Key Metrics for Ecommerce: 15 to Track

Tracking key ecommerce metrics allows you to see how your store performs, improve customer experience and increase sales. This post covers the 15 metrics to help you make data driven decisions and grow your online business.

Quick Summary

• Knowing your key ecommerce metrics means you can make informed decisions and optimize for better performance and customer satisfaction.
• Focusing on conversion rates, customer acquisition costs and customer lifetime value will boost sales and customer retention.
• Monitoring website performance, inventory and customer satisfaction scores is key to long term ecommerce success.

Understanding Ecommerce Metrics and KPIs

What are ecommerce metrics and KPIs?

Ecommerce metrics and key performance indicators (KPIs) are quantifiable measurements that help gauge the performance and success of an online retail business. These metrics encompass a range of key indicators such as conversion rates, average order value, customer acquisition cost, cart abandonment rate, and traffic sources. KPIs, on the other hand, are specific targets that a store aims to achieve, such as increasing average order value or improving customer satisfaction. By tracking these key metrics, ecommerce businesses can gain valuable insights into their operations and make data-driven decisions to enhance performance.

Why is tracking ecommerce metrics and KPIs important?

Tracking ecommerce metrics and KPIs is essential for profitability and growth. By monitoring these metrics, ecommerce businesses can identify areas for improvement, optimize their marketing campaigns, and enhance the overall customer experience. Ecommerce metrics and KPIs provide actionable insights that help businesses make informed decisions and drive growth. For instance, understanding customer acquisition cost can help in budgeting marketing expenses, while tracking average order value can guide strategies to increase revenue per transaction. Ultimately, these metrics are crucial for measuring ecommerce success and ensuring long-term sustainability.

Ecommerce Funnel Metrics

Discovery Phase Metrics

Discovery phase metrics track how potential customers find a website. These metrics include website traffic, social media engagement, and search engine optimization (SEO) metrics. Understanding discovery phase metrics is crucial for ecommerce businesses as it helps them identify how customers move through the buyer’s journey and what channels drive the most traffic to their website.

Some key discovery phase metrics include:

• Website traffic: The number of visitors to a website. This metric helps in understanding the reach and visibility of your ecommerce site.
• Social media engagement: The number of likes, shares, and comments on social media platforms. High engagement indicates strong brand presence and customer interest.
• SEO metrics: The number of keywords ranking on search engines, the number of backlinks, and the website’s domain authority. These metrics are vital for improving organic search visibility and attracting more visitors.

By tracking these metrics, ecommerce businesses can optimize their marketing campaigns, improve their website’s visibility, and drive more traffic to their website. This, in turn, can lead to higher conversion rates and increased ecommerce sales.

Ecommerce Metrics and KPIs

Key ecommerce metrics and KPIs are the lifeblood of any online store. These ecommerce metrics measure everything from store performance and customer behaviour to overall business health, giving you a total view of how your ecommerce business is performing. Knowing these metrics means you can make informed business decisions and optimize for better performance. They track sales performance, operational efficiency and customer engagement, so you can improve your online selling.

KPIs must be actionable and meaningful to drive business performance. Measuring these over time allows you to see trends and adjust based on customer behaviour. This continuous performance analysis means growth in online sales and a healthier business overall.

Aligning these KPIs to your business objectives means data driven decisions to improve your ecommerce site and customer satisfaction.

Conversion Rate Optimisation

Conversion rate optimisation (CRO) is the art and science of turning website visitors into paying customers. For ecommerce businesses a high conversion rate is the holy grail, it means your marketing is working and your user experience is good. CRO is about improving the percentage of visitors who take a desired action, like making a purchase, which directly drives sales growth.

Key metrics like sales conversion rate, add to cart rate and checkout abandonment rate are important for measuring and optimising this process.

Sales Conversion Rate

Sales conversion rate is a fundamental metric in ecommerce. It’s the percentage of visitors who buy and is calculated by dividing total orders by total sessions. The average ecommerce sales conversion rate is 2-3% but higher is always better. Monitoring this metric will help you identify issues with website functionality and user experience that’s stopping sales.

