Tracking ecommerce metrics helps you make data-informed decisions about your business, from your website and marketing to your inventory and overall offerings.
They’re crucial to growth because they show you what’s working (what to do more of) and what’s not (what to improve or do less of). And sudden changes tell you when you need to take action, stat.
Basically: Ecommerce metrics give you direction and confidence that’s further validated once you succeed.
But after years of everyone telling you to collect data—always more data!—you’re likely inundated with the possibilities.
Protect Against Analysis Paralysis When It Comes to Your Metrics
You have all the data in the world at your fingertips. But more data isn’t better data.
Knowledge is power, but too much information makes it easy to lose focus on what matters and clouds your judgment.
And when you or your teams become so overwhelmed with all the data you are or could be collecting that you end up doing nothing with it at all, it’s time to take a step back.
You can always do more later, but you won’t benefit unless you start with the metrics you need first (the ones that directly impact performance).
While vanity metrics like page views and click rates can matter, but they can’t tell you why they’ve gone up or down (unless you’re performing a strict A/B test). And they can’t help you make business decisions on their own.
Determining the Ecommerce Metrics That Matter to You
The metrics that matter to you depend on your industry, business, and offerings. With time and awareness, you can identify those that have the greatest impact on your business objectives.
And when selecting metrics, that’s where you should always begin—with your objectives.
To start, ask yourself and your marketing teams:
- What are our goals, and how do we determine success?
- If this metric changed, how significant would the impact be?
- Will tracking this metric affect the actions we take?
- Will improving this metric improve other metrics?
- Is tracking it worth the effort?
Schedule time to regularly check in with these questions to ensure efforts stay relevant and resources well spent.
How Often Should I Check My Ecommerce Metrics?
How often you should review your metrics will vary somewhat with the size of your business and resources, but there are recommended intervals based on how much each metric can even tell you in a given amount of time.
Some metrics won’t say much after one week, no matter how obsessively you check them. Others may indicate a fix needed pronto.
It’s a bonus that not checking every metric daily protects against overwhelm.
Your daily metrics function as a general health check to ensure everything is running smoothly. You don’t need to dig deep unless you see something concerning, like an indication of a page error or bug.
Look at these daily:
- Traffic and impressions
- Simple engagement metrics
Weekly metrics are for checking campaigns or site elements that can benefit from regular analysis to improve performance but would be overkill if done daily.
Review these weekly:
- Cart and checkout abandonment rates
- Return on ad spend (You may also look at campaign specifics, like views and clicks.)
Check average order value (AOV) every other week. As a more stable metric less influenced by weekly shifts, you likely don’t need to review it more often than this.
Your monthly ecommerce business metrics are optimal for assessing your grander acquisition and retention strategies (though this may fluctuate with your marketing patterns), as well as customer behaviors you want to influence.
Check these out monthly:
- Channel mix metrics
- Cost per acquisition
- Customer acquisition cost
- Return (or refund) rate
- Program participation rates
- Contribution margin
- Net profit (Large, stable companies may measure this one quarterly)
This is also a good time to review any customer feedback you may have received and make plans to implement.
These are the metrics best viewed over an extended period due to the nature of what they represent. It would be silly to track customer lifetime value (CLV) daily when it measures value over a lifetime and won’t change much day-to-day.
Look at these quarterly:
- Customer retention rate
- Time between purchases
- Net promoter score
- Magic number
We also advise taking time quarterly to assess your overall goals, budget, and strategy according to where you now stand.
- Ecommerce performance metrics and frequency should depend on what you sell and the size of your company. (E.g., an insurance provider won’t have to account for returns but will account for refunds to early switchers.)
- Your ideal frequency may occasionally change with campaigns or seasonal efforts, but what we’ve suggested should still apply in most cases.
- You can look deeper into your more frequent metrics for patterns and improvements after longer intervals. (E.g., check traffic daily for sudden alarms but analyze changes or conduct tests weekly/monthly).
The Ecommerce Metrics You Should Be Tracking
Need more of an explanation regarding the metrics listed above, why they matter, or how to calculate them?
It’s your lucky day because we’re going to address all of that now.
What it is: You already know this one, but traffic is the number of visitors your store or website gets within a specific timeframe.
