Not all metrics are as valuable as others, and identifying the key performance indicators (KPIs) you need to track will help you improve your online store’s performance.
It’s easy to get lost in ecommerce metrics as an online retailer. If nothing else, the sheer number of potential metrics to track and measure can be overwhelming. But not all metrics are as valuable as others, and identifying the key performance indicators (KPIs) you need to track will help you improve your online store’s performance.
Reliable growth in online sales comes from analyzing performance over time in different parts of your business. Tracking the right metrics will help you improve conversion rates over time.
To help you elevate your site performance, we’ll cover the following:
Before we get into the top ecommerce metrics and KPIs, let’s cover what KPIs are and why you need to be tracking them.
Key performance indicators (KPIs) are the metrics most relevant and valuable to your business. There are common KPIs across all industries, but each business has unique KPIs to track and analyze on a regular basis to improve their product, service, or engagement with customers.
All KPIs are metrics; not all metrics are KPIs.
This is an important distinction. The most valuable metrics to businesses are KPIs, and should be monitored regularly and closely. Once you pinpoint which metrics are most relevant to your industry, add them to your list of KPIs to track regularly.
To make understanding and applying these KPIs easier, we’ve broken them down into 4 main categories (jump down to any one that applies to your business most!):
Note: One of the ways to track these metrics is via Google Analytics, which is the most commonly used analytical tool by online retailers. If you need to integrate your website with Google analytics, follow this link.
These metrics focus on: operating and improving an ecommerce store, online sales and payment, and increasing revenue.
Conversion rate is the number of customers that complete a sale after visiting your site and viewing a product. Conversion rate is closely tied to overall revenue metrics.
Why track it: It represents the actual sales based on customers viewing your products. This KPI can be compared to a number of other metrics designed to improve conversions. Compare it to page views, average order values, and traffic sources to draw more acute insights about your users’ behavior.
Gross margin is the actual profit you earn on top of the cost of goods sold (COGS). This is essentially your profit on the product after sale, factoring how much you spent on the inventory yourself.
Why track it: Knowing how much you earn on each sale is extremely important to ensure you are growing and scaling properly. This is a core metric to compare to other benchmarks to gain insight into how sustainable your growth is.
The average order value (AOV) is the monetary value of an average customer order on your site. You will also want to track the average abandoned order value (AAOV), which is the average value of an order that’s abandoned during either the checkout or cart stages of purchase.
Why track it: Track AOV as a whole, and then segment by device type, platforms, and traffic sources. Identifying the sources of your highest AOV customers will help you run more ROI-positive marketing campaigns.
The cost per acquisition is how much it costs to gain a new customer. This will include advertising costs, email campaigns, discounts offered, and anything else it took to actually make the sale to a customer.
Why track it: This gives you an idea of how much effort — and money — it takes to actually get a paying customer. It should be compared to a number of other metrics, including average order value, traffic volumes, customer lifetime values, and more to understand how much it costs to earn a customer.
The cart abandonment rate is the percent of customers that add an item to cart and then abandon the purchase. The number of items added to the cart, the value of items added to cart, and how long they shop are all important as well.
Why track it: This metric gives you insight into how many customers are interested in products but do not proceed to buy. By comparing this to other metrics on this list, you can develop strategies for reducing abandonment rate and get more customers through to sale.
The checkout abandonment rate is the percent of customers that initiate checkout and then abandon purchase. This is a step further than cart abandonment, which means you’ve expended more effort to get them to that stage. It’s important to capitalize at checkout, as customers are closest to making a purchase at this point.
Why track it: This gives you specific information about incomplete transactions after customers are poised to buy. You will want to analyze and develop strategies to decrease this rate over time, as it can have a major impact on your revenue.
More than that, many ecommerce retailers are missing out on up to 20% of revenue based on false positive fraud detection during checkout, causing perfectly secure payments to be turned away.
Customer Lifetime Value (CLV) is the amount of revenue on average that you earn per person throughout their entire lifetime as a customer for your company. It essentially breaks down how much a customer is worth to you on average, and makes a distinction between a customer who makes a $200 purchase now, and one who makes ten $100 purchases over the next five years – who is actually more valuable to you. You need this to be greater than acquisition costs for you to be earning revenue.
Why track it: This metric on its own gives you insight into how valuable each customer is to you. Compare this directly to customer acquisition cost, conversion rates, traffic, and more to get a picture of your ROI on marketing and customer acquisition campaigns.
Divide revenue by the cost of advertising to get a ratio of the average revenue returned based on advertising costs. This value is how much you earn on each advertising dollar spent.
Why track it: Allows you to measure how much advertising it costs on average to earn revenue based on current costs and income. You can use this to gain insight into how much advertising it costs to get customers to complete a purchase. You should always be aiming to increase the ROI per dollar spent on advertising, by experimenting with new or more efficient advertising methods.
These metrics focus on: how the customer uses and engages with your product, performance and speed of service, perfecting service across device types and platforms, and site traffic.
