Choosing which eCommerce KPIs to track isn’t always easy. That’s because your choice will depend on your strategies and goals. Since strategies and goals differ from business to business, there’s no one-size-fits-all solution.
Tracking the correct numbers is crucial to measuring campaign performance and success. One can adjust in the middle of the campaign and base business decisions on data when you are tracking the correct KPI measures.
Fortunately, there are a number of metrics and KPI benchmarks that are especially useful to many ecommerce businesses.
Now let’s jump in, shall we?
What are eCommerce KPIs?
Ecommerce KPIs, also known as Key Performance Indicators, are important metrics that will help you understand where your eCommerce successes and failures come from. These benchmarks allow you to measure your performance across industries and your competitors.
Aside from that, KPIs often come from two or more metrics. Here is an example of a two correlating metrics:
- Site traffic
- Number of sales
Usually, the relationship between the two metrics is a well-known KPI- the conversion rate. So, in this case, how many site visitors wind up making a purchase? That’s the KPI you’re tracking.
Why are KPIs so important in eCommerce?
Tracking eCommerce KPIs is so important because it allows you to make informed decisions on your revenue, customer experience, marketing tactics, and other vital areas. They’ll help you determine which strategies work versus those that don’t.
Tracking eCommerce KPIs also lets you know where to focus your attention and gives you insights on how you can rectify these problems. Ultimately, this will allow you to determine what particular changes you need to grow your customer base and generate revenue.
Without eCommerce performance metrics, you essentially need to rely on your gut or personal opinion on how to make decisions. Problem is, your gut can easily be wrong.
However, depending on data to help you determine your choices is a better recipe for success. It’s also more likely to please principal stockholders, shareholders, and lenders.
Choosing Which Ecommerce KPIs to Measure
Firstly, you have to pick KPIs that are key to the success of your eCommerce store to boost your eCommerce conversions.
To do this, you should state clearly your business goals that have the highest priority. With this in mind, you can then work backward toward your desired goal.
Doing so allows you to figure out which particular eCommerce metric will be most relevant to you in achieving the goals and objectives you set.
9 Crucial eCommerce KPIs you Should Be Tracking
Now that we’ve walked you through the basics, we’ve compiled the best eCommerce KPIs that many top online retailers are watching closely.
These metrics often give insight that indicates the success of most eCommerce businesses. Still, it’s essential to keep in mind your business goals as you read through this. Doing so will allow you to find the best KPIs worth tracking for your specific situation.
Table of Contents
1. Shopping cart abandonment rate
According to data by the Baymard Institute, the average cart abandonment rate for most ecommerce businesses is 69.82%. Usually, this percentage is based on the number of completed purchases divided by shopping cart abandonments. Below, you’ll find the top reasons for card abandonment.
Therefore, if you aren’t making that percentage, you need to make the industry average your KPI. Monitoring this KPI is also vital since it allows you to understand the behavior of most online shoppers when they’re about to convert and why they did or didn’t.
For instance, did some of your leads not convert after reaching a certain point in the checkout process? Or are they making it through their purchasing decision quickly?
By monitoring, you get to answer these questions, which could eventually lead you to improve your KPI. Check out these handy strategies to increase your ecommerce sales.
2. Conversion rates
One of the first KPIs you want to track is your conversion rates. Although it usually varies depending on the industry, the average conversion rate when we talk about ecommerce is 2.17%.
To calculate your conversion rate, you need to divide the number of sales over the number of site visitors. Then, you can calculate your conversion rate when you divide the number of sales by the number of visitors you have to your site.
Here are several ways to quickly boost your ecommerce conversion rates:
- Provide free shipping
- Utilize an automated repricing platform
- Boost your seller rate
- Run promo offers
- Optimize your listings
3. Average order value (AOV)
How much income does your site usually generate with an order? Well, an average order value (AOV) will tell you how much a customer spends on every transaction on your site.
Usually, this is one of the simpler KPIs on this list. However, it would be best to track this as well, as it can tell you how much you’re spending on customer acquisition and help you understand various customer purchasing patterns.
4. Customer lifetime value (CLTV)
Usually, the average customer lifetime value or CLTV for eCommerce businesses will depend on the industry and the price at which products are sold.
You can find what your CLTV is on popular eCommerce platforms like Amazon or Shopify. If you have a hard time finding it, you can also calculate your average order value and multiply your average purchase number in that period.
As a small business, you can start by increasing your CLTV to 10%. You should also note that out-of-stock products, uncompetitive pricing, the lack of customer loyalty, and other vital factors all play a role in whether a customer will return to your eCommerce store.
5. Gross profit margin
Gross profit margin usually measures the actual profit made when subtracting operating costs, like marketing and overhead.
It will show your business’s profitability, which accounts for your revenue and other essential expenses.
6. Pageviews per session
The time that customers spend on your site is called a session. In an average session, you’re viewing several pages. But if a person views too many pages in a session to take the action they want, it might not be ideal for your business.
That may mean your site isn’t structured properly, and a poor user experience is making it hard for visitors to find what they’re looking for.
You don’t want your customers to feel that they’re in a maze before they can purchase an item. Therefore, if this KPI is high, you need to make the process less complicated.
7. Ad impressions
Ad impressions are also an important metric that you need to track. It’s the number of times your ad is fetched from its source and then displayed.
This can happen on a social media platform, search engine results page, or a third-party site. You find more about impressions with your ad platform of choice, whether on Facebook, Instagram, or Google.
You also need to know that clicks and impressions aren’t alike. Just because your ad is presented to someone doesn’t mean that they’re interacting with it. So why are they such a big deal?
Well, here are two main reasons:
- Arguably, impressions are the most controllable metric. If your impressions are dipping, then it’s a sign that you need to increase your bid or budget.
- Impressions control everything else. It doesn’t matter whether or not your ad is compelling. If you’re not generating impressions, then no one will see them.
8. Organic search rankings
The most successful online stores out there rank well on organic searches. Instead of using paid ads to do most of the work, an excellent marketing campaign that raises brand awareness will help you with organic search rankings.
Here are some tips:
- Monitor the page speed: Your site’s loading speed affects your rankings. Faster pages equal higher rankings.
- Do keyword research: Some keywords are oversaturated while others are under researched. So make sure that you find your sweet spot.
Over to You
So there you have it. KPIs are essential indicators that your business is performing well and can guide you with whatever decisions you’ll make, from ecommerce marketing to other technicalities in your site.
Knowing these metrics lets you know where your strengths and weaknesses come from, and you can adjust accordingly to improve your bottom line. Good luck!