What are Ecommerce KPIs and Metrics?
There is, in fact, no to very little difference between KPIs and metrics. Metrics can be defined as a method of quantitative measurement. According to Investopedia:
Executives use them (metrics) to analyze corporate finance and operational strategies. Analysts use them to form opinions and investment recommendations. Portfolio managers use metrics to guide their investing portfolios. Furthermore, project managers also find them essential in leading and managing strategic projects of all kinds.
Okay, but what are KPIs?
KPI is an umbrella term for the metrics that matter the most. However, it does not mean that one metric creates a KPI. On the contrary, you will need more than one metric to find the value of a KPI.
To put a finer point on it, you want to find the conversion rate for your website – one of the most important ecommerce KPIs – you will take two metrics to find that rate.
The number of goal completions divided by the total number of visitors gives you the conversion rate.
In other words, metrics enable us to find the value of a KPI.
Top 34 Ecommerce KPIs You Should Track
Now, you might start wondering which KPIs are essential to growing your sales. No problem; here, you can find the 34 most important ecommerce KPIs for your site to grow in sales.
Keep in mind that the list is not in a particular order, and you can always add more KPIs to meet your needs.
Sales KPIs
1. Conversion Rate
Monitoring this metric is crucial to understand your ecommerce success.
Basically, it measures the percentage of visitors who make a purchase on your site.
Here is the formula for this ecommerce metric:
(Number of transactions / Number of sessions) x 100
So, let's say you have 1000 monthly visitors to your site, and 50 of them make a purchase --> Your conversion rate is 5%.
Now, to increase your conversion rate, you can consider optimizing your site, adding more social proofs and customer reviews, simplifying the checkout process, and many other things.
By implementing these strategies, you can turn more visitors into customers and ultimately grow your business.
2. Average Order Value (AOV)
As its very name signifies, AOV is about how much an average customer spends when they check out.
It represents the average amount of money each customer spends per transaction on your website.
Average Order Value (AOV) = Total Revenue / Number of Orders
A higher AOV means more revenue, and it's easier to improve average order value than to acquire new customers. Let's say the average customer spends $50 per purchase on your shop.
If you increase the AOV to $60 by using upsells and cross-sells, you can make a 20% increase in revenue without acquiring new customers.
3. Average Order Size
Average order size calculates the average amount spent per order, helping businesses to track sales and identify areas for improvement in marketing and sales strategies.
4. Revenue per Visitor (RPV)
Revenue per visitor calculates the average amount of revenue generated per website visitor, allowing businesses to track the effectiveness of their website and identify areas for improvement.
5. Shopping Cart Abandonment Rate
Shopping Cart Abandonment Rate is a key metric for e-commerce businesses as it provides insights into the checkout process's ease.
If a customer thinks it is too complicated to check out, then you'll have an abandoned shopping cart to deal with.
According to Baymard, the average cart abandonment rate is 70.19% in 2024.
To find this metric and optimize it, you have to first divide the number of successful transactions by the number of people who added items to their shopping carts, then multiply the result by a hundred.
This is your shopping cart abandonment rate.
According to cart abandonment statistics, ecommerce sites lose $18 billion in sales because of cart abandonment.
Yes, that's a lot of revenue to lose!
To avoid this result, you can email them in different ways.
To improve this metric and your sales revenue significantly, you can start optimizing the checkout process and implementing exit-intent popups to target the visitors who are about to abandon their carts.
6. Customer Lifetime Value (CLV)
CLV is crucial to see how much a customer makes you profit.
If this number is low, you can take steps to increase your customer loyalty such as launching customer loyalty programs to keep them coming back.
So, assuming you run an ecommerce store that sells beauty products. To calculate the CLV of a customer, you can follow these steps:
- Calculate the average value of each order that the customer has made with your store. Let's say the average order value is $50.
- Calculate the number of times the customer has ordered from your store. Let's say the customer has made 5 purchases.
- Calculate the average lifespan of your customers. Let's say the average customer lifespan is 2 years.
