Many eCommerce owners consider SALES numbers to be the only important metric to track (maybe you’re doing the same).
Yet, other successful eCommerce store owners grab this opportunity to track all necessary metrics. This helps them understand their business performance and key areas for improvement.
So, why would someone ignore such a beneficial resource that helps them make profitable business decisions? This is because they’re not familiar with:
- Those eCommerce metrics
- Their meanings
- Their importance for business growth
- And ways to improve them
If you also fall into this category, don’t worry. In this blog, I’ll clear all your doubts about eCommerce metrics.
Let’s get started.
What are Metrics?
Metrics are figures or statistics that help you measure your eCommerce processes. Metrics helps you measure eCommerce success in a variety of areas such as:
- Shows your overall eCommerce business performance
- Shows If your plans are working or not
- Shows areas for improvement
- And helps you make informed decisions
People often confuse metrics with KPIs. So, before we move to the necessary metrics you need to track, it’s worth understanding the difference between metrics and KPIs.
Metric VS KPIs: What is the Difference?
KPIs stand for Key Performance Indicators. It measures the performance and progress of your eCommerce processes. They help you figure out if your eCommerce operations are enough and on track or have fallen short of matching your goals.
Let’s understand the difference between metrics and KPIs from the image below.
Let’s suppose “Total Sales (in a month)” is a metric, so the KPI will be any number you want to set as your goal.
For example, Metric = Monthly Total Sales
KPI = 500 sales per month (or 500 sales/month)
Now, let’s move to the main section, we’re here for.
9 Key eCommerce Metrics To Track At First
We learned what metrics are. In this section, we’ll discuss eCommerce metrics that are MUST for store owners to track.
Another thing, the metrics we’re about to reveal are not random numbers. You can think of them as the heart of your eCommerce business, as they are crucial for both newbies and seasoned online store owners. Let’s start then.
1. Store Sales
As I said earlier, every eCommerce owner has a habit of gazing at sales numbers to track overall store performance. So, we needed to place this eCommerce metric at the top of our list.
To put it simply, sale numbers are make-or-break numbers for your eCommerce business — a major player, no doubt. And I know, you’re already keeping an eye on it without our advice.
How to Efficiently Track Store Sales Metrics?
To track it effectively and to get the most information out of it, you can try to understand patterns behind it, such as;
- How your sales numbers are increasing/decreasing?
- When your sales numbers are increasing/decreasing?
- What are such activities that are affecting your sales numbers (in a good/wrong way)?
Doing this can provide you with some really good insights into how you can optimize your sales numbers.
How to Improve Store Sales?
Here are some actions you can take to improve your eCommerce store sales.
- Have a loyalty program
- Build effective marketing strategies
- Offer rewards that are easy for your customers to achieve
- Promote your online store
- Give away free sample products
- Offer attractive deals and discounts
- Personalize user experience on your website
- Host Sales on eCommerce holidays
- Build a community on social media platforms
Improving sales is not something done overnight. You can try your luck with a variety of methods and see what works best for your eCommerce store.
2. Website Traffic
After, sales numbers, the second metric that eCommerce owners binge-watch is their website traffic. And why wouldn’t they? Traffic numbers share an in-depth knowledge of their potential customers, making it a highly necessary metric to track.
But the sad part is that people don’t know how to understand most of those website traffic numbers. So, let’s understand how you can track it efficiently.
How to Efficiently Track Website Traffic?
While checking traffic metrics, store owners often just look at traffic numbers and not the information hidden behind those numbers. Here I’m adding some questions that can help you find more information about your website traffic.
- From which channels the traffic is coming?
- What is their location?
- What are the highly visited pages?
- On Which day of the month/week traffic is high/low?
- How do they navigate through your website?
- How many of them are new visitors and returning visitors?
Try to figure out the most answers possible. Doing this will help you get a solid understanding of your potential customers. As a result, you’ll get better at decision-making and understanding sales channels that work better for your business.
How to Increase Website Traffic?
Here are some strategies that can help you increase website traffic.
- Get better at SEO
- Invest in paid social media/search engine ads
- Reach influencers
- Host contests and giveaways
- Host eCommerce holiday sales
These were some common and proven strategies to improve traffic on your eCommerce website.
3. Sales Conversion Rate
Conversion rate is the percentage of users who visited your store and made a purchase.
You often hear marketers talking about conversion rate and its effectiveness. Well, rightly so, it is a highly necessary metric for you to track as it tells if your eCommerce is meeting its core business goals or not.
To track the sales conversion rate, you can divide the total amount of conversions with total website visitors, and multiply it by 100.
