5 Crucial Ecommerce Metrics & KPIs You Need To Measure


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There are many metrics you can measure for your e-commerce website today. Google Analytics alone will give you many more metrics than what you require. There are many data analytics tools that go beyond Google Analytics. You can easily get lost in the ocean of data. You can even become obsessed with chasing vanity metrics.

What are the most important metrics for your online ecommerce store? You can track many metrics but you need to include metrics that show a lot about the performance of your website. These are seven essential e-commerce metrics that you should be monitoring right now.

1. Conversion rates

Making sales is a top priority for your e-commerce shop. Conversion rates are a critical metric to increase sales.

Conversion rates (CR) are simply the percentage of people who visit your site and buy products. Growcode data shows that the average ecommerce conversion rate across all industries is 2.27.

Here’s an easy formula to calculate conversion rates: CR = (number of people visiting your site/number of sales) x 100

You can also track individual product pages and other pages to determine your overall conversion rates for e-commerce stores.

Conversions can also refer to actions other than buying. For example, submitting information on your site. It is important to monitor conversion rates for specific products and landing pages.

You can then identify pages that are not performing and take steps towards improving them.

How to increase conversion rates

  • Allow guest checkout: Many visitors will be turned away if they have to create an account before purchasing. They can finish their purchase and then register later with guest checkout.
  • Recommend products based upon customer information: You can create personalized product recommendations based upon information such as gender, age, location, and other details. Other information, such as holidays, seasons, and other details, are also important. A customer’s past purchases can help predict what they will buy.
  • Promo offers: Most buyers will not resist discounts or free shipping when they are buying products they love. These offers can be great, but you need to make sure you don’t lose any money.
  • You can run A/B testing: Even if all conversion best practices are followed, it’s not guaranteed that you will get the highest conversions. A/B Testing is the process of testing two versions of your website pages in order to determine which ones have the highest conversion rates. You can test elements like background, CTA text and CTA button colors.

2. Shopping cart abandonment rate

You will often see customers abandon their shopping carts after they have finished filling them. The average abandonment rate for shopping carts is 69.8%, according to the Baymard Institute.

This could be due to many factors.

They might navigate to an interesting video, to a competitor’s site, or to your website that has poor user experience.

Cart abandonment can cause you to feel hurt. It can cause more than just hurt feelings.

Reduce cart abandonment. This formula can be used to calculate abandonment rates for shopping carts before you do this.

Shopping cart abandonment rates = (the number completed purchases/the amount of shopping carts created) x 100%

If your cart abandonment rates are high, it is time to investigate the cause. Here are some ways you can reduce shopping cart abandonment rates.

How to lower cart abandonment rates

  • Explicitly disclose all costs: Shoppers hate surprises, especially when they involve paying more. According to a Baymard Institute study, 49% of shoppers abandon their carts due to high costs. To make shoppers aware of all costs, it is important to display them before they reach the checkout page.
  • Trust signals are important: Online theft makes it difficult for shoppers to give their card details online. Shoppers will feel more secure if they have security badges.
  • Many payment options: This is related to the previous point. Shoppers want to be able to pay with other options than their credit cards. You should offer options like PayPal, Apple Pay and Google Pay.
  • Enhance website user experience. If your website is difficult to navigate, and customers can’t find the essential elements they need, they will abandon their carts. Magento 2 One-Step Checkout extension reduces abandonment rates and increases conversion rates dramatically. The use of robust cart software such as these SamCart alternatives can help to reduce abandonment and improve the user experience.
  • Email sequences can be used to remind customers about their cart items. If you have promotional offers, you can also display them. ActiveCampaign can be used to execute these campaigns efficiently.

3. Average order volume

You want more customers and you also want to increase revenue. They don’t always work together.

You can actually increase your revenue even with the same customers. The average order volume is one important metric to consider in order to achieve this.

The average order quantity (AOV), measures how much a customer spends when they place an order on your ecommerce store. This formula can be used to calculate the AOV: Total revenue per period/number of orders completed for that period

The average order volume of different industries will differ. A luxury goods store, for example, will have a higher order volume than a store selling socks and tennis shoes.

