the Open Rate, divide the number of messages opened by the number of messages sent, and then multiply the result by 100. A high Open Rate, usually above 90%, indicates that the content of the message is interesting to the audience.

Both of these metrics are very important for the success of marketing campaigns on the WhatsApp platform because:

Indicates Customer Engagement: High CTR and Open Rate indicate that the campaign content is relevant and interesting to customers.
Measures Content Effectiveness: These metrics help you understand how well the campaign content drives user actions.
Campaign Optimization: Data from CTR and Open Rate can be used to adjust marketing strategies for greater effectiveness.

Monitoring CTR and Open Rate is crucial for improving campaign effectiveness in WhatsApp Commerce.

4. Opt-Out Rate

The opt-out rate in the context of WhatsApp Commerce refers to the percentage of users who choose not to receive messages from your business anymore. This metric is very important because it provides insight into how customers respond to your communication on this platform.

Monitoring the opt-out rate helps maintain a good relationship with customers. If the opt-out rate is high, it can be a sign that the content of the messages is not relevant or that the frequency of delivery is too frequent. Therefore, understanding and managing the opt-out rate is key to:

Improving Communication Quality: Filtering and improving messages to make them more relevant and engaging.
Optimizing Marketing Strategy: Adjusting the frequency and type of messages according to customer preferences.
Preventing Revenue Loss: Customers who unsubscribe can potentially reduce the revenue generated per conversation (RPC).

By monitoring these metrics, including the opt-out rate, you can evaluate the effectiveness of your marketing campaigns on WhatsApp and maintain a positive relationship with customers.

5. Number of Conversations

The number of conversations that occur with customers is a crucial metric in WhatsApp Commerce. It indicates how actively your business interacts with customers, which can directly affect Revenue per Conversation (RPC) and Return on Campaign Spend (ROCS).

Here are some important reasons why the number of conversations should be monitored:

Measuring Interaction Volume: The number of conversations provides an overview of the volume of interaction between businesses and customers. The more conversations there are, the higher the chances of increasing sales and customer loyalty.
Customer Engagement Indicator: A high number of conversations indicates a good level of customer engagement. This means that your marketing messages are receiving positive responses, reflected in higher Click-Through Rate (CTR) and Open Rate.

The number of conversations can also help identify weak points in communication with customers, such as slow response times or other technical issues. By consistently monitoring this metric, you can take proactive steps to improve the effectiveness of your campaigns on WhatsApp.

Response Metrics and Customer Satisfaction in WhatsApp Commerce

1. First Response Time

First Response Time is a metric that measures how long it takes for a business to provide the first response to a customer after they have sent a message. This metric is very important because it can be an early indicator of the quality of customer service provided.

Why is it important?

Improving Customer Satisfaction: Customers tend to feel more valued and satisfied if they receive a quick response.
Reducing Churn Rate: Quick responses can prevent customers from switching to competitors because they feel ignored.
Building Trust: Fast responses also help build customer trust in your business.

A good target for first response time:

To be considered efficient customer service, the target first response time should be between 6 to 15 seconds. This indicates that your business is prompt in handling customer inquiries or issues, increasing the likelihood of further positive interactions.

Example calculation:

If your business receives a message from a customer at 10:00 AM and provides the first response at 10:00:10 AM, then the first response time is 10 seconds.

Providing fast services like this requires:

Employee Training: Ensure that the customer service team is trained to respond quickly.
Automation Systems: Use bots or automation systems to immediately answer common questions.

By monitoring and improving the first response time, you can ensure that every customer receives quick and quality attention, creating a positive user experience from the very beginning of their interaction with your business.

2. Average Response Time

Average Response Time is a metric that measures the average time taken by an agent or customer support team to respond to messages from customers after the first message is received. This metric is important in the context of business communication on WhatsApp as it reflects the efficiency and speed of service provided to customers.

To improve Average Response Time and make customers feel more satisfied, there are several strategies that can be implemented:

Agent Training: Providing training to agents to respond to messages quickly and effectively.
Use of Chatbots: Utilizing chatbots to handle common questions so that agents can focus on more complex issues.
Real-Time Monitoring: Using real-time monitoring tools to see response performance and make immediate adjustments.
Effective Shift Scheduling: Organizing agent work schedules optimally to ensure there is always enough available workforce during peak interaction times.

Improving the Average Response Time not only increases the Customer Satisfaction Level, but also strengthens long-term relationships with customers through positive shopping experiences.