Using this information, you can calculate the CLV of the customer:
CLV = (average order value) x (number of purchases) x (average customer lifespan)
CLV = $50 x 5 x 2
CLV = $500
This means that the customer is expected to spend a total of $500 on your store over the course of their relationship with your business.
By knowing this, you can adjust your marketing efforts and customer service to maximize the value of each customer over time.
7. Purchase Frequency
Purchase frequency is a metric that measures how often customers make purchases from your online store within a specific time frame.
It provides valuable insights into customer behavior and helps businesses gauge the effectiveness of their marketing strategies and product offerings.
A high purchase frequency indicates strong customer engagement and loyalty, with customers returning frequently to buy from your store.
Conversely, a low purchase frequency may signal a need to reevaluate your marketing tactics or improve the shopping experience to encourage repeat purchases.
Ecommerce businesses can tailor their marketing campaigns and promotions by analyzing purchase frequency to incentivize customers to buy more often.
8. Repeat Purchase Rate (RPR)
Repeat purchase rate is a powerful metric that tells you how many of your customers are loyal to your brand.
A high RPR means that you have a base of loyal customers who return to your store to make additional purchases.
Number of Repeat Purchases / Total Number of Customers
To calculate it, divide the number of customers who have made more than one purchase by the total number of customers.
For example, if 500 customers made a purchase and 100 of them returned to make another purchase, your RPR would be 20%.
Improving customer loyalty programs, personalized communication, and post-purchase follow-up are some effective ways to boost RPR.
9. Churn Rate
Customers leave & customers come.
This is the rule of the business.
Still, do you want to know at which percentage your customers are leaving? This can be found via churn rate.
So, the first thing in order is to take the number of customers at the end of the month and subtract it from the number of customers at the beginning of the month.
Then, divide the remaining number by the number of customers at the beginning of the month. Finally, multiply it by one hundred.
This is your monthly churn rate!
Number of Lost Customers / Total Number of Customers
So to say, you have 100 customers at the beginning of the month, at the end of the month this number drops down to 75. So, 100 – 75 is 25. 25/100 is your monthly churn rate.
If you are to multiply this rate by 12 to find the annual churn rate, you will have the rate of 75/100.
10. Time Between Purchases
Time Between Purchases is a crucial metric in ecommerce that reveals how frequently customers return to make additional purchases.
It measures the duration between successive transactions made by the same customer.
Understanding this metric provides invaluable insights into customer behavior and loyalty.
A shorter time between purchases typically indicates higher customer engagement and satisfaction, while a longer gap may signal a need for re-engagement strategies or product improvements.
11. Cost of Customer Acquisition (CAC)
Many marketers pay to advertise our companies to attract more customers to your product. That is in the nature of any business.
However, have you ever wondered how much a customer costs you?
This KPI is useful for you to make changes in your marketing campaign to have minimal cost with maximum customer rate.
CAC’s formula is quite simple.
Total Cost of Marketing and Sales / Number of Customers Acquired
You divide your total marketing expenses by the new customers you get.
Thus, the formulation will be as such: Costs you have spent on acquiring customers divided by the number of new customers.
For example, let’s say you spent $50 for 25 customers. This means $2 is how much a customer costs to you.
12. Gross Profit
In ecommerce, gross profit is vital, offering a clear snapshot of your business's financial health. It's the revenue you retain after deducting the cost of goods sold (COGS).
This figure doesn't account for operating expenses, giving you a direct insight into your product profitability.
Its formula is easy:
Gross Profit = Total Cost of Products Sold – Total Amount of Sales.
Understanding your gross profit is essential for strategic decision-making. It reveals how efficiently you're managing your inventory and pricing your products. A healthy gross profit margin indicates effective cost control and competitive pricing strategies.
💡 By tracking gross profit consistently, you can identify trends, pinpoint areas for improvement, and maximize profitability.
It's a cornerstone metric for any ecommerce venture, guiding you toward sustainable growth and success in the ever-evolving digital marketplace.
13. Net Profit Margin
Net Profit Margin is a critical metric in ecommerce that reveals the percentage of revenue left over after deducting all expenses, including COGS, operating costs, taxes, and other overheads.
