Consistently measuring KPIs (key performance indicators) is essential for hitting profit goals, staying competitive and growing your business and marketing efforts. Ecommerce metrics and KPIs indicate whether you’re nailing your goals or falling short with room for improvement.
Ecommerce business leaders should monitor their data to inform marketing and sales decisions and retain a steady path toward success. But how do you determine the most important ecommerce KPIs to track?
Let’s take a look at the best KPIs for measuring the performance of an ecommerce business:
Tracking Ecommerce KPIs in the Marketing Funnel
The sheer amount of data and analytics tools available can quickly become overwhelming if you don’t have some core KPIs in place.
Start by setting up your ecommerce business on an analytics platform, if you haven’t done so already. Google Analytics is a free tool that tracks most of the ecommerce KPIs we’ll discuss in this post.
Now, let’s talk about how to track the top KPIs for ecommerce at every stage of the marketing funnel: discovery, consideration, conversion and retention.
At this stage of the funnel, you should focus your marketing efforts on generating brand awareness and building demand for your product.
Users in the discovery stage are just learning about your brand and what you’re all about. You’ll want to focus on KPIs that disclose where your new visitors are coming from, how often they’re coming to your site and whether they’re willing to engage with your content.
Your top five discovery KPIs should include:
1. Traffic Sources and Mediums
In Google Analytics, keep a close eye on the Source and Medium reports. A ‘source’ refers to “the origin of your traffic, such as a search engine (for example, Google) or a domain (example.com).”
The ‘medium’ indicates the “category of the source, for example, organic search (organic), cost-per-click paid search (CPC).”
You can also review the Acquisition Device report to see how many people are visiting your site via desktop, mobile or tablet. Most online retailers are seeing an explosion of mobile traffic – a third of their sales happen through mobile devices.
2. Organic Traffic Sessions
If you rely heavily on inbound traffic from blogs and SEO, this metric will show how many visitors are finding you from search engines. It’s always wise to track organic traffic sessions – they’re a clear indicator of your website’s search engine performance, credibility and authority.
3. SEO Keyword Positions
Use a tool like Moz or SEMrush to track important keyword positions over time. You’ll want to increase rankings (or maintain top rankings) for your target keywords. Higher rankings = more visibility, more qualified buyers and more revenue.
4. Ad Impressions
If you’re running any ads on Facebook, Instagram or Google AdWords, you’ll want to track the number of impressions, which is how many times all users see your ad.
5. Ad Frequency
Ad frequency shows how many times someone has seen your ad. Keep in mind that high ad frequency can indicate audience fatigue, so be sure to test a variety of creative.
In the consideration stage, you want to get potential and existing customers to engage with your brand. The most important KPIs in this stage of the funnel relate to inbound traffic, email and social media engagement.
We’ll begin with onsite traffic metrics, which are good indicators of your site’s quality and performance. Google Analytics makes it easy to track these traffic metrics within a single dashboard.
Sessions indicate the number of visits to your site. All the interactions a visitor has on your website within a given timeframe (30 minutes) will register as a single session.
7. Bounce Rate
Bounce rate displays as the percentage of users who only visit a single page on your site before leaving. Lower bounce rates indicate that users are staying on a page and are likely reading your content.
8. Pages Per Session
A higher number of pages per session says that users find your content engaging and are willing to explore more of your site. A good goal for this KPI is two pages per session.
9. Average Session Duration
This is the average time in seconds that users stay on your site. Shorter average session durations indicate users aren’t finding what they are looking for within the first few seconds of browsing your site.
A high number of pages per session with low session duration might indicate page-flipping behavior due to irrelevant content or disinterest.
10. Click-through Rate
Tracking CTR helps you understand your campaigns’ success. When someone takes the next step to fill out a form or provide their email address, it’s a sign that your content or offer is compelling and relevant.
Let’s dive into email engagement metrics next.
11. Email List Growth Rate
Your list should be growing consistently. If you’re emailing offers to a stale list of contacts, your messages are falling on deaf ears. If your subscriber list isn’t growing, explore ways to expand your audience.
Formula: (Total number of new subscribers – unsubscribers) ÷ Total number of email addresses on your list
12. Email Open Rate
This is the percentage of recipients who open your email. A low or declining open rate could be a sign that your subject lines aren’t engaging enough.
Formula: Unique open emails ÷ (Total number of emails sent – total number of bounced emails)
13. Email Click-through Rate (CTR)
This is the percentage of recipients who click on links in your emails. A higher click-through rate signifies interest in your product or content and increases the chance of a conversion.
Formula: (Total clicks OR unique clicks ÷ number of delivered emails) x 100)
14. Email Conversion Rate
This is the percentage of email recipients that purchase after clicking through links in your email campaigns.