To improve your sales conversion rate try optimising page load times by using browser caching and optimising images. Shopify for example provides conversion funnel data that can help you analyse and improve each stage of the sales process. Fixing these will give a better user experience and higher conversion rates.

Add to Cart Rate

Add to cart rate is the percentage of visitors who add products to their cart. This metric is calculated by dividing total visitors by total number of shoppers who added items to their cart. Improving product descriptions and providing clear information will increase add to cart rate.

Measuring this metric will help you understand customer interest and improve the overall shopping experience.

Checkout Abandonment Rate

Checkout abandonment rate is a key metric that focuses on customers who start the checkout process but don’t complete the purchase. This rate will show you incomplete transactions and highlight issues in the checkout process that need to be fixed. A high checkout abandonment rate can cost you revenue so it’s important to track and optimize.

To reduce checkout abandonment simplify the checkout steps, offer multiple payment methods and be transparent with costs. Implementing strategies like cart management and urgency messaging will improve the user experience and get customers to complete.

Fixing these will improve conversion rates and overall sales.

Customer Acquisition Metrics

Key ecommerce metrics are important to measure the effectiveness of your marketing and adjust accordingly. Acquiring new customers is much more expensive than retaining existing customers so it’s important to track these metrics closely.

Key metrics in this category are Customer Acquisition Cost (CAC), traffic sources and social media engagement.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, all expenses related to attracting and acquiring a paying customer. This includes ads, production and staff costs. Understanding CAC is important as it shows how much effort and money it takes to get a paying customer. If CAC is increasing gradually it means ads are becoming less effective, you need to target better and segment your customers better.

You can optimize CAC through automated marketing and better targeting. Tracking revenue from ad spend will help you measure the effectiveness of your campaigns. Balancing CAC with Customer Lifetime Value (CLV) will keep your marketing cost effective and profitable.

Traffic Sources

Knowing your traffic sources is important to know which channels are bringing potential customers to your website traffic. The main traffic sources in ecommerce are direct, referral, organic and paid. Analyse these sources to measure the effectiveness of your online marketing and adjust for better performance.

This will probably mean you need to step up your SEO game.

Social Media Engagement

Social media engagement is a key metric that shows how your audience is interacting with your brand through social media and content. This engagement includes clicks, comments, likes and shares which shows customer interaction and interest. To improve reach and engagement businesses should run consistent campaigns on social media and email.

Active social media engagement will increase brand visibility and customer loyalty. Higher engagement will drive more traffic to the ecommerce site and overall performance.

Tracking social media metrics will help you refine your content and connect with your audience better.

Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) is a key metric that shows the total revenue from an average customer over their lifetime. Knowing CLV will help you know how much you can spend on customer acquisition and what are your most profitable products. Higher CLV means stronger brand loyalty and recurring revenue streams. To calculate CLV multiply average order value by purchase frequency and customer lifespan.

Segmenting customers with Recency, Frequency, and Monetary value (RFM) will help you identify your high value customers and target your marketing accordingly. Loyalty programs that reward repeat purchases will increase average order value and encourage customers to spend more.

Tracking and optimising CLV will help you allocate your resources better and focus on customer retention.

Average Order Value (AOV)

Average Order Value (AOV) is the average revenue per order and is calculated by dividing total sales by the number of orders in a given period. Tracking AOV will help you measure the effectiveness of your sales strategies and if your revenue maximisation strategies are working. Ways to increase AOV is to offer free shipping on orders above a certain amount, bundle products at a discount, upsell or cross-sell to customer interests.

AOV can differ by industry, higher priced products will naturally have a higher AOV. Increasing AOV will increase overall revenue without increasing the number of customers.

Customer Retention Metrics

Customer retention metrics, as part of the key ecommerce metrics, will help you measure how effective your retention strategies are and find ways to build long term customer relationships. These metrics will measure the success of your retention strategies and customer experience.

Key metrics in this category are customer retention rate, repeat purchase rate and churn rate.

