“Most businesses are data rich, but information poor.” – Avinash Kaushik, Digital Marketing Evangelist at Google & Author of Web Analytics 2.0.
Data is knowledge and knowledge is power. There are numerous Ecommerce KPIs (Key Performance Indicators) that can help you measure your business operations with ease.
You can learn about your customers, improvise and offer them greater value than before. Remember, the right data helps you take the right decisions at the right time so that your online business can scale in the right direction!
- What is an Ecommerce KPI?
- An Overview of Ecommerce KPIs [INFOGRAPHICS]
- Ecommerce KPIs Attributes
- List of 45+ Ecommerce KPIs
- Measuring your Ecommerce Success
- Final Words
What is an Ecommerce KPI?
KPIs are measurable values that can confirm how effectively your business milestones are progressing. It demonstrates your organization’s performance which conveys how well an individual or a team is performing to accomplish the business goals.
Ecommerce metrics help you see where you stand at the moment. They help you recognize the course you must take in order to accomplish your targets. Entrepreneurs can monitor a number of ecommerce KPIs to analyze the progress of their strategies and tactics, whether it be sales, marketing, or customer service.
An Overview of Ecommerce KPIs [INFOGRAPHICS]
Ecommerce KPIs Attributes
Online businesses tend to utilize a number of tools to keep track of different ecommerce KPIs. Google analytics amongst all, dominates the market. However, as Albert Einstein once said, “Not everything that can be counted counts, and not everything that counts can be counted.”
So how to be sure whether you’re tracking your ecommerce KPIs appropriately? Here’s a start. KPIs that provide helpful bits of knowledge about an organization’s performance have the following four attributes:
- They must create an impact.
- You can measure them accurately.
- They must be in real-time.
- They must be actionable so that you can make improvements.
There are various examples of ecommerce KPIs that entrepreneurs measure to scale their businesses. However, you must ensure that these ecommerce key performance indicators are not only qualitative and quantitative, but they should also be able to predict the future or reveal the past of your business.
We have divided the Ecommerce KPIs into the following major categories:
- Customer service
- Store Performance Management
List of Ecommerce KPIs 2019
Here’s a list of the most popular ecommerce KPIs examples that can help you scale your online business with minimum effort.
Ecommerce KPIs to Measure Sales
The most commonly measured ecommerce KPIs for sales are:
1. Average Order Value (AOV)
Also known as the Average Market Basket, the AOV lets you know how much your customers typically spend on one single order.
AOV = Total Revenue / Number of orders.
2. Gross Profit
It is an important ecommerce KPI and helps entrepreneurs to plan ahead.
Gross Profit = Total Cost of Goods Sold – Total Number of sales.
3. Conversion Rate (CR)
CR is the percentage that identifies at what rate people are purchasing your products.
Conversion Rate = (Total Number of Visitors on the Website / Total Number of Conversions) x 100
4. Shopping Cart Abandonment Rate (CAR)
This ecommerce KPI tells you how many visitors are adding products to the shopping cart but are not checking out or purchasing them. Reduce friction in the checkout process to improve this number.
CAR = (Total Number of Completed Transactions / Total Number of Shopping Carts) x 100
5. Shopping Cart Conversion Rate (CCR)
This ecommerce KPI measures how many visitors actually complete the checkout process by purchasing the products.
CCR = (Total Conversions / Total Number of Visitors) x 100
6. Cost of Goods Sold (COGS)
It’s the amount you’re spending to sell your product. For example, manufacturing costs, employee wages, overhead costs, etc.
COGS = Beginning Inventory Costs (of the year) + Additional Inventory Costs (purchased during the year) – Ending Inventory (at the end of the year)
7. Customer Lifetime Value (CLV)
It tells you the worth of each customer to your business. Strengthen relationships by focusing on customer loyalty to improve this number. It will help you understand your cost per acquisition.
CLV = (Customer’s Annual Profit Contribution x Average Number of Year as Customer) – the Initial Cost of Customer Acquisition
8. Churn Rate
For an online business, the churn rate lets you know at what pace your customers are leaving your brand or canceling subscriptions.