Why it matters: Traffic is the foundation for all other performance indicators. Without sufficient traffic, your potential for conversions and revenue is limited.
Moreover, understanding the sources and quality of your traffic helps you make informed decisions about where to allocate resources for greater success.
Traffic is the simplest of metrics on its own, but the real power comes from segmentation.
If you need to increase traffic, assess where current traffic is coming for which channels to double down on. Similarly, you can segment based on psychographics and demographics to see which audience segments are your most valuable.
Assessing new vs returning users can also tell you if your acquisition efforts are working (new traffic) or if you have a solid product, experience, and market fit (returning traffic).
How to calculate: Tracking traffic is pretty straightforward in Google Analytics (GA), though different levels of segmentation take extra work to set up.
What it is: Engagement encompasses a range of metrics that indicate how visitors interact with your website, such as session duration and scroll depth.
Why it matters: High engagement indicates that visitors find your content relevant and engaging, while low engagement (especially people leaving without taking any action) signals issues with site speed, content quality, or a poor match with user intent and your offerings.
These metrics can guide you in refining your audience targeting, optimizing your website pages, and enhancing site performance.
How to calculate: Track the engagement metrics relevant to your site’s user flows via analytics tools like GA.
What it is: Conversion rates tell you how many website visitors take a desired action.
Conversion rate optimization (CRO) is the practice of optimizing your website and campaigns to increase your conversion rate.
For ecommerce businesses, sales conversion rate is often the primary focus since transactions are the primary goal. Still, you can have micro-conversions for other goals, like signing up for a newsletter or making an account.
Why it matters: Conversion rates should, at the very least, remain consistent and, hopefully, increase over time.
A decline indicates that something isn’t meeting your visitor’s needs, and it’s time to investigate how to get things back on track. You may be collecting the wrong people or need to improve your content.
You can also use your sales conversion rate to determine how much traffic you need to earn your target sales, and track micro-conversions throughout your funnel to find where leads drop off.
If you have multiple offerings, you can also use conversion rates to study your highest- and lowest-converting products or product categories for making decisions on inventory, catalog, and marketing.
How to calculate: Conversion rate = (Total number of conversions / Total number of visitors given the opportunity to convert) x 100.
If you view ecommerce benchmarks, keep in mind that average conversion rates vary drastically by product and industry.
Cart and Checkout Abandonment Rates
What it is: Cart abandonment is when someone leaves items in their cart without checking out. Checkout abandonment is when someone starts checking out but doesn’t complete the transaction.
Why it matters: Use these rates to inform win-back strategies, and recognize that a sudden increase in abandonment indicates a problem to address.
Cart abandonment is frustrating and unavoidable (the entire ecommerce industry averages a 70.19% cart abandonment rate), but you can work to decrease it.
And checkout abandonment rates are a signal of how customers perceive your checkout experience. If they made it as far as the checkout page, there’s likely something on this section of your site to optimize.
Finding out at what page or part of the checkout most customers leave is a good way to find the pain point to fix.
How to calculate: Abandonment rate = (1– (Completed purchases / Initiated sales)) x 100
Average Order Value
What it is: Average order value (AOV) is how much your customers usually spend when ordering from your website.
Why it matters: Understanding AOV makes it possible to drive more value from the traffic you already get, and it reveals how well pricing, cross-selling, upselling, and bundling initiatives are working to maximize revenue.
You can also look at the products most often bundled together to improve these initiatives.
The more you can get first-time buyers to increase their AOV by buying more than one item, say through a kit, the more likely they are to become long-term customers. After all, the more products someone tries, the more likely they’ll like one of them and return for it.
How to calculate: AOV = Total revenue for a period / Total number of orders completed that period.
For example, if you sell $1,000,000 of product this month through 5,000 orders, then your AOV is $200 (1,000,000 / 5,000 = 200). This number varies greatly based on your offerings.
What it is: Your return rate (also called a refund rate) is a way to measure how often your customers return products as a percentage of total sales.
Why it matters: Return rate is vital to the health and profitability of your business as returns are essential to offer but expensive to process (not to mention the potential that an unhappy customer may be a lost customer).
You should keep an eye on your total return rate as well as look at return rates across segments:
- If a certain type of customer has particularly high return rates, it may be a poor audience choice.
- If a certain product has high return rates, the product may be of low quality, or your website may need to do a better job of setting expectations through images and copy.