For example, let’s say your website had 500 visitors last month, and out of those, 25 visitors made a purchase.
Conversion Rate = (total conversions / total visitors) × 100
Conversion Rate = (25/500) × 100 = 5%
How to Efficiently Track Store Conversion Rate?
For many people, tracking conversion rates often end after checking the total number of visitors who made purchases.
But to track it effectively, you need to make it an extensive process. Here’s the other information that you can figure out.
- How many visitors added products to the cart?
- How many visitors went for checkout?
- How many completed purchases?
- How many are left after adding products to the cart / proceeding to checkout?
- What stopped them from making a purchase?
Understanding these areas will provide you an insight into disturbing areas, and shows if you need to perform CRO (Conversion Rate Optimization).
How to Improve Conversion Rate?
Here I’ve added several ways that can help you improve your sales conversion rate.
- Shorten your checkout form
- Surprise cart adders with instant discounts
- Use target country/location-specific content
- Accept a variety of payment gateways
Implementing these strategies will help you improve your customer’s shopping journey, ultimately increasing your conversion rate.
4. Average Order Value (AOV)
Average Order Value (AOV), is a metric used in eCommerce and retail to calculate the average amount spent by customers in a single transaction.
AOV helps you set goals and strategies, as well as evaluate how well your strategies are working. Sometimes, store owners spend all their energy on increasing website traffic; however, they should also focus on increasing AOV.
Because increasing AOV helps with generating better revenue. To calculate AOV, you can divide the total number of sales by the number of orders.
For example, you had a total of 100 orders for the past month, and the total revenue out of these orders was $5000.
Average Order Value (AOV) = Total Revenue / Total Orders
AOV = $5000 / 100 = $50
How to Efficiently Track Average Order Value?
Once you calculate this for your eCommerce, you can conduct research on areas such as;
- What is normal AOV in your industry?
- Is your AOV similar to the average of your industry?
- What kind of discounts are helping you improve AOV?
- How AOV is impacted during various seasons?
- Which customer segment (age, gender, and location) has a higher AOV?
… And more.
Going beyond AOV numbers will help you know more about sales tactics, make informed decisions, and boost revenue per order.
How to Improve Average Order Value?
Here are some strategies that can help you increase average order value.
- Offer a free gift upon reaching a minimum order value
- Bundle your products
- Upsell / Cross-sell products
- Provide a personalized shopping experience
- Create urgency with time-sensitive offers
From these strategies, you can choose a suitable one for your eCommerce store. Moreover, avoid implementing all these at once to identify the one that works better.
5. Customer Acquisition Cost
Customer Acquisition Cost (CAC) or Cost Per Acquisition is a metric that shows how much you spent on gaining one customer. This includes your advertising costs, email campaign costs, discounts offered, or any other cost that helps make a sale.
The sad part is that many eCommerce merchants do not try to learn this metric in-depth and some even don’t know about it. But you don’t have to follow their path, as CAC is a highly important metric that helps you track the profitability of your eCommerce store.
To calculate CAC, you need to divide total sales and marketing costs by number of new customers.
For example, if your sales and marketing cost is $5000 and you’ve got 100 new customers, your CAC is $50. In case you’re finding total CAC for paid traffic, you’ll find analytics directly on Google Ads or Facebook Ads.
How to Efficiently Track Customer Acquisition Cost?
Here are some questions you can think about, that help you learn more information relating to acquisition costs.
- What kind of marketing efforts or discount options are better at acquiring customers?
- Which customer segments are cost-effective to acquire?
- Which marketing channels have better results?
- Are there any seasonal trends affecting CAC?
- What is the average CAC in your industry?
Figuring them out will help you make better decisions while you spend on acquiring customers.
How to Decrease Customer Acquisition Cost?
Here are some ways you can decrease customer acquisition costs while attracting a large amount of new customers.
- Focus on the appropriate audience
- Engage with your potential customer on various social channels
- Experiment with different types of advertising
- Improve your website at SEO
- Invest in retargeting ads
Implementing these tips will help reduce your CAC and also improve the effectiveness of your marketing efforts.
6. Returning Customers
Returning customers are those who previously purchased from you. Measuring returning customers is your top priority as it shows how attractive your website is.
In fact, returning customers are easier and cheaper to convert than new customers. This is due to their existing interest in your store/products, and are easy to convince.
How to Efficiently Track Returning Customers?
Here are some questions you need to ask yourself to get the most customer information out of this metric.
- What is the time interval between returning customers’ visits?
