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The most successful ecommerce and retail businesses are metrics obsessed. Virtually every marketing and business decision in these organizations is guided by data.
If you can’t measure something, you really have little chance of improving it.
Growing your store requires a focus on two areas:
- Setting the right KPIs and then tracking/measuring their corresponding metrics.
- Ensuring that you have an analytics system in place to measure all of these metrics as accurately as possible.
This guides is structured to cover the most vital ecommerce metrics at each stage of the sales funnel of an ecommerce business and their customers’ lifecycle.
Ecommerce Metrics Dashboard Template
Want to start measuring all 55 metrics right now? We’ve created a dashboard template for you. Simply copy the Google Spreadsheet and customize it for your business.
Here is an overview:
- DISCOVERY: How to analyze impressions.
- CONSIDERATION: How to analyzing inbound traffic, including what they do on your site, how they interact with email and social media engagement.
- REVENUE: How to measure micro-conversions and analyzing sales, transactions and average order value — tracking it to successful actions.
- RETENTION: How to analyze repeat orders, customer lifetime value and purchase frequency.
- ADVOCACY: How to analyze word of mouth and referral marketing stats.
So let’s now dig a little deeper into each of the stages of the ecommerce sales funnel to identify the metrics and KPIs you should be measuring on a regular basis.
Ecommerce Metrics Checklist
Ecommerce professionals often use acronyms to talk about various, common metrics they measure. Here are the top six.
- Cost Per Impressions (CPM) – (Ad Spend/(Impressions/1000): This is most commonly used to measure the rate you would pay for a online banner ad campaign or other online advertising campaign. An Impression refers to the times the ad is served on a webpage (how many times the ad is seen).
- Cost Per Click (CPC) – (Ad Spend / Clicks): This is most commonly used to measure the rate you would pay for a search engine ad campaign. CPC can also be referred to as PPC (Pay Per Click).
- Cost per Acquisition (CPA) – (Ad Spend / Orders): This is most commonly used to measure the rate you would pay for a new order or customer. CPA is often used when measuring the rate you would pay an affiliate for referring an order to you.
- Revenue Per Click (RPC) – (Revenue / Clicks): This is the amount of revenue you can expect for each click you receive to your site.
- Cost of Sale (COS) % – (Ad Spend / Revenue): This is the portion of your revenue that goes to your ad spend and is measured in percent.
- Customer Lifetime Value (LTV): This is the projected revenue that a customer will generate during their lifetime. For a full explanation of how to calculate LTV for your online store, check out this infographic.
1: Ecommerce Metrics at the Product Discovery Stage
At the brand discovery stage of the funnel, the focus of all your marketing efforts is really on generating awareness and stimulating the realization of a want of your brand/product(s) in the market you target.
The key question at this stage that all of the metrics you track will answer is:
How many people have come across our brand or the line of products we sell?
In other words, you are tracking brand awareness, impressions and eyeballs.
One caveat here is the assumption that your marketing is focused on your target audience. If it isn’t and there is no deliberate targeting in your marketing, this is a vanity metric.
Here are the key metrics to track at the top of funnel, i.e. product discovery.
1a. Brand name search
This is in my opinion is the most important marketing metric to track from day 1 all through the lifespan of your business.
The reason is simple: people searching for your brand are more likely to either convert as customers or are returning customers. This is because they are aware of your brand and intend to engage with you when they are looking for you.
To accurately track this metric, use the following sources to capture brand name search volume:
- Google AdWords: create a brand name search campaign and track impressions (not clicks) for phrase and exact match terms. The only drawback to this method is that you need to have a budget for Google AdWords. If you do have a budget, it is in my opinion the most accurate means of tracking brand name search (at least via Google).
- Google Search Console: check the search analytics report in Google Search Console under:
- Search Traffic > Search Analytics > Queries
- The check the ‘Impressions’ checkbox.
- Do this once a month and remember to change the date cohort to a full month.
- Google Keyword Planner: run a search for your brand name on Google keyword planner on a monthly basis.
- If brand name search is on an upward trend, then your marketing just might be working. You are definitely reaching more people.