How to calculate: Return rate = (Returns in a period / Number of products sold in period) x 100.
You can also track the rate based on revenue, in which case: Refund rate = (Dollar value of products returned in a period / Dollar value of sales in a period) x 100.
Customer Retention Rate
What it is: Your customer retention rate (CRR) is the percentage of existing customers who remain customers after a given period. It’s all about how well your company maintains the customers it earns.
Why it matters: Acquiring new customers and retaining current customers are both vital for long-term business growth, but you’ve surely heard that keeping a customer is cheaper than earning a new one.
Losing customers as soon as you acquire them means something needs to be fixed with either your products, audience, purchasing experience, or retention strategy. (If all these things are perfect, people will be excited to buy again.)
A high retention rate implies high customer satisfaction and loyalty.
How to calculate: CRR = ((Total customers at the end of a period – Total new customers gained during that period) / Total customers you had at the beginning of that period) x 100
Time Between Purchases
What it is: Time between purchases is precisely what it sounds like—the amount of time that usually passes before a customer or group of customers makes another purchase.
Why it matters: Knowing the average time between purchases (which may vary for each of your products, by the way) is valuable for three reasons—
- You can increase revenue and CLV by working to shorten this period.
- You know when to retarget current customers.
- You can identify customers at risk of not returning based on the time since their last purchase.
How to calculate:
Purchase Frequency = Total orders in a period / Total unique customers in a period
Time Between Purchases (TBP) = Total days in the period / Purchase frequency
Customer Lifetime Value
What it is: A customer’s lifetime value (CLV) is the total profit your business can expect to make from a customer throughout your relationship with them.
Why it matters: The better the relationships you build with your customers, the higher your customer lifetime values, which signals—
- Higher earnings per customer
- More consistent earnings per customer
- Higher brand loyalty
- Better brand viability
- Good product-market fit
And while customer retention is more cost-effective than acquisition, you still need acquisition to grow your business. CLV can help you weigh how much each customer is worth (how much you’re willing to spend to acquire them).
How to calculate: CLV = Average order value in a period x Average purchase frequency in a period x Number of periods the average customer is retained
If you sell high-ticket products, you may have lower purchase frequencies (if a customer ever needs to buy again). In this case, you’ll want to look into other ways to increase your CLV.
Cost Per Acquisition
What it is: Cost per acquisition (CPA) is how much it costs to acquire a lead.
You can also look at it as the cost to acquire a customer from a specific campaign or the cost to get a customer to do a particular task (like making an account or signing up for a free trial).
Why it matters: Acquiring customers doesn’t start or end with the Buy Now button, especially if you have a considered product or longer sales cycle.
Knowing how much it costs to acquire a lead or get a customer to perform an action that may lead to a sale helps you decide if you’re willing to continue spending that money.
It’s especially helpful if you’re looking to grow profitability more efficiently, through the right audiences, channels, and campaigns.
How to calculate: CPA = Total spent to acquire lead / Total new leads acquired
Customer Acquisition Cost
What it is: Not to be confused with cost per acquisition, customer acquisition cost (CAC) is how much you spend to get a paying customer (when they finally pay for the first month after a trial or make a purchase through their account).
Through this metric, you can think of your marketing efforts as buying customers.
Why it matters: Your customer acquisition cost is vital to understand how much you spend to acquire each customer and whether it’s healthy or unsustainable.
You can improve profitability by:
- Increasing your lifetime values to further surpass your acquisition costs.
- Rethinking your methods of acquisition and spending.
How to calculate: CAC = Total sales and marketing costs for a period / Total new customers acquired during that period
The trickiest part of determining CAC is accounting for all sales and marketing costs.
It’s also worth noting that your CAC will increase over time, no matter what, for reasons ranging from greater competition to ever-increasing advertising fees. You’ll want to adjust accordingly and create a retention program to protect profitability.
Return on Ad Spend
What it is: Return on ad spend (ROAS) is a metric that compares how much you spend on advertising with the revenue earned from it.
Why it matters: ROAS tells you when your campaigns are and aren’t working and protects you from spending more than you earn. Combined with forecasting, you can also estimate how much revenue you may gain from future advertising efforts.
If you have a low return on ad spend, you might try optimizing your ads, targeting, landing pages, or web experience.