Customer Retention Rate

Customer Retention Rate (CRR) is the percentage of customers retained over a period. It’s calculated by subtracting the number of new customers from the total number of customers at the end of the period, divide by the number of customers at the beginning and multiply by 100. Higher CRR means better customer satisfaction and loyalty. For product based companies the average customer retention rate is 63%. This percentage shows how well they are retaining their customer base.

To retain customers, businesses should invest in customer experience initiatives, loyalty programs and offer discounts for repeat purchases. Good customer service and personalisation is key to building long term relationships with customers.

Repeat Purchase Rate

Repeat Purchase Rate (RPR) is the percentage of customers who make multiple purchases, this will give you insight into customer loyalty. Measuring the time between purchases will help you understand purchasing patterns which can lead to promoting more frequent purchases.

Promote repeat purchases through timely email marketing and loyalty rewards will boost this metric.

Churn Rate

Churn rate is the number of customers lost over a period. It’s calculated by dividing the number of cancellations by the original number of subscribers. Higher churn rate means loss of interest in the business. To mitigate churn, businesses should measure churn rate regularly to identify lost customers and inform retention strategies.

Reducing churn can be done by engaging with customers more often, improve product quality and provide good customer service. Focusing on these will reduce churn and retain more customers.

Customer Satisfaction and Experience

Measuring customer satisfaction through key ecommerce metrics is essential to understanding how well an ecommerce business is meeting customer needs and expectations. Higher retention rates means customers are satisfied and will recommend the business to others, overall brand loyalty.

Key metrics like Customer Satisfaction Score (CSAT) and Net Promoter Score (NPS) will give you insight into customer feelings about products and services. Analyse these metrics to find areas to improve, increase satisfaction and repeat business.

NPS

Net Promoter Score (NPS) measures the likelihood of customers to recommend your business to others, it’s a good indicator of customer loyalty and satisfaction. NPS is calculated by finding the difference between the percentage of promoters and the percentage of detractors. Promoters are those who rate 9-10 and detractors are those who rate 0-6. The average NPS score is around +32.

Factors that affect NPS are product quality, customer service and overall customer experience. Increasing the number of promoters will increase your NPS score, means customers are more willing to recommend your brand.

Higher NPS means strong customer loyalty and is a key metric to measure your customer engagement strategy.

Customer Satisfaction Score (CSAT)

Customer Satisfaction Score (CSAT) measures how satisfied customers are with a specific interaction or purchase. This metric measures customer satisfaction with products and services and is usually collected through survey after a transaction. Higher CSAT score means customers are happy with their experience which can reduce churn and increase customer loyalty.

Content marketing and responsive web design can also help keep customers satisfied and engaged.

Return Rate

Measuring return rate is important to analyse individual product performance and financial health of your ecommerce store. Average return rate for ecommerce stores is around 30% and for every $1 billion in sales, the average retailer has a refund of around $165 million. Higher return rate means customer dissatisfaction and may indicate mismatch between product expectation and reality.

Return rate is calculated by dividing the number of products returned by the total number of products ordered then multiply by 100. To reduce buyer’s remorse, consider offering free returns or exchanges which can encourage purchase. Managing the return process well can increase customer satisfaction and reduce revenue impact.

Marketing Metrics

Key ecommerce metrics help you measure overall business performance by measuring customer engagement, conversion rate, and marketing efficiency. Monthly metrics for ecommerce include many factors. These are email open rate, multichannel engagement, reach, add-to-cart abandonment, and other micro-conversions. These metrics are key to measuring ecommerce success and guiding future strategy.

Click-Through Rate (CTR)

Click-through rate (CTR) is the percentage of email subscribers who clicked through to your site. Average CTR for ecommerce email campaigns is 2.01%. Improve CTR by having well designed email, mobile friendly design, strong CTAs and compelling subject lines.

Optimize these elements to improve email campaign performance and drive more traffic to the site.

Email Open Rate

Email open rate is the percentage of people who opened the marketing emails you sent. It’s an important metric to measure the effectiveness of your email campaigns. This metric measures how well your campaigns reach and engage your audience. Email open rate varies by industry so benchmark against industry standard to measure performance.