Formula: Begin by subtracting the total number of customers remaining at the end of the month from the number of customers at the beginning of that month and divide by the total number of customers at the beginning of the month. Multiply by 100 for its percentage and further, multiply it by twelve to get the annual churn rate.
9. Customer Acquisition Cost (CAC)
This ecommerce KPI tells you how much you’re spending to acquire a new customer. You can measure it by analyzing your marketing spend and how it breaks down per customer.
CAC = Costs Spent on Acquiring Customers / Number of Customers Acquired
10. Repeat Purchase Rate (RPR)
It tells you the number of customers that return to your website in order to make another purchase. It can help you measure customer loyalty as well as you can plan your sales strategies.
RPR = Purchases from Repeat Customers / Total Purchase
11. Average Profit Margin
It is the percentage which represents your profit margin over a specific period of time.
Average Profit Margin = Gross Profit / Revenue
12. Revenue Per Click (RPC)
It’s simply the average revenue for each click on all of your pay-per-click campaigns. It allocates a value to every paid click.
RPC = Revenue / Total Number of Clicks
13. Purchase Frequency
It measures the average number of orders your customers made during a specific period of time. A great KPI to measure customer loyalty and to highlight under performing products or categories.
Purchase Frequency = Total Number of Orders / Total Number of Unique Customers
15. Time Between Purchases
It shows how long a customer goes before making a purchasing from you again. It is a good ecommerce KPI to know as it allows you to tailor your campaigns as per their behaviors.
Time between Purchases = Purchase Frequency / 365
Ecommerce KPIs to Measure Marketing
The most commonly measured ecommerce KPIs for marketing are:
16. Website Traffic
Your website traffic refers to the total number of people who visit your ecommerce website.
17. Average Session on the Website
It is the average amount of time a visitor spends on your website during his single visit.
Avg. Sessions = Total Session Duration / Total Number of Session
18. Pageviews per Session
It refers to the average number of website pages a visitor views during each visit. If it takes too many clicks for your visitors to find the right product, then you must revamp your design.
Pageviews per Session = Total Number of Pageviews / Total Number of Visitors
19. Bounce Rate
This ecommerce KPI tells you how many visitors leave your website after viewing only one page. Keep this number as low as possible.
Bounce Rate = Total Number of One-page Visits / Total Number of Entries to a Website
20. Email List Growth Rate
Another important ecommerce KPI which requires your keen attention. You need to calculate the growth rate of your email list.
Email List Growth Rate = [(Total Number of New Subscribers – Total Number of Unsubscribes) / Total Subscribers ] x 100
21. Email Bounce Rate
It is the percentage of emails sent that were not successfully delivered to the recipient’s inbox.
Email Bounce Rate = (Total Number of Emails that Bounced / Total Number of Emails Sent) x 100
22. Email Open Rate
It is the percentage of email recipients who open your email.
Email Open Rate = (Total Number of Unique Open / Number of Total Emails Sent Successfully) x 100
23. Email Click-Through Rate (CTR)
It is the percentage of email recipients who clicked on the links you provided in your email.
CTR = (Total Number of Individuals Clicks / Total Number of Email Opens) x 100
24. Email Conversion Rate
It refers to the email recipients who completed a purchase by clicking through the links provided in your email campaigns.
Email Conversion Rate = (Total Number of Conversions from Emails / Total Number of Emails Sent) x 100
25. Average CTR
It is the total click count divided by the total impression amount. It determines how well your title tags or meta descriptions drive traffic to your website.
Average CTR = Total Number of Clicks That an Ad Receives / Total Number of Impressions
26. Social Media Engagement
It tells you how actively your fans or followers are interacting with your brand on social media. You can measure it by the number of likes, comments, and followers.
27. Subscriber Growth Rate
It tells you how fast your subscriber list is growing.
