Top eCommerce Metrics And KPIs You Need To Track

It's natural to look for reasons why something is going badly. But have you ever tried to analyse why everything is going well? Either way, it's crucial for eCommerce owners and managers to keep track of a carefully selected set of metrics to ensure your eCommerce business is growing and moving in the right direction. Just think - if your eCommerce business generates $100 million in revenue per year and you were to use the data collected from those metrics to optimise the conversion rate and increase it by even 1%, that could mean $1 million in extra revenue. Here's the top eCommerce metrics and key performance indicators (KPIs) to track.

This article is full of lists. You might be familiar with some or most of the terms mentioned already, or they may be new to you. As we follow this ecommerce path on the Frontkom blog there will be deep dives into each of the areas mentioned below. So check back or sign up to receive notifications, and we’ll teach you everything we know about ecommerce KPIs.

Before We Dive In - How To Choose The Right eCommerce KPIs To Track?

We notice that many eCommerce business owners and managers don't think measuring different metrics is important and doesn't bring them much in the way of results. The most common reason for that is measuring the wrong metrics. 

So how to choose the key metrics and KPIs to track? You should start by looking at your online business and think about which aspects are crucial for your eCommerce's long term success and growth. Are you more focused on repeat customers or do you need a steady stream of new customers? Should the customers be purchasing one big-ticket item or are you trying to sell multiple products to each one? Are your products something people buy often or more as a one-off purchase? Depending on the nature of your eCommerce store and the specific products or services you offer, the set of metrics should be different. It’s also important to track performance across the entire customer journey, because you need to be aware of the experience customers have with your business at various stages of their decision-making process, not only at the purchase stage.

Types Of Key Performance Indicators

As with any other business, eCommerce businesses have different moving parts that come together behind the scenes. Your KPIs should reflect that. You can divide the metrics into 5 types and choose a set of KPIs for each area:

Sales

These metrics measure how your eCommerce business is doing in regards to revenue and conversion rate as well as overall sales performance. These metrics are crucial when it comes to making informed business decisions and are the foundation of conversion rate optimization. Here is an unordered list of the top sales eCommerce metrics:

• Average Order Size
• Gross Profit
• Average Margin
• Average Order Value (AOV)
• Number Of Transactions
• Conversion Rate
• Shopping Cart Abandonment Rate
• New Customer Orders vs. Returning Customer Orders
• Cost Of Goods Sold (COGS)
• Product Affinity
• Inventory Levels
• Customer Lifetime Value (CLV)
• Revenue Per Visitor (RPV)
• Churn Rate
• Customer Acquisition Cost (CAC)
• Customer Lifetime Value (CLV)
  

Read more about which sales KPIs  will set you on the path to success here.

Marketing

Marketing key performance indicators impact your sales KPIs, so it's important to track both. Marketing KPIs will help you understand and evaluate the performance of your marketing campaigns and determine whether your ad spend brings you actual ROI. These metrics are crucial when it comes to managing your marketing budget. Here's some of the most important eCommerce metrics and KPIs you should consider including in your metrics set:

• Website Traffic
• New Visitors vs. Returning Visitors
• Time Spent On Site
• Bounce Rate
• Page Views Per Visit
• Average Session Duration
• Traffic Sources
• Mobile Site Traffic
• Peak Traffic Times
• Newsletter Subscribers
• SMS Subscribers
• Subscriber Growth Rate
• Email Open Rate
• Email Click-Through Rate (CTR)
• Unsubscribes
• Chat Sessions Initiated
• Social Followers
• Social Media Engagement
• Clicks
• Average CTR
• Average Position In SERP
• Pay-Per-Click (PPC)
• Number & Quality Of Reviews

Project Management

As with any other business, it's essential to track your internal team's performance, because it has a direct impact on your eCommerce site. This will help you better evaluate your team and set better goals and objectives for them in the future. Here are example metrics to look at:

• Hours Worked
• Budget
• Return On Investment (ROI)
• Cost Variance
• Cost Performance Index (CPI)

Customer Service

For many eCommerce business owners or managers, it's often hard to set tangible KPIs for their customer service or customer support team. However, customer service KPIs are just as important as other eCommerce KPIs. You need to keep track of customer satisfaction and their overall experience to increase customer retention and build customer loyalty over time. Take a look at some metrics we think are worth tracking:

• Customer Satisfaction (CSAT) Score
• Net Promoter Score (NPS)
• Customer Service Email Count (or Chat/Phone Call Count)
• First Response Time
• Average Resolution Time
• Active Issues
• Service Escalation Rate

Manufacturing (if it applies to your business)

Depending on your business model this may or may not apply to you. However, even if you're not directly manufacturing products, you still might have a supply chain or certain processes that should be measured and tracked to improve their efficiency. Here's some commonly measured eCommerce KPIs for manufacturing:

• Cycle Time
• Overall Equipment Effectiveness (OEE)
• Overall Labour Effectiveness (OLE)
• Yield
• First Time Yield (FTY) & First Time Through (FTT)

Using KPIs To Motivate & Engage Your Team

It's important to note that KPIs are also useful tools for employees in an eCommerce business. Sure, it is crucial to know your eCommerce conversion rate, return on ad spend, customer retention rate etc. But you need to think about all those important eCommerce KPIs as tools you can use to motivate your team and ensure everyone is always on the same page when it comes to the direction you're taking with the eCommerce business. Choose KPIs that can help you control the entire customer journey, not just the metrics readily available within your software. To learn more about setting goals and using them properly, read our article about S.M.A.R.T. goals.

If you're looking for expert eCommerce developers who can help you optimise your online store and create a magical customer experience - contact us and let's talk about your project!