To improve email open rate, craft compelling subject lines and ensure your email is relevant to your audience’s interest.

Cost Per Acquisition (CPA)

Cost Per Acquisition (CPA) is a key metric to measure the efficiency of your marketing spend. CPA measures the total cost to acquire a paying customer at campaign or channel level. It’s different from Customer Acquisition Cost (CAC) as it’s more focused on specific actions that result in conversion.

Optimize CPA to improve your return on investment (ROI) in marketing.

Website Metrics

Key ecommerce metrics are important to measure how well your ecommerce site is performing. Key performance indicators in this category are loading speed, user engagement, and navigation efficiency. Tracking these metrics ensures a smooth user experience, which is key to retaining customers and driving sales.

Bounce Rate

Bounce rate is the percentage of visitors who left your site without taking any action. It’s calculated by dividing single page visit by total visit. Higher bounce rate means your website’s content or design is not engaging or relevant.

To reduce bounce rate, improve site content, navigation and overall user experience.

Page Load Time

Page load time affects user retention and can cause higher bounce rate if pages take too long to load. A 1 second delay in page load time can result to 7% reduction in conversion.

To optimize page load time:

• Minimize image sizes
• Use browser caching
• Use content delivery networks
• Use lazy loading for images and videos

These will improve load times and reduce data processing.

Mobile Responsiveness

Mobile sales is key as mobile accessibility can drive more sales. Tracking performance across devices is important to understand user behaviour on different platforms. Having a mobile friendly design is important to capture mobile traffic and drive sales.

Make sure your ecommerce site is responsive and provides smooth experience across all devices.

Inventory and Supply Chain Metrics

Key ecommerce metrics are important to manage stock levels and operation. Key metrics in this category are inventory turnover rate, stockout rate and average inventory sold per day.

These metrics help businesses to maintain optimal stock levels, reduce stockouts and improve sales forecasting.

Inventory Turnover Rate

Inventory turnover rate measures how often inventory is sold and replaced in a certain period. It’s calculated by dividing cost of goods sold by average inventory in a period. Higher inventory turnover rate means better inventory management and can help businesses avoid overstocking or stockouts.

Monitor this metric to adjust your purchasing strategy for optimal inventory levels.

Stockout Rate

Stockout rate measures the frequency of stockouts which can severely impact customer satisfaction and lost sales. Effective inventory management is key to product availability and sales maximisation.

Improving stock management can reduce the frequency of stockouts and overall customer experience.

Average Inventory Sold Per Day

Average inventory sold per day measures the number of items sold per day by product variant. Monitor daily sales for each product variant to make informed inventory replenishment decisions.

This will help you understand your sales velocity and adjust inventory levels accordingly so popular products are always in stock.

Conclusion

In summary, tracking and optimizing key ecommerce metrics is key to success in the online market. By understanding and using metrics like conversion rate, customer acquisition cost, customer lifetime value, and inventory turnover rate, you can make informed decisions that drive growth and customer satisfaction. Implementing these metrics will not only improve your online store but also help you to build loyal customers and increase profitability.

FAQs

What is the most important metric for ecommerce?

Most important metric for ecommerce is sales conversion rate as it directly affects your revenue. Focus on improving this and you’ll see big growth for your business!

How to improve customer retention rate?

To boost customer retention rate, focus on delivering great customer service, implement loyalty programs and create personalized experience for your customers. These will build long term relationships and have them coming back!

What’s the difference between CAC and CPA?

The main difference is CAC calculates the total cost of acquiring a new customer and CPA calculates the cost of specific actions that lead to conversion. Understanding both will help you optimize your marketing!

Why is page load time important for ecommerce?

Page load time is important for ecommerce as it directly affects user retention and conversion. Faster page load keeps customers engaged and drives sales so optimize your speed for success!

How to reduce checkout abandonment?

Simplify checkout, offer multiple payment options and show costs to reduce checkout abandonment. These will improve customer experience and conversion!