- What are the pages/products highly visited/purchased by returning customers?
- What are their gender, age, and location?
- Are there any opportunities to improve their shopping experience? (i.e. personalized recommendations, discounts)
Working on its answers will provide you with extensive user data that helps with customer retention.
How to Increase the Returning Customers?
Here are some ways eCommerce businesses can increase the number of returning customers and increase eCommerce sales.
- Update them with emails to stay on top of their mind
- Introduce a loyalty program
- Reward repeat customers
- Use retargeting ads
- Stay connected with them on social media
Implementing these strategies will result in customer satisfaction, ensuring that they will return for future purchases.
7. Abandoned Cart/Checkout Rate
The abandoned cart/checkout rate is the percentage of people who added items to their cart or started the checkout process but didn’t complete the purchase.
According to Baymard Institute, 70.19% of shoppers abandon their carts. So, even when your shopping cart abandonment rate is near this benchmark number, it is necessary to regularly track and improve it.
How to Efficiently Track Abandoned Cart / Checkout Rate?
Here are some questions you can answer instead of just staring at your shopping cart abandonment rate to stay updated with additional information that can help you improve it the right way.
- Is your checkout process longer than 1-2 pages?
- Is your cart/checkout page design messy/hard to understand?
- Have you mentioned return policies?
- Are there alternate payment options?
- Are shipping costs above industry standards?
- What is the traffic source of abandoned cart/checkout users?
- What are the times when the abandonment rate increases most?
Doing this will help you spot those red flags and optimize the customer experience.
How to Decrease Abandoned Carts / Checkouts?
Here are some tips that can help you decrease the abandoned cart/checkout rate.
- Stop asking for additional fees, taxes, or shipping costs
- Implement a guest checkout option
- Improve the user experience on your eCommerce website
- Provide surprise discounts at the time of checkout
Implementing these strategies will result in customer satisfaction and loyalty, ultimately decreasing your abandonment rate.
8. Customer Lifetime Value (CLTV)
Customer Lifetime Value (CLTV) measures how much total value, including revenue and additional cost, you earn from an average customer over their lifetime period.
Many people talk about this metric but only 42% of companies in the world measure this metric correctly. If you want to keep up with profits, do measure CLTV regularly, as it helps you determine the right amounts to invest in acquiring each customer.
To calculate CLTV, You can multiply the average annual customer spend by the duration of the relationship with the customer (in years) and deduct the customer acquisition cost from it.
For example, your average annual customer spend is $200, the duration of the customer relationship is 3 years, and the per-customer acquisition cost is $50.
Then, CLTV = (Avg. annual spend of customer × Duration of customer relationship) – (Customer Acquisition Cost)
CLTV = ($200 × 3) – $50 = $550
How to Efficiently Track Customer Lifetime Value?
If you want this CLTV number to work efficiently for you and send you more information, you can brainstorm on the below questions.
- Which products/categories contribute most to improving CLTV?
- What are some events that changed customers’ purchase behavior?
- Which strategies have helped you boost CLTV?
- Are customer engagement activities helping you achieve higher CLTV?
- What are customer preferences and needs?
- What is the traffic source of customers with higher lifetime value?
Answering these questions will help you figure out factors that can help you understand your customer’s lifetime value in a better way.
How to Increase Customer Lifetime Value?
Here are some strategies you can implement to improve customer lifetime value metrics.
- Listen to your customer’s feedback
- Build trustful relationships with them
- Engage with your customers through social media
- Send them personalized deals and discounts
- In case of any mistakes, take responsibility
Doing this will help you build a trustful community of loyal customers, where they will feel heard and valued. Ultimately, it helps you retain existing customers forever and earn profits.
9. Channel Attribution
The Channel Attribution metric measures the marketing channels that brought the most amount of revenue to your business.
Your eCommerce store has customers coming from various sources, such as ads, emails, and other ways. This metric makes your work easier, by figuring out the sales channel that is best in bringing more customers and making sales.
Data provided through this metric will help you make better decisions relating to boosting sales numbers and marketing campaigns.
How to Efficiently Track Channel Attribution?
The channel attribution metric is the one you need to figure out what is going on with all those marketing efforts you’re making. To track this metric efficiently, you can reach out to your store analytics and figure out answers to these questions.
- Which channels are constant at driving better revenue?
- What channels have a longer/shorter time lag between customer interaction and actual conversion?
- Are there any seasonal trends affecting channel performance?
- Are there any specific customer groups coming from specific channels?
- Are there any channels that strongly influence customers to purchase during the first interaction?