You should also try and map specific publicity campaigns with brand name search. As an example, if you engaged with a group of influencers over a specific month, you may want to backtrack on brand name search during the month of the campaign to see if there was any lift.
All advertising platforms you utilize will provide metrics on impressions (or cost-per-impression), i.e. the number of times your ads are served to their audience.
Here is a brief list of channels and the key impression metrics.
Facebook & Instagram’s ‘Reach’ metric
Facebook measures unique impressions with the a ‘reach’ metric.
Facebook’s reach metric is the number of people that have seen your ads at least once. The key point to note here is that the reach metric is different from impressions, which may include multiple views of your ads by the same people.
Other Facebook metrics related to impressions you want to pay attention to are:
- Cost per 1,000 people reached: The average cost to reach 1,000 people.
- Impressions: The number of times your ads were viewed.
- CPM (Cost per 1,000 Impression): The average cost for 1,000 impressions.
- Frequency: The average number of times each person saw your ad.
Note that the above is for paid Facebook advertising. In order to track total number of people that have generated impressions in both organic and paid Facebook posts, use the reach metric in the Facebook Insights report.
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YouTube and Other Video Hosting Platforms
The YouTube impression metric you want to pay attention to is ‘Views.’
This will apply to all other video hosting platforms that you actively market on such as Facebook videos or Vimeo.
Also ensure that you understand the time duration a video is watched in order to be classified as a view on across all platforms.
YouTube’s video metrics classifies a video that has been watched for 30 seconds or more as a view, while Facebook classifies a video view as 3 seconds or more.
Google AdWords and Bing Ads
In AdWords and Bing Ads, you want to pay attention to the ‘Impressions’ metric, which is the number of times your ads are shown on search result pages or the display network on both platforms.
In AdWords, pay attention to the following metrics:
- Search Impression Share: Your impression share strictly for impressions generated through the Search Network
- Display Impression Share: Your impression share strictly for impressions generated through the Display Network.
Google Search Console
Pay attention to the ‘Total Impressions’ metric on Google search console on a monthly basis.
It gives you an idea on the number of times your website was served as a result on Google’s organic search result, serving as a good KPI for overall reach. If your reach far outweighs your traffic, it’s time to think about revising your title structure to encourage more click through. I also track the ‘Average Position’ metric on a monthly basis.
Influencers and partners
When reaching out to potential media partners and influencers, you will need to better understand their audience reach and readership numbers (for bloggers).
Ask for details about the number of monthly readers (total and organic) as well as the size of their email list. On your own, research their social media followings and how engaged their audiences are across platforms.
For instance, they may have a large Twitter following, but they don’t get many retweets. It may be better to leverage your partnership through their Instagram platform, instead.
If you advertise on TV, want to sponsor a podcast or media, you will negotiate on the basis of the ‘Reach’ metric, i.e. how many people are likely going to view your commercial.
Remember that relevancy is just as important (if not more important) than reach.
2: Ecommerce Metrics at the Consideration Stage
At the consideration stage of the funnel, the focus of all your marketing efforts should be on convincing potential and existing customers to engage with your brand, with the end goal of potentially purchasing your product(s).
The key question at this stage that all of the metrics you track will answer is:
What portion of people that have come across our brand are engaging with our brand?
In other words, you should be tracking and analyzing metrics related to inbound traffic to your store, email and social media engagement.
Here are the key performance indicators.
2a. Onsite traffic metrics
These are the most important on-site traffic key performance indicators you should measure on a monthly basis. These metrics can all be found in Google Analytics, the easiest way to establish measurement on your website. There are many other great web analytics tools out there that offer comparable metrics, though these other platforms sometimes call them by different names. For example, Sessions in Google Analytics goes by Visits in other platforms
- Sessions: When tracking website sessions, remember that a single user can open multiple sessions on various devices or browsers. Sessions typically end after 30 minutes of inactivity. All interactions by a visitor on your website within a given timeframe such as page views, events, social interactions, and ecommerce transactions will register as a single session.
- Users: In Google Analytics, the Users metric does not necessarily equate to individual users or people. It is actually a cookie set by each visitor’s browser. So, if a customer of yours logged in from her phone and then her desktop computer, each session will register as two users. The walk-around to this anomaly is setting up Session Unification by integrating logged in user data with Google Analytics.