How customers access your store is important for giving them an ideal experience. Segment your ecommerce analytics by device type to gain further insight into which devices are being used more frequently, and tailor your site’s UX to each device type.
Why track it: Learn industry benchmarks for breakdown by device type, then build mobile-optimized experiences for each platform. Try to maintain consistency in your process across device types, but test performance on different devices – mobile, web, and tablet – to get an idea of how customers are purchasing and which is working most efficiently.
Website speeds and checkout load times are important for maintaining and engaging customers on your ecommerce site. The performance, efficiency, and speed of your ecommerce platform is core to your shoppers’ experience.
Why track it: Monitor speeds for all pages, paying special attention to pages related to shopping cart and checkout. Understand how each page and step performs. Fix acute issues with well-known solutions to decrease page loading times.
The level of engagement your customers have with your service, often measured using reactions, shares, and subscriptions. The more active and interested customers are, the more likely they are to purchase, share, and interact with your content.
Some examples of what you want to track include:
Why track it: Gauge how active and immersed in the product experience your users are, as this activity and interest can be translated into loyalty, advocacy, and revenue.
The bounce rate is the percentage of customers that abruptly leave your site after visiting only one page. This usually indicates significant UX issues, such as page load times, appearance, and navigation delays that cause users to seek another site. This can also be a sign of poor marketing targeting, since the customers brought in by your campaigns aren’t finding value in the site or products for sale.
Why track it: Use the bounce rate to motivate improvements in the stickiness of your website or app. Test and develop strategies to reduce the bounce rate, get more customers interested in your products, create customer loyalty, and lead them to purchase.
These metrics focus on: what support methods customers require, best practices for when to connect users to support, and capturing useful feedback about your platform.
Use customer surveys regularly to get consistent feedback. Run surveys to get feedback after site upgrades, major changes to the site, or whenever new features are introduced.
Why track it: The percent of customers willing to leave feedback is a good gauge for customer interest in your site and products. Feedback is often given with the hopes that the service will be improved, as customers can easily leave and find another ecommerce site. Listen to users and work that into your plans for site updates.
Reviews on a product page can mean the difference between a purchase and an abandoned cart. Featuring product reviews on your own site is the preferred option, since shoppers are more likely to trust the opinion of fellow customers than marketing text. However, third-party review sites will also work in a pinch.
Why track it: Tracking customer reviews is a great way to get an unfiltered and honest picture of how customers view your products. The ability to respond to reviews also gives you a way to connect with customers directly and resolve their issues. More than that, it creates a great opportunity to produce marketing content centered around your “best-reviewed” products.
Collect data on how many customer service communications are initiated. Look at this value as a whole and segment it by each unique channel of communication, including calls, chats, and emails.
Why track it: Tracking customer support analytics gives you information about how many customers are having problems. Pay attention to the channels they use most, making those more efficient and improving the other channels. Analyze the reasons for the complaints in detail so that you can utilize this feedback when making improvements.
Also known as a service-level agreement (SLA) time. Track both the average SLA, and the average time from ticket creation to resolution (open to close). Treat these times as sacred: the longer it takes for shopper problems to be solved, the less likely they are to become a repeat customer.
Why track it: Reducing the average response time means first-time shoppers will be more likely to make a repeat purchase. Customer support should be prioritized so that customers can access information when they need it and get back to buying. To take things a step further, provide a help center where users can find their own answers, customer support chat, and other interactive options if possible.
These metrics focus on: website traffic, methods of customer engagement, and brand exposure.
Why track it: Knowing where customers are coming from and how much revenue comes from each source can help you capitalize on your best channels. Double down on traffic sources that are proving extremely effective, and minimize efforts on your lowest traffic-generating sources.
Site traffic is a measure of activity on your website, and is measured in visitors (users) and times visiting the site (sessions). Site traffic can be studied as a whole, or further broken down into more specific metrics, like page views per visit, time on site, bounce rate, and new versus returning customers.
Why track it: Measure traffic spikes and averages, and use this data against your ecommerce sales metrics to draw meaningful insights about conversions, abandonment, and ROI.
Social media interaction, including reactions, shares, and subscriptions indicate the level of engagement your customers have with your site. They also provide a direct line of communication, allowing customers to give feedback on what they like and dislike about your product.
Why track it: Listen closely, make product improvements as customers request them, and use this exchange to develop a relationship with your customers that will foster loyalty and advocacy into the future. Tracking the success of social media campaigns in terms of exposure, reactions, shares, and subscriptions will help you develop better social media strategies and drive traction with your brand.
The number of valid emails you are able to capture is helpful to understand how many customers are interested in your service and willing to provide a method of communication. You can further break this down by device type and the stage in the process they give you their email (registration, checkout, etc.).
Why track it: Customer emails can be used to communicate in a variety of ways, including recovering abandoned carts, remarketing, and offering customer support. The information about when and how you gather them successfully will allow you to improve your collection rate as you get better at timing and framing your request.
If your ecommerce site has a blog attached, the view and share rate of the blog is a good signal of the usefulness of your content. While virality can have value, building a consistent, loyal readership is a better way to build sustainable growth and a reliable revenue stream.