It essentially measures how efficiently a business converts revenue into profit.
You can calculate it with this formula:
Net Profit Margin = (Revenue – Cost)/ Revenue
For ecommerce entrepreneurs, a healthy net profit margin is essential for sustainable growth and financial stability. It indicates effective cost management, pricing strategies, and overall business performance.
By closely monitoring net profit margin, ecommerce businesses can identify areas of inefficiency, optimize expenses, and maximize profitability.
This KPI provides invaluable insights into the financial health of your ecommerce venture and guides strategic decision-making to drive long-term success in the digital marketplace.
14. Cost of Goods Sold
Cost of Goods Sold (COGS) is a fundamental metric in the ecommerce landscape, representing the direct expenses associated with producing or purchasing the goods sold by your business.
In simpler terms, it encompasses the costs directly tied to the production or procurement of your products.
Calculating COGS involves summing up expenses like raw materials, labor, and manufacturing overheads.
Understanding your COGS is crucial as it directly impacts your gross profit margin, a key indicator of your business's financial performance.
For ecommerce entrepreneurs, keeping a close eye on COGS is essential for maintaining profitability. By optimizing production processes, negotiating better deals with suppliers, or adjusting pricing strategies, you can effectively manage COGS and enhance your bottom line.
Marketing & Advertisement KPIs
15. Email Open Rate
Email open rate is a metric that tells you how many people have opened the emails you’ve sent.
It’s an important metric because it measures the effectiveness of your subject line and preview text. Let’s say you’ve sent a promotional email to your customers.
You want to know how many people actually opened it.
(Total Emails Opened / Total Emails Delivered) x 100
To calculate the email open rate, you simply divide the number of opens by the number of emails delivered and then multiply by 100 to get a percentage.
However, if you use automation and email software, you will automatically receive an email open rate report.
If your email open rate is low, you may want to test different subject lines and preview text to increase engagement.
There are many strategies to increase the email open rates such as avoiding spam filters.
16. Email Click-Through Rate (CTR)
Email CTR measures the percentage of email recipients who clicked on a link within an email, providing insights into the effectiveness of email marketing campaigns.
The emails you have sent are not empty, of course, they contain a link or several links. With that being said, how many clicks your site gets through emailing your customers is a key indicator of comprehending your emailing campaign.
(Total Clicks on Links / Total Emails Delivered) x 100
So, by dividing the Total Number of Individuals Clicks by the Total Number of Email Opens you will see your campaign’s success.
17. Email Conversion Rate
The next step to grasp the success of your campaign is looking into Email Conversion Rate. It is approximately the same thing with the conversion rate – the only difference is the domain.
(Total Conversions / Total Emails Delivered) x 100
The calculation method is quite simple, too: divide the number of conversions by the number of successful email deliveries, then multiply that number by one hundred. Voila! You will get the email conversion rate.
18. Subscriber Growth Rate
Measures the rate at which a business is gaining new email subscribers, helping to track the effectiveness of marketing efforts and identify areas for improvement.
19. Return on Investment (ROI)
Calculates the financial return on an investment relative to its cost, allowing businesses to assess the effectiveness of their marketing and advertising campaigns.
20. Cost Performance Index (CPI)
This metric measures the ratio of the actual cost of an advertising campaign to the expected cost, indicating how efficiently your business is using its budget.
21. Bounce Rate
There are some people who do not view more than one page in one session. They bounce back.
A high bounce rate indicates that visitors are not engaging with your content and are leaving your site after viewing just one page.
To calculate the bounce rate, you can divide the total number of bounces by the total number of visits.
Total Number of Bounces / Total Number of Sessions
A high bounce rate can be improved by improving the website's navigation, reducing page loading time, and optimizing the website for a better user experience.
For instance, if you have 5000 total visits and 1000 bounces, the bounce rate would be 20%.
22. Affiliate Performance Rates
Affiliate Performance Rates measures the effectiveness of affiliate marketing campaigns, helping businesses to optimize their partnerships and track revenue generated through affiliates.