- Pages/Session: The ‘pages/session’ metric is the average number of pages viewed per session.
- Bounce Rate: Bounce rate is the percentage of single page visits (or web sessions).
- Average Session Duration: Average session duration is total duration of all sessions (in seconds) / number of sessions. You want to track this metric alongside bounce rate to understand how engaging your store it. You also want to use segments such as new visitors vs returning visitors.
- New Users: A visitor who did not have Google Analytics cookies when they hit the first page in this visit. If a visitor deletes their cookies and comes back to the site, the visitor will be counted as a new visitor.
2b. Google Search Console
If a significant amount of inbound traffic to your ecommerce store comes from Google, then you should be tracking these Google Search Console metrics on a monthly basis.
- Clicks: Total count of clicks from Google search results pages (SERPs) to your website. Track it alongside the Impressions metric and compare with Google Analytics metrics such as Sessions and Unique Pageviews.
- Average CTR: Average click-through rate is the click count divided by the impression count. Use it to gauge how well your title tags and meta descriptions tags drive searches on Google to your site. A significant discrepancy indicates the opportunity to optimize for click-through.
- Avg. Position: This is average ranking of your website’s URLs for the Google search queries. I track all of the above metrics on a monthly basis to better understand the direction each store I manage is headed, traffic and engagement-wise.
2c. Email Engagement metrics
These are the top six engagement KPIs that your email marketing team should report to you on a monthly basis.
- Email list growth rate: This is the rate at which your email list is growing. It is calculated by your total number of new subscribers minus unsubscribers, divided by the total number of email address on your list.
- Email bounce rate: This is the percentage of undelivered emails from your total emails sent that could not be successfully delivered to the recipient’s inbox.
- Open rate: This is the percentage of email recipients who open a given email. It is worth noting that while open rate is an important metric, you should also focus on optimizing click-through rates.
- Email clickthrough rate: This is the percentage of email recipients who clicked on links in emails. It is calculated by: (Total clicks OR unique clicks ÷ Number of delivered emails) * 100
- For example: 1,500 total clicks ÷ 75,000 delivered emails * 100 = 2% clickthrough rate
- Email Conversion Rate: This is the portion of email recipients that completed a purchase after clicking through links in your email campaigns. It is calculated by: (Number of sales from emails ÷ Number of total emails delivered) * 100
- For example: 800 sales ÷ 75,000 total email delivered * 100 = 1% conversion rate
- Unsubscribes: Checking your monthly unsubscribe rate is helpful for calculating your overall list growth rate. You should also track unengaged subscribers alongside Unsubscribes and consider removing them from your list.
2d. Social Media Engagement metrics
These are the top social media engagement KPIs you should track on a regular basis:
- Likes per post: “Likes” is a catch-all metric I am using for people that have upvoted your social media posts. These will come in the form of Likes, thumbs ups, favorites or +1’s. To calculate it, you will need to collate likes on each social media platform and divide it by the number of posts on the individual platform.
- Shares per post: “Shares” is a catch-all metric for “shares,” “retweets” and “repins.” This metric is indicative of the average number of times posts are shared over a given amount of time.
- Comments per post: “Comments” is a catch-all metric for mentions and comments to your social media posts. This metric is a gauge of how much of a community your brand is garnering on social media.
- Clicks per post: The clicks per post metric measures link click-throughs from social media posts over a given period of time. To calculate this metric, collate the number of clicks from your social media posts over a specific period (typically over a month) and then divide it by the number of published social media posts over the same time period.
3: Ecommerce Metrics at the Conversion Stage
Tracking sales and revenue on a regular basis (daily/weekly/monthly) is standard procedure for any business, and ecommerce is no exception. Online retailers can take this to the next level by diving into rich user data that lets ecommerce businesses track more advanced KPIs at a behavioral level. Transactions are expected to be made by the highest engaging customers and visitors to your site.
At the revenue generation segment of your sales funnel, you need to track and analyze actions that typically lead to a sale (micro-conversions) as well as establish standard metrics to expect across the board in relation to transactions.
Understanding the following metrics and KPIs will help you make better sense of your sales and revenue data — and help you spot trends to convert more visitors into buyers.