How to Increase Average Order Volume

  • You can recommend complementary products to shoppers who are looking for a product. You can, for example, market socks to someone who has just purchased a shoe.
  • Free shipping for orders above a certain amount. Some shoppers will buy more products than they have to pay shipping costs. This offer can encourage shoppers to buy more to reach the threshold.
  • Volume discounts: Customers who have purchased products up to a certain amount can receive a percentage discount.
  • High-end products are eligible for free returns They may request a refund or return the product they purchased. You can give a refund if the product is too expensive. This will make it possible for customers to return for more.
  • Seasonal promotions and holiday sales are a great way to get shoppers excited about holidays and popular seasons. These promotions can encourage customers to spend more and increase their order volume.

4. Cost of customer acquisition

Although acquiring customers is an amazing achievement, it’s also important to think about the cost of acquisition. If your customer acquisition costs are too high, you can’t enjoy the benefits of acquiring customers.

How can you calculate customer acquisition costs (CAC). This simple formula will help you calculate CAC: Marketing expenses for a period/number of customers acquired during that time

Marketing expenses may include the cost of tools, man-hours and cost of services. Flying Saucer has created a CAC benchmark for various industries.

You should not only calculate the CAC for an entire marketing channel, but also calculate it individually.

This metric allows you to identify the most efficient marketing channels and make more investments in them.

CAC must be considered in context. Your customer acquisition cost might be higher than the first order of your customer.

This is where the customer’s lifetime value (CLV) is considered.

A customer might continue to buy products for three more years.

How to lower customer acquisition costs

  • You should be focusing on your prospects’ preferred marketing channels. Depending on what products you sell, it is more likely that you will reach your ideal customer through certain channels than others. If you sell food products, for example, it’s likely that you will find potential buyers through Pinterest and Instagram.
  • You can create tripwires. This allows you to qualify customers directly from their browsers. Tripwires are basically splinters or sub-products of your core products that you offer at a very low price to get customers to the door and then upsell to your main product later.
  • To improve conversions, you should perform experiments. There is no one marketing strategy that will work for all businesses. To improve your marketing results, and decrease CAC, you should perform A/B testing.
  • To nurture leads, use CRM software: You can input as much information as you like about your contacts. Additionally, past interactions with your company are available. This allows you to personalize your messages. You can even use CRM software to score leads and help you nurture and connect with those who are most likely to buy. Pipedrive is a great CRM platform that you can use to take advantage of these capabilities.

5. Revenue per visitor

This is the average revenue that you get from one website visitor. Your revenue per visitor is usually spread over a period. This formula can be used to calculate revenue per visitor (RPV). RPV = Total revenue over a period/number of unique visitors during that period

Your revenue will be split over those who did not purchase anything from your ecommerce store. However, every visitor to your website can be a buyer.

This number can give you many insights into your business operations. It is possible to compare your revenue per visit with the industry average.

Low conversion rates may cause this value to be too low. If this is the case, then you will need to focus more on conversion rate optimization.

If your revenue per visitor exceeds the industry average, it is important to research and understand your visitors. You can then run marketing campaigns that attract more of this type of visitor.

How to Increase Revenue per Visitor

  • Market campaigns can be used to attract buyers’ persona. One of the best ways for increasing revenue per visitor is to bring the right visitor to your site. You have identified your ideal customers by creating buyer personas. These people should be at the forefront of your marketing efforts.
  • Personalization is a key component of your marketing campaigns. If you sell multiple products, it makes sense that customers will be interested in different products. You can market products that are most likely to be bought based on the pages and purchase history of visitors. Personalization allows you to understand the behavior of each customer and provide relevant insight and product recommendations.
  • Send offers to your regular customers: The Pareto principle states that 20% of your customers are responsible for 80% of your revenue. This means that you need to identify the 20% of your customers who are regular customers. Send them personalized offers to encourage them to purchase more.