3. Customer Satisfaction Level and NPS (Net Promoter Score)

Customer satisfaction is a key factor in the success of a business in WhatsApp Commerce. When customers feel satisfied, they are more likely to return for shopping and recommend your business to others. Measuring customer satisfaction can be done through direct surveys or collecting feedback from conversations.

NPS (Net Promoter Score) is one of the methods used to assess customer loyalty to your brand. NPS is calculated based on customers’ answers to the question: “How likely are you to recommend our products or services to a friend or colleague?” The results are then classified into three categories:

Promoters (score 9-10): Highly satisfied customers who have the potential to become loyal supporters.
Passives (score 7-8): Customers who are fairly satisfied but not enthusiastic.
Detractors (score 0-6): Unhappy customers who may leave negative reviews.

Using NPS as a KPI helps you understand the level of customer loyalty and which areas need improvement to create a positive shopping experience.

Conversion and Purchase Value Through WhatsApp Commerce

1. Chat-to-Purchase Conversion Rate

Chat-to-Purchase Conversion is a metric that measures the percentage of customers who make a purchase after engaging in a conversation on WhatsApp. This metric is very important because it provides direct insight into the effectiveness of your interactions with customers in influencing their purchasing decisions.

Practical Steps to Improve Chat-to-Purchase Conversion:

Personalized Conversations: Ensure that each conversation is tailored to the needs and preferences of the customers. Personalization can enhance customer comfort in transactions.
Quick Response: Fast response time demonstrates professionalism and attention to customer needs. The ideal target for the first response time is between 6 to 15 seconds.
Offer Exclusive Promotions: Provide special offers or discounts during the conversation to encourage faster purchasing decisions.
Clear Purchase Guidance: Provide complete and clear product information, as well as step-by-step guidance for the purchasing process so that customers do not feel confused.
Follow-Up: If customers do not make a purchase immediately, follow up later by offering additional incentives or simply asking if they need further assistance.

By implementing these strategies, you can increase the chat-to-purchase conversion rate and maximize sales potential through the WhatsApp Commerce platform.

2. Average Order Value (AOV)

Calculating the average order value (Average Order Value or AOV) is one of the important indicators in WhatsApp Commerce. AOV shows how much revenue is generated from each order placed through this platform.

How to Calculate AOV:

Total Revenue: Add up all the revenue from all orders.
Number of Orders: Count the total number of orders placed.
AOV Formula: Divide total revenue by number of orders.

{AOV} = {Total Revenue} / {Number of Orders}

For example, if your business generates €10,000 from 500 orders, then the AOV is €20.

Monitoring AOV helps you understand customer shopping patterns and assess the effectiveness of your sales strategies. This metric also plays a vital role in optimizing chat-to-purchase conversions and increasing purchase frequency. In other words, the higher the AOV, the better the sales performance on your WhatsApp platform.

Metric Analysis to Optimize WhatsApp Campaigns

Effectively using existing data is the key to success in optimizing your WhatsApp campaigns. Several data analysis methods can help you better understand customer behavior:

1. Customer Segmentation

Dividing customers into several segments based on metrics such as Revenue per Conversation (RPC), response time, or satisfaction level. This helps in targeting more specific and relevant campaigns.

2. Trend Analysis

Monitoring changes in metrics over time. For example, does the Click-Through Rate (CTR) increase after changing the message or offering a special promotion? This analysis can provide insights into what works and what needs improvement.

3. Cohort Analysis

Grouping customers based on when they first interacted with your business on WhatsApp and tracking their performance metrics over time. This can provide insights into customer retention and loyalty.

To optimize your marketing campaigns based on the results of metric analysis, here are some practical tips:

Message Personalization: Use segmentation data to send more personal and relevant messages to each customer segment.
Optimize Message Delivery Time: Analyze when your customers are most active on WhatsApp and send messages during those times to increase Open Rate and CTR.
A/B Testing: Test different versions of messages, offers, or images to see which one yields the best results. Use this data to continuously improve your campaigns.

With the right data analysis methods and the implementation of metric-based optimization strategies, you can significantly enhance the effectiveness of your WhatsApp Commerce campaigns.

Conclusion

Monitoring metrics or KPIs in WhatsApp Commerce is not only important but crucial for the success of your marketing campaigns. By understanding and optimizing metrics such as Revenue per Conversation (RPC), Return on Campaign Spend (ROCS), Click-Through Rate (CTR), and others, you can improve the effectiveness of your business strategies on this platform. Focusing on quick responses and customer satisfaction as key performance indicators will help build strong relationships with customers and drive revenue growth.