23. Pageviews per Session
The time customers spend on your website is called a session.
In a typical session, you view several pages. But, if a person is to view so many pages in a session to take the desired action. It might not actually be good for your business.
Total Number of Pageviews / Total Number of Sessions
You don’t want to feel like you're in a maze when you just want to buy an item.
Thus, if this KPI returns a high value, it means that you have to make this process less complicated.
The formula for this KPI is very simple. Total Number of Pageviews divided by Total Number of Visitors.
24. Cost per Conversion (CPC)
Cost per Conversion= Total Cost for the Traffic / Total Number of Conversions
Cost Per Conversion (CPC) is a pivotal metric in ecommerce that evaluates the cost incurred to acquire a single customer or achieve a specific conversion goal, such as purchasing or signing up for a newsletter.
It measures the efficiency of your marketing campaigns and helps determine the return on investment (ROI) for your advertising efforts.
Understanding CPC is essential for optimizing marketing budgets and maximizing profitability.
A lower CPC indicates that you're acquiring customers at a lower cost, improving your overall marketing efficiency.
Conversely, a high CPC may suggest refining your targeting or adjusting your ad creatives to enhance campaign performance.
By tracking CPC closely, ecommerce businesses can fine-tune their advertising strategies, allocate budgets effectively, and drive higher conversion rates.
25. Average Session on The Website
Average Sessions = Total Session Duration / Total Session Number
Average Session on the Website is a crucial metric in ecommerce that measures the average time visitors spend on your website during a single browsing session.
It's a vital indicator of user engagement and the effectiveness of your website in capturing and retaining visitor interest.
For ecommerce businesses, a higher average session duration typically indicates that visitors find your website engaging and valuable. It suggests that they're exploring your products, reading content, and possibly making purchase decisions.
On the other hand, a lower average session duration may signal issues such as poor website navigation, slow loading times, or irrelevant content.
By monitoring average session duration, ecommerce entrepreneurs can identify areas for improvement in website design, content strategy, and user experience.
Also, explore "10 Email Marketing KPIs and Metrics You Should Be Tracking."
Customer Service & Customer Success KPIs
26. Net Promoter Score (NPS)
Measures the likelihood of customers to recommend a business to others, which can help identify areas for improvement and track customer loyalty over time.
Net Promoter Score= % Promoters - % Detractors
27. Customer Satisfaction (CSAT) Score
Measures customer satisfaction with a business's products or services, providing insights into customer needs and preferences.
28. Refund & Return Rate
Refund & Return Rate is a vital metric in ecommerce that measures the percentage of orders that result in refunds or returns. It provides valuable insights into customer satisfaction, product quality, and overall business performance.
For ecommerce businesses, a lower RR indicates that customers are satisfied with their purchases, leading to fewer returns or refunds.
On the other hand, a higher RR may signal issues such as product defects, inaccurate product descriptions, or poor customer service.
By monitoring RR closely, ecommerce entrepreneurs can identify trends, pinpoint areas for improvement, and take proactive steps to reduce return rates.
29. First Response Time
Measures the time it takes for a business to respond to customer inquiries, which can impact customer satisfaction and retention rates.
30. Average Complaint Resolution Time
Average Complaint Resolution Time = (Number of Customer Support Requests – Total Number of Unresolved Request) / Total Number of Requests Received
Average Complaint Resolution Time is a crucial metric in e-commerce that measures the average amount of time it takes for your customer complaints or issues to be resolved by your customer support team.
It's a key indicator of customer satisfaction and the effectiveness of your customer service processes.
For ecommerce businesses, a shorter average complaint resolution time is indicative of efficient and responsive customer support.
It reflects your commitment to addressing customer concerns promptly, which can lead to higher levels of satisfaction, loyalty, and repeat business.
By monitoring and reducing average complaint resolution time, ecommerce entrepreneurs can improve the overall customer experience, mitigate negative feedback, and build a positive reputation for their brand.
Manufacturing KPIs
31. Cycle Time
Cycle Time reveals the duration required to produce a single product from inception to completion. By closely monitoring this metric, manufacturers gain valuable insights into their production efficiency and workflow effectiveness.
