For ecommerce businesses, every decision is guided by data. Consistently measuring key performance indicators (KPIs) is essential for hitting profit goals, staying competitive and growing your business.
KPIs are true indicators of whether you’re hitting your goals or falling short month after month. The data you gather from KPIs will inform your business decisions and keep you on a steady path toward success.
With your company’s prosperity relying so heavily on data, how do you decide which ecommerce KPIs to track?
Ecommerce KPIs in the Marketing Funnel
Gathering as much information as possible is important. But the sheer amount of data 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 system. Google Analytics is a free tool that tracks many of the KPIs we’ll discuss in this post.
Let’s talk about how to track the most important ecommerce KPIs for 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.
Let’s say you have a goal to grow site traffic by 20 percent in one year. Your KPIs should include:
Traffic sources: This metric shows many people are visiting your site via desktop, mobile or tablet. Most ecommerce companies are seeing an explosion of mobile traffic – a third of ecommerce sales happen through mobile devices.
Organic traffic: If you rely heavily on inbound traffic from blogs and SEO, this metric will show how many visitors are finding you from search engines.
Click through rate (CTR): Your CTR reveals how well your site is performing from search engine results pages. It indicates how compelling and relevant your search results are.
SEO keyword positions: Use a tool like Moz to track important keyword positions over time. When your rankings are on an upward trend, more people are being exposed to your ecommerce site.
Online and offline impressions: If you’re running any ads on Facebook, Instagram or Google AdWords, you’ll want to track the number of impressions – i.e., the number of times your ads are served to users.
In the consideration stage, you’re trying to get potential and existing customers to engage with your brand. The important KPIs in this stage of the funnel are related to inbound traffic, email and social media engagement.
Onsite traffic metrics: These metrics 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: All the interactions a visitor has on your website within a given timeframe will register as a single session. Sessions usually end after a user is inactive for 30 minutes.
- Bounce rate: Bounce rate is the percentage of users who only visit a single page on your site before leaving.
- Pages/session: This is the average number of pages viewed per session. More pages per session indicate 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.
- Average session duration: This is the average time in seconds that users stay on your site. A short average session duration indicates users aren’t finding what they are looking for within the first few seconds of being on your site.
Remember: It’s important to look at all these KPIs together to get a realistic picture of your onsite traffic. If you have a high number of pages per session but a low session duration, those metrics could indicate page flipping behavior caused by irrelevant content or disinterest. Always look at the big picture and keep your unique goals in mind when analyzing ecommerce KPIs.
Email Engagement Metrics
- 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.
(Total number of new subscribers – unsubscribers) ÷ Total number of email addresses on your list
- 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.
Unique open emails ÷ (Total number of emails sent – total number of bounced emails)
- Email CTR: This is the percentage of recipients who click on links in your emails. This metric signifies interest in your product and increases the chance of conversion.
(Total clicks OR unique clicks ÷ number of delivered emails) x 100)
- Conversion rate: This is the percentage of email recipients that purchased after clicking through links in your email campaigns. Determine your conversion rate by using this calculation:
(Total sales from emails ÷ total emails delivered) x 10)
- Unsubscribes: Keeping track of your unsubscribe rate is helpful for calculating your list growth rate.
Social Media Engagement Metrics
- Average shares per post: This metric indicates the average number of times users share your posts over a given period. A high number of shares per post shows that users find your content engaging, entertaining or helpful.
- Comments per post: Are you striving to create an online community? A high number of comments per post shows your audience is engaging with your brand.
- Clicks per post: This metric measures link click-throughs from social posts over a period of time.
- Likes per post: Depending on the social channel, these can come in the form of likes, thumbs up or favorites. To calculate your average likes per post, sum up the likes on an individual social media platform and divide it by the number of posts on that platform in a given period.
Tracking online sales and revenue is imperative to any ecommerce business. Understanding the following metrics will help you uncover sales trends and tweak strategies to convert more visitors into buyers.
Let’s say you want to boost sales by 10 percent in the next quarter. Important ecommerce KPIs will include:
Number of online transactions: Tracking total transactions is an important baseline metric for calculating other sales KPIs.
Average order value (AOV): Monitoring your AOV will help you understand and influence sales trends.
- Total sales ÷ Number of transactions
Sales conversion rate: Your conversion rate is the number of visitors that convert into buyers. The average ecommerce website conversion rate is 1.6 percent.
- Total number of sales ÷ total number of sessions
Sales generated by channel: Studying this metric will help you understand what channels to invest more money and time into, and what channels you should 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.
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.
- Average order value x Purchase frequency
Repeat purchase rate: This is the proportion of repeat customers from your overall customer base.
- Total customers that have purchased more than once ÷ Total number of customers
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.
- 365 ÷ Purchase frequency metric = Average number of days between purchases
Tracking Ecommerce KPIs for Success
All of these ecommerce KPIs are helpful for guiding the direction of your ecommerce marketing efforts. But knowing how to analyze these metrics together and extract real business takeaways is key.
At Human Marketing, we understand that all successful marketing strategies are rooted in real data. We are passionate about tracking KPIs that matter and helping ecommerce businesses turn soft metrics into real ROI.
Ready to start leveraging ecommerce KPIs to refine your marketing strategy and convert more customers? Let’s chat.