Micro conversions are pre-determined steps that typically occur before a sale. Here are two of the most popular types of micro-conversions:
- Email collection: Via on-site subscription boxes or behavioral triggered pop ups
- Ordering samples: This is particularly common with voluminous products such as furniture (fabric samples) or flooring (material samples).
In Google Analytics and other web data platforms, you can set conversion goals to measure both micro and macro conversions.
3b. Micro to macro conversion ratio
Ecommerce teams should track the relationship between micro conversions to macro conversions (sales/revenue).
Using an online furniture retailer that sells sofas as an example, let’s say they are able to, on average, convert 40 out of every 100 shoppers that request a fabric sample for sofas they sell.
They will be able to target their efforts into either increasing overall fabric sample requests or improving the sample-to-order ratio. The latter could be accomplished by testing and optimizing email communications to visitors who have requested a sample.
3c. Number of Transactions
Tracking the actual number of transactions, not just total revenue, is important for calculating AOV (3d, below) and understanding how customers interact with your online store.
3d. Average order value (AOV)
This is total sales divided by the number of transactions.
If you have a wide category of products it might be worth going deeper on this metric by better understanding the average order value in each category.
Monitoring this on a monthly basis will help you understand and even influence trends.
3e. More specific sales data
Since the total amount of revenue generated is very obvious, you need to go deeper on sales data by digging into:
- Sales totals generated by channel, e.g. search, social media channels, email, direct, referrals, TV
- Sales totals for each category in your product catalog
- Sales generated by each promo code
3f. Number of Visits to Sale
You will want to set a quarterly or biannual benchmark on how many visits it takes on average for new customers to make their first purchase.
3g. Sales Conversion Rates
This is the total number of sales divided by the total number of sessions to your store.
Understanding this number is critical to determining how much traffic is required to generating your target sales.
That said, just like your sales data, you need to more granularly understand conversion rates.
Here are key ways to dissect your conversion rate metric:
- Set conversion rate by channel: e.g. AdWords, SEO, Facebook, etc
- Set conversion rate by category of products: Some categories may have higher conversions that others
- Set conversion rate by campaign: As an example, if you are working with affiliates or influencers
3h. Micro Conversions Conversion Rates
Micro conversions, the steps that typically occur before a sale, are critical in the buying funnel for many businesses.
Calculate conversion rates for micro conversions by dividing the total number of the specific micro conversion (their goal completions in Google Analytics) by sessions and multiplying the value by 100. This way, you know what kind of micro conversions to expect with a varying volumes of traffic. It is also a leading indicator of cart abandonment on your site, which is a low hanging fruit for many online retailers.
Shopping Cart Abandonment
When your conversion rate is low, you need to understand how many visitors had an inclination to buy. To do this, you’ll want to examine your store’s cart abandonment.
This metric indicates the percentage of visitors who added products to their shopping cart but did not complete the checkout process. The lower your cart abandonment rate, the better. As a quick example, your shopping cart abandonment is 75% if 75 out of 100 visitors with a cart leave without buying.
Cart abandonment is the closest you come to earning real customers before they leave your site. Adding to the cart typically indicates an intent to purchase. The fact that they leave without buying means you lost potential customers. It gets especially bad if you paid a lot of money to get these visitors to your store. Making sure your cart abandonment is low is key to improving your conversion rate.
Use BigCommerce’s Abandon Cart Calculator to see how much revenue you could be earning back.
3i. Customer Acquisition Cost (CAC)
CAC is a critical marketing and business metric, informing your bottom line and helping to measure the effectiveness of your paid media efforts.
Studying CAC by channel helps you understand what channels and campaigns to invest more budget and time into, and determine the poorest performing channels that should be scaled back or discontinued.
Startup ecommerce businesses need a monthly CAC dashboard as a matter of survival, and to wisely spend limited marketing budgets.
You should measure CAC two ways:
- Direct sales conversions from a channel i.e. based on a last (click) interaction
- Assisted conversions based on a chain of multiple visits that eventually led to sale
I will also total up both to quantify the value of a specific channel.
I look at the CAC numbers and make hard decisions to either stop marketing or optimize campaigns on channels that are deemed unaffordable due to their high CAC.
