Key takeaways:
- Key performance indicators are the best way to measure growth and success for your online store.
- Customer lifetime value, customer satisfaction, and repeat customers are crucial for long-term profits and customer loyalty.
- Use tools like Jimdo, GA4, and BI dashboards to track your KPIs and make smarter decisions.
Running an online store may seem easy to the inexperienced eye, but in reality, it consists of tracking a whole set of metrics. However, not all of them are of the same value. Some show you actionable insights, while others are just noise.
Metrics that provide actionable insights are known as key performance indicators (KPIs). They show you where you need to place your focus the most and how certain changes impact user behavior and sales.
Let’s break down the best KPIs to track and how they help you understand customer behavior, improve customer loyalty, and boost total revenue.
What are ecommerce KPIs?
Ecommerce key performance indicators are specific numbers that show how well your online store is doing. They allow you to distinguish which parts of your operation are doing well and which ones are lacking. Then, you can make data-driven decisions to bring the numbers up.
Metrics are all kinds of numbers you can track, but key performance indicators are the ones that directly tie to your goals. In short, every KPI is a metric, but not every metric is a KPI.
If you’re looking at how much the average customer spends, that’s a metric. But if you’re trying to increase profits, it becomes a KPI because it directly ties to your goal of getting more sales.
Sales KPIs
To grow your online store, you need to sell. It’s as simple as that. And these eCommerce KPIs help you track and optimize your sales engine.
Conversion rate
Conversion rate (CR) shows the percentage of website visitors who make a purchase. It’s one of the top KPIs to track. If it’s low, something on your site might be confusing people or turning them away. Could be a messy interface, complex checkout process, pricing, or other issues.
Average order value
Average order value (AOV) tells you how much each customer spends on one order. If you want to boost it, you can try bundling products or offering free shipping over a certain price.
Sales growth rate
Track how your sales increase month-over-month (MoM) or year-over-year (YoY). It shows if your store is growing steadily.
Cart abandonment rate
A high number here means people add items to their cart but don’t finish the purchase. That’s a red flag for checkout problems or unexpected costs.
It could also mean that the customer got distracted or forgot to complete the transaction and a simple automated reminder could solve this problem.
Revenue per visitor
Revenue per visitor shows how much money you earn for every person who visits your site. It mixes traffic and conversion into one number. You can use this number to experiment with traffic origin.
Marketing KPIs
You can have the best product, but without solid marketing efforts, no one will know about it. These ecommerce metrics measure how well you’re attracting and converting new customers.
Customer acquisition costs (CAC)
It shows how much you spend to get one new shopper. If this number is higher than you’d like to see, you need to focus on optimizing your campaigns and budgets.
Return on ad spend (ROAS)
ROAS compares how much you make vs how much you spend on ads. The higher this number, the better your paid marketing campaigns are.
Email open and click-through rates
Open rates show you how many people open your emails, and click-through rates show how many click the CTAs or other links in your email. Track those to see how well your email marketing is doing.
Organic traffic and SEO rankings
These tell you how well your site is performing in Google search without ads. If you’re investing in SEO to appear high on Google, you can reduce marketing spend on ads by getting more organic traffic from SEO.
Paid traffic performance
Keep an eye on your CPC (cost-per-click), CPM (cost per 1,000 views), and CTR (click-through rate). They reveal if your paid ads are pulling in the right website visitors who have the intent to buy your products.
Customer KPIs
This is where you focus on customer satisfaction and long-term value. People who love your brand come back again and again. These KPIs help measure that.
Customer lifetime value (CLV / LTV)
Customer lifetime value estimates much money one person will likely spend with you over time. You want this number to go up, it means more value from each buyer.
Repeat purchase rate
It tracks how many of your repeat customers come back for another order. A higher rate equals better customer loyalty.
Churn rate
Churn shows how many new customers leave and never return. If this rate is high, something’s broken in your customer journey and you need to identify what it is.