Why track it: Analyze how different pieces of content and topics perform with your customers, giving them more of what they want. Review and repeat continuously to develop better content that connects more closely. As you provide valuable content, you’ll see engagement, conversions, and ROI increase.
You need to gather, store, and analyze your data effectively to get the most useful insights for your online business. It all starts with choosing the right KPIs to track.
Three things matter when it comes to ecommerce metrics:
This cycle will need to be repeated continuously to make adjustments and improve tracking efforts. Each time, fine-tune your process to gain more actionable information from the data you are collecting.
All of your analytics efforts should serve your main business objectives. The metrics that you choose to track should be directly related to your core business goals and bottom line, helping you achieve main objectives.
Your immediate goals will always need to take precedence, but short-term goals should build towards longer-term goals and objectives. More importantly, don’t dismiss long-term needs for short-term gains. Consider scalability and future needs to ensure you measure metrics that may matter in the future.
Access and organization of your analytics is essential to get the most value out of your data. All team members should be able to access analytics when they need it, with the ability to organize and manipulate data to draw insights using an accessible, navigable, and manageable ecommerce KPI dashboard.
Always consider how statistics will be displayed for your teams, ensuring that the data visualization method makes information accessible and actionable for various stakeholders. When planning the metrics to measure, you should have an idea of how this data will be displayed for it to be valuable to your business.
Analyze the current performance of your store against averages. Looking at a specific moment in time and your current performance is essential to know where you are now so you can poise and pivot to get you where you are aiming to be.
Identify trends in the data collected to develop strategies that will improve your ecommerce performance. Find ways to improve the site that will achieve the main objectives you’ve set for yourself. These can include marketing campaigns, social media engagement efforts, and reducing abandoned checkouts through secure fraud protection.
Improvements are often subject to the platform or channel, as they function differently and give customers different features. Segment data by channel and platform, and identify which channels and platforms are best for the strategy you are trying to deploy. Use a combination of social media engagement, email marketing, online advertising, and website content to provide users the right channel or platform to get the most traction.
Determine clear time parameters for employing your strategies. Test performance over this time, and compare it to your analytic averages. Measuring over specific periods of time is essential for tracking how email or marketing campaigns are performing, as well as the impact service updates and upgrades have on your site.
Key performance indicators give you meaningful user behavior insights that allow you to improve on your store and enhance your ecommerce experience. Choosing KPIs will vary depending on your business, industry, niche, and much more, so there is no one-size-fits-all answer.
For general KPI guidelines, we recommend the SMART approach:
Identify the metric precisely so you know what you are tracking – don’t use general terms like ‘traffic.’ More than that, be aware of the reason you are tracking this metric, and how you plan on using it; this will help ensure you target metrics in a meaningful way.
To analyze and improve your site from data, you’ll need to use metrics that are measurable. Be sure that you can track the metric accurately, collect the data and store it securely, and display data in a structured way to draw insights that you can use to improve your ecommerce website.
Choose metrics that will allow you to make adjustments, pivot, and improve your site. For an insight to be actionable, it must give data that allows you to evaluate your ecommerce stores performance and identify areas that can be changed for the better. Ensure that the KPIs you select are metrics you can use and apply to your business in a meaningful way.
The data you collect needs to be closely related to your goals, business, and industry for them to be valuable to you, and allow you to make the necessary improvements. Track a variety of metrics and prioritize those that are most associated with your objectives.
Analytics need to be assessed over time so trends and patterns can be identified, but actions need to be carried out quickly to capitalize on opportunities. Make the right adjustments at the right time; scale and be proactive so you have your next steps ready (without jumping the gun).
Some metrics may not pay off right away or seem actionable, but if a metric meets four or five of these characteristics, it will likely be valuable to you at some point.
Once you know how to identify the most meaningful metrics to your business, we can use this criteria to create a list of KPIs to track. Make sure the metrics you choose meet these standards and will be useful for you after you make the effort to track them.
Use internal and external benchmarks to determine how you are performing compared to your past performance and industry standards. Internal benchmarks are company metrics that you are comparing your analytics to. External benchmarks include industry and ecommerce analytics outside your company performance that serve as guidelines for your own performance.
The analytics you collect are not just useful when compared to your own metrics. You’ll want to compare your performance to how competitors in your industry and ecommerce shops in general are performing. These benchmarks help you determine how you are performing compared to others and isolate areas to improve.
Many of these metrics are the same as the metrics you would measure for your own business. Looking at these metrics with industry and ecommerce data is an ideal way of measuring your performance and gauging it when you have few standards to compare to.
Make the most of your ecommerce platform by applying the analytics you gather to your checkout process. Decreasing your checkout abandonment rate can help you capture potentially lost sales and revenue, gaining profit that would otherwise be turned away for false positive fraud indications.
As a checkout solution that overlays on your current platform, Bolt works seamlessly with the ecommerce platform you have in place. With a 100% fraud protection guarantee, you can let Bolt worry about fraud and focus on what you do best, developing great products.