Looking at this metric with a variety of questions in mind will help you solve patterns of which sales channels are a match for your eCommerce store.
How to Increase Channel Revenue?
Here are some ways you can increase revenue from different sales channels.
- Prioritize channels that bring better revenue
- Be consistent with each channel you’re working with
- Provide quick replies to customer queries
- Stay engaged with customers
- Run paid campaigns
Implementing these tips will help your sales channels get more effective at revenue-generating.
And here we’re done with our list of top eCommerce metrics you should focus on at first. You can depend on these important metrics to check and control the overall performance and profitability of your eCommerce store.
Where to Track eCommerce Metrics?
Most people are aware of where to track metrics for their eCommerce websites. And answer to this is very straightforward, but still, it is a common point of confusion for many. So let’s check it out.
(1) Google Analytics – For traffic data, user data, website performance data, and more
(2) Your eCommerce Platforms – For sales data, product performance data, and more
Ultimately, you have the flexibility to choose an analytics platform that aligns perfectly with your unique requirements, making it easier to track and measure eCommerce success.
Benefits of Checking eCommerce Metrics and KPIs
Are you ready to learn some big benefits of keeping an eye on these eCommerce metrics and KPIs? Well, I guess you’re.
1. Shows Your Marketing Skills
eCommerce metrics and KPIs are report cards for your marketing skills. They share a variety of information such as;
- Marketing strategies/campaigns Performance
- Their success chances
- Areas of improvement
And more. In short, if you’re looking to get the best results out of your marketing efforts, metrics are the way to go.
2. Predicts Trends Like PRO
Ever wondered how top eCommerce stores sense trends in advance? They do it with the help of metrics.
By analyzing data and patterns related to trending products, seasonal product demands, and customer preferences, store owners can gain valuable insights into upcoming trends. You can also dig deeper into your metrics to figure out upcoming trends and demands in your niche.
3. Fine-tune your Pricing, Up-Selling, and Inventory Decisions
Only metrics know who your customers are. It has all the information including their interests, behavior, decision-making process, budget, demand, and more.
This information can indeed help you make informed decisions regarding pricing, product suggestions, managing inventory, and more.
4. Helps you Build Personalize Experiences for Customers
As we discussed, metrics know who your customers are, and what they do on your website. They provide every detail of your customers, whether it’s:
- The product page they visited
- The time they spent there
- Or if they hovered around the “Add to Cart” button.
With the eCommerce metrics, you can personalize their shopping experiences, and suggest products that influence purchase decisions and encourage return visits.
5. Allows you to Build a Data-Driven Strategy
Metrics allows you to build a strategy that is armed with all the insights into what is going well and what can be improved in your store.
The accuracy of this data-driven strategy will provide you with impactful results.
Here are some examples of data-driven strategies:
- Sending repeat purchase reminders based on customers’ past buying frequency
- Offering location-based incentives using customer data
- Sending personalized email suggestions using past purchases
Moreover, a data-driven strategy helps you improve customer experience and optimize your marketing efforts.
This was all about the benefits that you can get if you check eCommerce metrics regularly. Now, let’s move to another section that provides information on when you should check your metrics.
How Often Should I Check eCommerce Metrics?
This is a common question popping into every mind after learning these eCommerce metrics. And the answer is: it depends on the type of eCommerce metric.
So, here we have a list of eCommerce metrics along with the timings when you should check them.
|Website Traffic||Average Order Value||Store Sales / Revenue||Customer Lifetime Value|
|Impressions/Views of Digital Ads||Customer Acquisition Cost||Conversion Rate||Repeat Customer Rate|
|Social Media Engagement||Cart / Checkout Abandonment Rate||Open-rate of Marketing Emails||Channel Revenue Attribution|
|eCommerce Churn Rate|
|Customer Retention Rate|
These are the common timings when companies look after specific metrics. The frequency of checking these key metrics will also depend on a variety of circumstances.
But make sure you follow this standard timing while checking eCommerce metrics.
So, Relaxed Now?
You sure are. Because now you no longer need to scratch your head and figure out necessary metrics that help you measure your overall eCommerce success.
I hope this blog cleared all your doubts, and that you’re well familiar with all the important eCommerce metrics you gotta keep track of.
Don’t forget to regularly check these metrics to stay updated on the health of your eCommerce store. Moreover, these eCommerce performance metrics aren’t just about watching numbers, so make sure you uncover patterns and discover opportunities hidden behind these numbers.
But still, if you’ve any doubts relating to eCommerce metrics, let’s meet in the comment section below. Or you can contact us here.