Net promoter score (NPS)
Ask your clients one simple question: “Would you recommend us?” That gives you a score, which could be between -100 and 100. A higher NPS means better customer satisfaction.
Customer satisfaction (CSAT)
Unlike NPS, which focuses on the general view of the company, this focuses on a specific experience, like delivery, product, service, etc. Keep your CSAT high to keep customer loyalty strong and promote repeat purchases.
Operational and logistics KPIs
Your backend matters just as much as your front-end. These ecommerce metrics look at what happens behind the scenes and how well the logistics perform once someone orders their product.
Order fulfillment time
It shows how fast you ship the product out once someone buys the product. Faster is usually better, unless you notice that speed often causes other problems like incomplete orders, packaging issues, and so on.
Inventory turnover ratio
This one shows how often your products sell out and restock. High turnover means good sales, too high might mean you’re always out of stock.
Return rate
If people are returning your products often, you might need to fix your product pages, sizing guides, or even the product itself.
On-time delivery rate
It tells you how often you meet your delivery promises. If you’re always late, it might be better to adjust your delivery times on the product pages.
Shipping cost per order
This KPI shows how much it costs you to ship each order. It affects profit, especially for stores who offer free shipping. If you notice it’s too heavy on your profit margin, you may want to change your shipping policy.
Financial KPIs
These ecommerce KPIs are all about the financial side of things. Not just how much you make, but how much you keep.
Gross profit margin
It shows you how much profit is left after paying all the product costs. Once you have it, you can check how healthy your pricing strategy is.
Operating margin
This one goes a bit deeper than the gross profit margin. It includes your whole business operation: ads, rent, salaries, and shows what’s left after all operational expenses.
Cost of goods sold (COGS)
It shows how much it costs to make or buy what you sell. You should aim to keep this one as low as possible without hurting quality to improve profit margins.
Break-even point
This one shows how much you need to sell before you make a profit. If you haven’t hit this point yet, you’re still in the loss zone.
How to choose the right ecommerce KPIs for your business
Not all KPIs matter to every store. Choosing the right one depends on where you are and what you want to achieve.
If you’re a startup, you probably need to focus on new customer acquisition and related metrics. That means keeping an eye out for conversion rates, customer acquisition cost, and customer satisfaction.
If you’re already growing, you may want to switch gears. Start tracking customer lifetime value, average order value, and repeat customers. These can help increase total revenue without increasing marketing spend.
Also, B2B and B2C stores care about different things. If you’re B2B, you should focus more on long-term goals. If you’re B2C, you can focus on emotion-driven sales.
Tools to track ecommerce KPIs
Data is only as good as you can track and use it. Here are some tools that can help you watch your ecommerce metrics and act on them:
- Jimdo analytics. Leverage built-in integrations for tracking website traffic, bookings, and marketing data.
- GA4 (Google Analytics 4). Set up basic or complex customer behavior tracking dashboards across different channels.
- CRM and marketing automation dashboards. Connect marketing efforts to results and see how many new customers you are bringing in.
- BI tools. Visualize big data to spot trends in your customer lifetime value and beyond.
There are many tools to choose from and they all excel at different aspects. Define your needs and then you’ll be able to find the one that fits you best.
Frequently asked questions
How often should you check ecommerce metrics?
You can check daily for high-impact metrics like sales and ad spend, and weekly or monthly for trends like customer lifetime value, churn, and more.
How many KPIs should an ecommerce business track?
It varies, but you shouldn’t overdo it. Too much data is not going to help you if you can’t interpret its value properly. Focus on key performance indicators that align with your goals.
What’s the difference between ecommerce KPIs and OKRs?
OKRs are goals with key results that give direction. KPIs are just numbers that show progress.
What are the most commonly measured ecommerce KPIs for sales?
It varies by business, but some of the top ones could be conversion rate, average order value, and total revenue.