But be careful about looking at this metric (or any) in isolation.
ROAS doesn’t innately account for things like customer segmentation or profitability. You’ll want additional context from other data when making big decisions.
How to calculate: ROAS = Total revenue from advertising / Total cost of advertising
Channel Mix Metrics
What it is: This is a fancy way of saying you should keep track of the performance coming from each of your marketing channels.
Many metrics can be tracked for each channel, including traffic, conversion rate, abandonment rate, revenue, and AOV.
You’ll want to consider channels like:
- Organic search
- Paid search
- Email marketing
- Social media
Why it matters: Knowing on a channel-by-channel basis how well each is working allows you to make informed decisions about which channels are worth investing in and to what degree.
It may also indicate that a channel needs reworking—maybe the messaging is inconsistent on one of your platforms.
Owned mediums, especially email, are crucial for ecommerce and should be monitored closely.
How to calculate: You want to use an analytics tool to track this data by channel, like Google Analytics.
VIP Customers & Loyalty Program Participation
What it is: If you have a loyalty program, we’re talking metrics related to the performance of that program. If you don’t, we’re just talking about your VIP customers.
Why it matters: Your VIPs are your top-tier customers (whether they buy from you all the time or spend a crap load of money when they do) and, thus, the people you want to keep at all costs. They’re also most likely to recommend your service or product to others.
When you connect with and encourage your VIP customers or get more use out of your loyalty program, you increase CLV and the overall profitability of your business.
Monitoring loyalty program engagement can also indicate when adjustments need to be made. For instance, a low use of rewards points might mean you should create reminders.
How to calculate:
- VIP. How you calculate your number of VIP customers depends on how you choose to define them based on your business. You can use total number of purchases, AOV, willingness to make full-price purchases, estimated CLV, or a combination of these. For example, you might use your top 10% of customers based on CLV. If your product is only purchased once a year, a suitable purchase frequency for you differs from a product purchased monthly. You can rely on a customer relationship management system to help track this sort of data.
- Program participation. You can track program participation in terms of enrollment and use of program perks or tools. The tool you use for your loyalty program should track enrollment numbers for you. For engagement, divide total engaged users by total users.
Net Promoter Score
What it is: Your net promoter score (NPS) is how likely customers are to recommend you.
Why it matters: Not only are word of mouth and recommendations one of the best ways to acquire new customers, but your NPS can be indicative of the quality of your product and customer experience.
How to calculate: Conduct a survey asking customers how likely they are to recommend your brand on a scale of 1 to 10. Below a 7 is a detractor, 7 to 8 is neutral, and 9 to 10 is a promoter.
NPS = Percentage of promoters – Percentage of detractors.
Your resulting score can range from -100 to +100.
We recommend going a step further and asking for the reasons behind their selection. Negative feedback equals opportunities to improve. Positive feedback equals messaging you can use in marketing materials.
What it is: Net profit is how profitable your business truly is.
Why it matters: You should always understand how much cash is flowing into your company by tracking revenue regularly—at least once per month. But you should prioritize profit over revenue.
Focusing too much on growth goals through revenue can easily lead to overspending and lost profitability. It’s possible to make more revenue and not make a profit, which is pointless.
By focusing on profit, you make your goals not just about selling but selling efficiently.
How to calculate: Net profit = Total revenue – Total expenses.
A challenging part of tracking net profit is keeping tabs on all expenses. Here’s a starter list, but you may have others:
- Employee wages and benefits
- Customer service
- Professional services (from lawyers to accountants)
- Tools and integrations
- Payment processing
- Web development and upkeep
What it is: Contribution margin is the revenue left after paying for all variable expenses related to producing a product.
It’s different from net profit, which subtracts fixed expenses, like rent or salaries, in addition to variable ones.
Why it matters: Contribution margin is a nifty business metric for planning because it allows you to determine how much of each sale goes to covering your fixed costs.
You can also use contribution margin on a per-unit basis (aka dollar contribution per unit). This variant gives you the profit potential of each of your products and how they contribute to your company’s profit overall.
How to calculate:
Contribution Margin = Total sales revenue – Total variable costs.
Dollar contribution per unit = Selling price per unit – Variable cost per unit.