Formula: (Total sales from emails ÷ total emails delivered) x 10)
15. Email Unsubscribes
Keeping track of your unsubscribe rate is helpful for calculating list growth rate. If you notice a staggering increase in unsubscribes, you might want to reevaluate your email marketing strategy to create better content that appeals to your database.
Pro-tip: Unsubscribes are inevitable for any list, so don’t fret over a lost contact. In fact, unsubscribes improve the quality of your list, allowing you to focus on contacts who actually want to hear from you.
Next, let’s review the top social media KPIs to track for your ecommerce business.
16. Engagement Rate
Depending on the social platforms you’re using, there are few ways to assess overall social engagement. Engagement can come in the form of likes, comments, shares, saves, clicks or profile visits, to name a few.
Higher engagement activity shows that your social audience finds your content entertaining or helpful.
Is your social media content getting visibility? Post impressions indicate how many times your content is shown on a social platform.
To increase impressions, engage with other users by tagging or mentioning them in your post, or use hashtags to reach a wider audience.
This metric measures link click-throughs from social posts or profiles. A higher number of clicks means that users are interested in your content and want to learn more.
Some marketers consider followers to be a vanity metric, but it’s still important to track and keep an eye on.
Follower growth indicates you’re capturing the interest of more prospects, and it also helps with overall social reputation. For best practice, compare your follower growth to your engagement rate to get a true understanding of how well your social media content is performing.
Tracking online sales and revenue is vital for any ecommerce business. Understanding the following metrics will help you uncover sales trends and tweak strategies to convert more visitors into buyers.
Important ecommerce conversion KPIs include:
20. Cost of Customer Acquisition (CoCA)
CoCA (sometimes written as customer acquisition cost - CAC) helps you calculate the value of your marketing efforts. To determine CoCA, add together all marketing costs, services, software and overhead, and divide by the number of customers acquired.
21. Return on Ad Spend (ROAS)
Which ad campaigns genuinely provide value for your business? By understanding ROAS, you can determine how to allocate your ad dollars best. The calculation is simple: revenue divided by cost.
22. Number of Online Transactions
Tracking total transactions is an important baseline metric for calculating other sales KPIs. Be sure to monitor these month-over-month, quarter-over-quarter and year-over-year. And, track the success of discounts and promotions to gauge performance relative to regular sale days.
23. Average Order Value (AOV)
Monitoring your AOV can help you influence sales trends and boost revenue over time. To increase average order value, consider selling bundles or implementing an upsell widget to promote other relevant products to customers who are about to check out.
Formula: Total sales ÷ Number of transactions
24. Cart Abandonment Rate
Look to your ecommerce platform for this information. To reduce cart abandonment rates, many ecommerce retailers send abandoned cart emails or use remarketing ads to re-engage interest.
25. Ecommerce Conversion Rate
Your conversion rate is the percentage of visitors that convert into buyers. The average ecommerce website conversion rate is 1.6 percent.
Formula: Total number of sales ÷ total number of sessions
26. Sales Generated by Channel
Review this metric to understand what channels are worth the investment, and what channels you can scale back on.
Repeat business is a crucial factor in growing and scaling your ecommerce business. Increasing customer retention rates by just five percent can lead to a profit increase of 25-95 percent. In the long run, it’s cheaper to retain existing customers (and build their loyalty) rather than acquire new ones.
Here are three ecommerce retention KPIs you should have on your radar:
27. Average Customer Lifetime Value (CLV)
Your CLV is a cornerstone ecommerce KPI. It is the average total amount spent by each customer over their lifetime. Your CLV should always be greater than your cost per customer acquisition.
Formula: Average order value x Purchase frequency
28. Repeat Purchase Rate
This is the proportion of repeat customers from your overall customer base. Repeat customers are happy customers that increase your business’ profitability, so keep a close watch on this metric.
Formula: Total customers that have purchased more than once ÷ Total number of customers
29. Order Gap Analysis
This metric shows the average time between two purchases from a single customer. This insight is helpful for marketing automation efforts. You can automatically remind customers to repurchase after the average time between transactions.
Formula: 365 ÷ Purchase frequency metric = Average number of days between purchases
30. Return on Investment (ROI)
ROI matters. It’s what CEOs and shareholders want to hear about, and it clearly shows what marketing efforts are working (or not working).
The basic formula for ROI is simple: Net profit ÷ total investment (expressed as a percentage). However, keep in mind that the complexity of your ROI formula can vary depending on how your business operates.
Grow and Scale Your Ecommerce Business with Human
These ecommerce KPIs will help you sharpen your ecommerce marketing efforts. But knowing how to analyze these metrics together and extract real business takeaways is key.
At Human, we understand that all successful marketing strategies are rooted in real data. We’re passionate about tracking KPIs that matter and helping ecommerce businesses turn soft metrics into real ROI. With our help, you can take your ecommerce business to the next level and see leads and results for years to come.
Ready to start leveraging ecommerce KPIs to refine your marketing strategy and convert more customers? Let’s chat.