6. Customer retention rates

Even if your industry-leading conversion rates are high, poor customer loyalty (CRR), can negate all of your conversion efforts. It’s hard for your business to grow without high conversion rates.

It’s cheaper and easier to sell to existing customers than to prospects.

Bain & Company claims that a 5% increase on customer retention can result in more than a 25 percent increase in profits.

Another way to look at it is that poor customer retention rates could indicate that your company is not living up to customers’ expectations.

You need to understand your customer retention rates in order to find out why customers are leaving. Here is a simple formula to calculate customer retention rates. Customer retention rates = (the number customers at the end a period – The number of new customers in the period)/the total number of customers at the beginning of the measured period x 100%

Because they aren’t expected to leave during this period, the new customers aren’t included in the calculation.

How to Increase Customer Retention Rates

  • Create customer loyalty programs – Rewarding customers who shop at your store will motivate them to buy more. This is an example from e.l.f. Cosmetics offers its Beauty Squad loyalty program:
  • Get feedback from customers about your experience. Customers often stop purchasing from businesses for a variety of reasons. It’s important to find out what customers think of your business before they leave. It will let them know that you care about them. SuperOffice reports that 68% of customers quit companies believing they don’t care.
  • Cross-sell and upsell to customers to keep them coming back. You can sell better products to customers by using customer data. Cross-selling complementary products will increase their purchasing power and help them buy more.
  • Pay attention to your buyers’ actions after they make their first purchase. The chances of them buying again are lower if they go too long without purchasing. You can send promotional offers to buyers who have not purchased your product in a while (depending on what product they are buying).

7. Customer lifetime value (CLV)

What is the average value of a customer to you?

Customer lifetime value (CLV), is the monetary contribution of a customer to your business over their entire customer relationship. It’s a critical metric that you should measure for your e-commerce business.

This value can be compared to the total cost of attracting and maintaining a customer. Simply put, if your costs exceed your CLV, you are at loss.

CLV also helps you to understand the effectiveness of your operation. Are you converting the most visitors to your website? Are the marketing departments achieving great results with their limited budget? Are employees reaching their goals?

These questions will help you increase your CLV. How do you measure the CLV of your ecommerce store?

Here’s an easy formula: Customer lifetime value = Average value of a Purchase x The number of times the customer buys within a Year x The average number of Years they will be customers

If you have a jewelry shop with a $500 average purchase and customers who buy four times per year, and stay loyal customers for five years, your CLV would be: CLV = 500 x 4 = $5,000

You can also calculate the CLV for different marketing channels. Bonobos, for example, increased the lifetime value of its customers by 20% by identifying the channels that attracted their highest-value customers.

How can you improve your CLV now that you know what it is?

How to Increase Customer Lifetime Value

  • Customers will respond positively to promotional offers. Especially if it’s a product they are passionate about, most customers will be open to receiving them. You can also send them offers that relate to previous purchases.
  • Cross-sell to existing customers. Do they have an upgrade for a product that they purchased in the past? It’s possible to send it to them. You can also cross-sell by offering complementary products that complement the ones they have purchased.
  • Customer data can be used to make personalized recommendations. Have you ever felt like Amazon knows your preferences? Customers can be influenced to buy more by using their purchase history.
  • Customer loyalty programs can be run: Customers may want to be rewarded for purchasing so many products from you. These programs can help you do that.


Global retail sales, both online and in physical stores, are valued at $26.074 trillion. Last year, eCommerce sales accounted for 16.1% of all retail sales worldwide. This is a clear indication that the ecommerce industry continues to boom.

You need to monitor the right metrics if you want to reach your e-commerce revenues and profits targets in order to benefit from this boom. These metrics can give you insight into your performance.

This will allow you to see where your ecommerce store is doing well and where it can improve. These 7 ecommerce metrics are essential and you can start measuring them right away.

Are there any vital metrics you use that aren’t on this list? Let me know in the comments!

About the author

Kobe Digital is a unified team of performance marketing, design, and video production experts. Our mastery of these disciplines is what makes us effective. Our ability to integrate them seamlessly is what makes us unique.