4. Ecommerce KPIs and Metrics at the Retention Stage
Repeat business is a critical pillar to growing and scaling an online retail business.
According to Bain & Company, a 5% increase in customer retention rate will result in a 25% to 95% increase in profits.
Measuring customer retention should form the starting point to understanding and improving customer loyalty.
Here are the key loyalty metrics that you can use as primary KPIs to evaluate how your business retains customers:
- Repeat purchases rate: This metric shows the portion of repeat customers from your overall customer base. It is a primary retention marketing metric and is calculated by dividing the total number of customers that have purchased more than once by total number of customers.
- Purchase frequency: This is the proportion of customers that have shopped more than once over a specified period of time. While the repeat purchase rate looks at repeat purchases over a lifetime, it is important to base the purchase frequency metric over a period of time, which will be typically 12 months.
- Order gap analysis: This metric shows the average time lapse between two purchases from a single customer. It helps inform email marketing automation efforts so that you automatically remind customers to repurchase. Time between purchases will vary across retail verticals. It is calculated by dividing 365 by your purchase frequency metric. The output would be an average number of days between purchases.
Average Customer Lifetime Value
Customer Lifetime Value is cornerstone metric in retention marketing. It is simply the average total amount spent by each customer over their lifetime.
It is so important because it determines how much you can potentially spend to acquire new customers.
As a rule of the thumb:
Average Customer Lifetime Value > Average Customer Acquisition Cost
There are three key performance indicators required to arrive at the average customer lifetime value metric:
- Average order value
- Purchase frequency
- Time period (this is variable and dependent on your business)
What question most ecommerce marketers ask is “How long will customers shop with us?” On average, you might be looking at three years, but it will be best to assess this on a case by case basis.
If your LTV is low, it could be that many of your customers buy once and never return. This is measured by what is referred to as “churn.”
Churn is the percentage of your customers who do not come back to your site. The lower the churn, the better. For example, a churn rate of 80% means 80 out of 100 customers do not come back to buy from your store.
As we have seen, to ensure a high profit, it’s important to influence your customers to keep coming back to purchase. That means you want your churn to be low so that once you acquire a customer, they continue to come back and purchase again and again. Lower churn means higher LTV and a healthier business overall.
Use RJMetrics’ easy to use calculator to determine your customer lifetime value.
5: Ecommerce Metrics at the Advocacy Stage
Having existing customers recommend your ecommerce brand to their family and friends can be a low cost, yet highly effective means of acquiring new customers.
Uber managed to use referral marketing to great success because they have been able to deliver a delightful and superior customer experience alongside a referral program that makes it effortless for their customers to refer new customers.
The fundamental reason existing customers will want to recommend your brand comes down to customer experience.
A delightful customer experience will more likely lead to recommendations. This is why it is vital to measure customer experience alongside setting up a referral program. From a metrics perspective, pay close attention to the customer satisfaction.
Here are the two most vital customer experience metrics.
5a. Net Promoter Score
Net Promoter Score (NPS) is a very simple survey that measures how likely a customer is to recommend your brand to a friend.
It is sent out to a representative sample of your customer-base and asks them how likely they will recommend your brand on a 1 – 10 scale (with 10 meaning highly likely to recommend).
- people who give a 9 or 10 score are called promoters;
- those who score 7 or 8 are neutral; and
- everyone else is a detractor.
Your goal is to make your average NPS across all customers as high as possible. It’s an ongoing measure of how well your customer referral program will perform.
5b. Track product and seller reviews
One other very important customer satisfaction gauge is seller reviews and in-store product reviews. These should be tracked and segmented monthly.
Alerts should be set for average and below average reviews with immediate follow up by your customer experience team.
Putting it All Together on a Single View Dashboard
Having all of the above metrics on a single spreadsheet that is not only updated on a monthly basis but is the subject of regularly run strategic team meetings is an effective means of running a data driven ecommerce business.
You will at a glimpse be able to view your entire marketing performance and know exactly what areas require more attention.
You can use this ecommerce metrics dashboard template to begin tracking all your activities right now. Now you know how to measure ecommerce success.
If you have any questions, concerns or think we left anything out, please let us know in the comments.
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