10 eCommerce Metrics You Should Know About

Browse. Add to cart. Purchase. Most of us are familiar with online shopping (perhaps overly so), but understanding how it works is another story.

The world of eCommerce is competitive. With millions of online stores offering better products, prices and deals, standing out can be tough. That’s where eCommerce success metrics come in — these measures are used to help you assess your business and, in turn, improve it.

This article shares the 10 most important eCommerce metrics to help you define your business objectives and accelerate growth.

10 key metrics for eCommerce to boost sales

Here are 10 top eCommerce metrics to help you set objectives and scale your online business.

1. Conversion rate
2. Gross profit margin
3. Customer Acquisition Cost (CAC)
4. Customer retention rate
5. Customer Lifetime Value (CLV)
6. Cart abandonment rate
7. Email click-through rate (CTR)
8. Average Order Value (AOV)
9. Return rate
10. Net Promoter Score (NPS)

1. Conversion rate

Your site’s conversion rate measures how many visitors take a desired action on a web page, such as your home page. For an eCommerce site, the desired action is usually making a purchase.

Why it matters

Your conversion rate tells you if your webpage encourages visitors to take action. Optimising it will help you shorten the lead-to-sale cycle. With fewer obstacles to checkout, you can expect more sales and a better return on investment (ROI).

2. Gross profit margin

Gross profit margin is your company’s bottom line. It reveals your income versus spending, expressed as a percentage. To calculate gross profit margin, divide profits by revenue and multiply the total by 100.

Why it matters

A company's gross profit margin is a good indicator of its health. Having a high margin means that your processes are cost-effective, allowing you to reinvest more in your company. Poor margins are detrimental to cash flow and growth for eCommerce businesses.

3. Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) measures how much it costs to attract a customer. It factors marketing, advertising and sales-related costs.

Why it matters

Tracking CAC has two main benefits — measuring the success of marketing efforts and keeping track of costs. A low CAC can mean sales and marketing teams are using resources efficiently. A high CAC may indicate you’re not turning a profit.

4. Customer retention rate

It speaks for itself — your customer retention rate measures how many customers you maintain over a defined period. It’s expressed as a percentage.

Why it matters

Tracking your retention rate is the first step in identifying any issues with your product. If your retention is low, it could indicate your customers are dissatisfied. Given it’s typically cheaper to retain customers than to acquire new ones, shifting your focus to retention can be an essential part of your eCommerce strategy.

5. Customer Lifetime Value (CLV)

Whether you call it Customer Lifetime Value (CLV), CLTV or LTV, it’s all the same —  this metric predicts how much profit you will make from each customer over their involvement with your business.

Why it matters

This predictive metric can help you understand your business’s ROI and retention success. It’s a snapshot of your long-term financial gains. eCommerce businesses with high CLV are more likely to have a good product-market fit and a loyal customer base.

6. Cart abandonment rate

In eCommerce, cart abandonment refers to visitors who place items in their cart but don’t make a purchase. Your cart abandonment rate is calculated by dividing the number of completed transactions by total shopping carts.

Why it matters

Your site’s cart abandonment rate reveals how effective and trustworthy your checkout process is. Sites with a high abandonment rate may have poor user experience or a broken sales funnel. 

7. Email click-through rate (CTR)

Your email click-through rate (CTR) is the percentage of subscribers who click an internal link in your newsletter. 

Why it matters

eCommerce and newsletters go together like chips and salsa — email marketing can be a major revenue generator for your site. A high CTR shows you that your subscribers are engaged and are more likely to follow through to make a purchase on your site.

8. Average Order Value (AOV)

Average Order Value (AOV) measures the average spent by customers per transaction. This number will differ substantially between businesses.

Why it matters

When you know how much your customers spend on your products, you gain insight into their behaviour, which will help you develop a strategy to increase that value. The higher your average order value, the more revenue you will ultimately make.

9. Return rate

Your return rate tracks how many customers return items within a defined period. It’s represented as a percentage.

Why it matters

eCommerce businesses should keep an eye on their return rate to gauge customer satisfaction and take measures to improve. Dissatisfied customers return products, and a high return rate can strongly indicate a problem on your site or with your product. 

10. Net Promoter Score (NPS)

Your Net Promoter Score (NPS) measures the likelihood of customers referring your business. Customers are categorised as detractors, passives or promoters, with NPS calculated as the difference between detractor and promoter percentages.

Why it matters

NPS measures how satisfied your customers are by asking how many of them would recommend your products or services to others. You can also improve customer retention by understanding your NPS.

Goal setting with eCommerce key metrics

Now that you’re on top of the top eCommerce metrics, it’s time to get on top of how to implement your findings to get you to the top (phew!). How? With the help of Objectives and Key Results (OKRs).

OKRs is a goal-setting methodology that is proven effective in helping businesses — eCommerce or otherwise — meet objectives. We have a whole bank of resources dedicated to learning how to write your first OKRs.

And while using spreadsheets to write OKRs is possible, it’s like writing code in WordPad — slow and unproductive. The solution? Tability. 

Tability is an OKRs software and coach that helps you write your objectives and keeps you accountable. Want to give it a go? Try Tability for free today.