A shorter cycle time for manufacturing businesses signifies streamlined processes, optimized workflows, and enhanced productivity.
It indicates that products are being manufactured swiftly and efficiently, allowing quicker turnaround times and improved customer satisfaction.
Manufacturers can identify bottlenecks, streamline operations, and boost overall productivity by reducing cycle time.
This KPI is a crucial indicator of manufacturing performance and guides strategic decision-making to drive operational excellence and competitiveness in the industry.
32. Yield
Yield, a straightforward manufacturing KPI, measures the total number of products manufactured within a given timeframe.
Analyzing yield variance KPI alongside yield helps identify deviations from the average production output.
This variance highlights areas where production may have exceeded or fallen short of expectations, enabling manufacturers to adjust processes and optimize efficiency accordingly.
Maximizing yield is essential for achieving production targets, minimizing waste, and maximizing profitability.
By closely monitoring yield and its variance, manufacturers can make informed decisions to improve operational performance and drive success in the competitive market.
33. First Time Yield (FTY) & First Time Through (FTT)
First-time yield (FTY), also known as first-pass yield, is a crucial quality-based KPI in ecommerce manufacturing. It provides insights into the efficiency of production processes by revealing the percentage of units successfully manufactured on the first attempt.
To calculate FTY, divide the number of units that pass through the manufacturing process without needing rework or repairs by the total number of units that entered the process. A higher FTY indicates fewer defects and a more efficient production process.
First Time Through (FTT) is closely related to FTY and measures the percentage of units that successfully pass the manufacturing process without rework or repairs. It emphasizes the importance of getting things right the first time.
For ecommerce businesses, optimizing FTY and FTT is essential for reducing waste, minimizing production costs, and maintaining product quality.
34. Overall Equipment Effectiveness (OEE)
Overall Equipment Effectiveness (OEE) offers insights into manufacturing equipment performance. It assesses how efficiently machinery is operating and producing goods.
For ecommerce ventures with manufacturing operations, a high OEE indicates optimal equipment performance, minimal downtime, and maximized production output.
It reflects streamlined processes and efficient resource utilization.
By closely monitoring OEE, ecommerce businesses can identify areas for improvement, address equipment inefficiencies, and enhance overall operational efficiency.
This KPI ensures smooth manufacturing processes and drives profitability in ecommerce ventures with production facilities.
In Conclusion
In summary, ecommerce KPIs are crucial for understanding your website's success.
While there are more than 30 KPIs to consider, these essential metrics apply at every stage of your store's growth. Maintaining these KPIs is critical to achieving the desired results.
Consider strategies like Popupsmart's popups to optimize your website, which helps keep KPIs optimal. Keep tracking your store's KPIs to drive your ecommerce success!
Frequently Asked Questions
How Can KPIs Help Boost Ecommerce Performance?
KPIs can help ecommerce businesses identify areas of improvement, optimize their website for conversions, improve customer acquisition and retention, and increase the lifetime value of customers. By measuring and analyzing KPIs regularly, businesses can identify trends and take action to optimize their performance.
What are Some Common Ecommerce KPIs?
Some common ecommerce KPIs include conversion rate, average order value, customer lifetime value, repeat purchase rate, cost of customer acquisition, bounce rate, email open rate, and revenue per visitor. These metrics provide valuable insights into different aspects of ecommerce performance.
How Often Should Ecommerce Businesses Track KPIs?
Ecommerce businesses should track KPIs regularly, depending on the metric and the specific needs of the business. Some KPIs, like conversion rate and revenue per visitor, may require daily tracking, while others, like customer lifetime value, may be tracked on a monthly or quarterly basis.
Can KPIs Help with SEO and Rich Results?
Yes, some KPIs, like bounce rate and time on site, are considered important factors for search engine optimization and can impact the visibility of a website in search results. Additionally, by optimizing for KPIs like customer satisfaction and net promoter score, businesses can improve the customer experience and potentially earn more positive reviews and social shares, which can also benefit SEO and rich results.
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