Variable costs to consider include:
- Ad spend
- Cost of goods sold
- Payment processing fees
- Fulfillment costs
What it is: An ecommerce metric for subscription-based businesses, the magic number is a ratio of recurring revenue to sales and marketing expenses.
Why it matters: The magic number helps SaaS and other subscription services evaluate spending efficiency.
If you have a magic number below 0.75, you may be spending too much on customer acquisition, have a poor product-market fit, an ineffective pricing strategy, or something along those lines. Either way, you know to look into it.
If you have a magic number over 1, it means you can spend more on acquisition to support your growth.
How to calculate: Magic number = ((Current quarter’s revenue – Last quarter’s revenue) x 4) / Last quarter’s total sales and marketing spend.
Another Perspective: Ecommerce Success Metrics Across the Buyer’s Journey
A helpful way to think about some ecommerce metrics is through the part of your marketing funnel they align with (and inform you on).
We recommend breaking your metrics down in this way so you can pinpoint where in the funnel you may be losing potential customers and make data-driven improvements.
Below, we’ve assigned example metrics to the discovery, consideration, conversion, and retention parts of the funnel.
You’ll notice that one type of metric can belong to multiple stages. For example, if you have content that supports the buyer’s journey, then traffic to this content can fall under the part of the funnel that content serves.
- Traffic and engagement to top-of-funnel pages
- Email list growth rate
- Email opens and click-throughs
- Unsubscribe rate
- Cost per acquisition
- Traffic and engagement to middle-of-funnel pages
- Conversion rate
- Cart and checkout abandonment rate
- Average order value
- Customer acquisition cost
- Customer retention rate
- Program participation rates
- Time between purchases
- Customer lifetime value
- Return or refund rate
5 Insights for Success While Tracking Metrics
Through experience with our and clients’ analytics, we’ve gathered five insights that will help you get more out of your tracking.
- Decide how you measure success. When you’re not careful, different platforms can and will give you slightly different data based on different factors. If you’re unsure what to go with, you may want to do incrementality testing to find your truths.
- Set short and long-term goals and benchmark progress against past measures. You can also compare your performance to industry benchmarks, but be careful, as what’s “good” can vary drastically from business to business.
- Have a useful dashboard. Just do it. The automation and easy visualization will save you hours upon hours of gathering and interpretation time.
- Always ask questions when viewing metrics. It’s so easy to make a report, check it regularly, and stop there. But the real value only comes when you ask questions about the data you’re seeing. And when you don’t question the status quo, you stagnate.
- Always have a test running. (We’re really fighting stagnation here.) Whether you’re testing ads, a landing page variant, a new contact form, or a homepage heading—always be looking for a way to increase profitability.
Use Metrics to Tell Your Fortune (Forecast)
Forecast monthly, quarterly, and annually. Weekly for special weeks. (Black Friday, anyone?)
Everyone (us included) talks about how you can use ecommerce analytics metrics to find ways to improve performance and make decisions with confidence.
The benefit often left behind is the ability to use your data to predict and plan for success.
Predict which months are slowest, and plan for how to change that (or, at the very least, don’t overstock). Predict and prepare for when you’ll be busiest and what you might do with the extra revenue.
When you’re brave enough to look forward and say what you expect, it forces you to pay closer attention and invest in what works.
FAQs About Ecommerce Metrics
How do you measure success in ecommerce?
Ecommerce businesses measure success through the key metrics relevant to their business (like traffic, conversion rate, customer acquisition cost, customer lifetime value, cart abandonment, and profit) that they compare to benchmarks and internal goals.
What are ecommerce KPIs?
Key performance indicators (KPIs) are metrics used to measure business success. While metrics are measurable data points used to assess your business, KPIs are the subset of metrics you strategically choose to represent your success based on your business objectives.
What is the best way to track my metrics and KPIs?
The best way to track your metrics and KPIs for ecommerce is through analytics and reporting tools built for the job, like Google Analytics. Having an ecommerce agency set up your analytics can ensure you use these tools correctly to capture clean, organized, and actionable data.
What is the most important metric for an online business?
While the most important ecommerce metrics depend on the specific goals and nature of the business, revenue and profitability are the overarching key metrics that other metrics seek to add insight into and improve. Other key ecommerce metrics include sales conversion rate, average order value, customer lifetime value, and cost per acquisition.