Subscriber Growth Rate = [(Current Subscribers – Past Subscribers) / Past Subscribers ] x 100
28. Pay-Per-Click (PPC)
It shows you how much you’re spending each time anyone clicks on any of your ads. You can use this ecommerce KPI for search engines as well as for social media advertising campaigns. You can also call it Cost-Per-Click (CPC).
PPC = Total Advertising Cost / Total Number of Ads Clicked
29. Cost Per Conversion (CPC)
It is the money you spend to turn a visitor into a customer.
CPC = Total Cost for Generating the Traffic / Total Number of Conversions
30. Referral Sources
It helps you identify which sources are forwarding the most visitors to your website. It may be via organic efforts, PPC ads or social media searches.
31. Customer Retention Rate
It is the percentage of customers from a specific time who return to your website and buy.
Customer Retention Rate = [(Number of Customers at the End of a Period – Total Number of New Customers during That Period) / Total Number of Customers at the Start of That Period] x 100
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32. Conversion by Device Type
It is the total number of conversions specific to a device type, mobile, tablet or desktop.
Ecommerce KPIs to Measure Customer Service
The most commonly measured ecommerce KPIs for customer service are:
33. Customer satisfaction (CSAT) Score
You can measure this significant ecommerce KPI by customer responses to your surveys. For example: “How satisfied are you with your experience?” The answer comes from a numeric scale from 1 to 5/10.
CSAT = Sum of all Scores / Total Number of Respondents
34. Net Promoter Score (NPS)
This KPI gives insights into your customer relationships by informing you how likely are customers to recommend your brand to someone in their circle. Depending on the score that is given to the Net Promoter question, you can distinguish three categories of people:
- Promoters = respondents giving a 9 or 10 score
- Passives = respondents giving a 7 or 8 score
- Detractors = respondents giving a 0 to 6 score
NPS = % of Promoters – % of Detractors.
35. Customer Service Email Count
It refers to the number of emails your customer support team receives from your customers.
36. Average Complaint Resolution Time
This KPI for ecommerce is the amount of time it takes for your customer support to resolve a customer issue, starting from the point where your customer first reached out to you with a problem.
Avg. Complaint Resolution Time = (Number of Customer Service Requests – Total Number of Unresolved Request) / Total Number of Requests Received
37. Refund/Return Rate (RR)
If your refund or return rate is too high, it means you’re unable to fulfill customer expectations on your product pages or in your checkout process.
RR = [(Current Value – Original Value) / Original Value] x 100
Ecommerce KPIs to Measure Manufacturing
The most commonly measured ecommerce KPIs for manufacturing are:
38. Cycle Time
It identifies the manufacturing time of a single product. This ecommerce KPI allows you to improve production efficiency with valuable insights.
39. Overall Equipment Effectiveness (OEE)
This KPI provides insights on how well any manufacturing equipment is performing.
40. Overall Labor Effectiveness (OLE)
This KPI is as important as OEE. It provides you information and insights about your machinery, the OLE will inform you how productive is your staff who are operating your machines.
A straightforward ecommerce manufacturing KPI, Yield is the number of products that you’ve manufactured.
42. First Time Yield (FTY) & First Time Through (FTT)
FTY is also referred to as First Pass Yield. It is a quality-based ecommerce KPI which tells you how wasteful your production process is.
FTY = Divide the Total Number of Successfully Manufactured Units / Total Number of Units That Started the Process
43. Number of Non-Compliance Events or Incidents
When it comes to manufacturing, there are a few sets of regulations, licenses, and policies that ecommerce businesses need to comply with. They are generally related to safety, working conditions, and quality, and you must reduce this number to make sure you’re operating within the mandated guidelines.
Ecommerce KPIs to Measure Store Performance Management
The most commonly measured ecommerce KPIs for project management are:
44. Hours Worked
The total number of hours highlight important information about how much time your team is putting into any particular project. Your managers must assess the difference between estimated vs. actual worked hours in order to predict and resource future projects with ease.
Your budget is the amount of money you allocate for your project. You must ensure your budget is realistic. Also, there may come a few minor adjustments to your project budget as per its planning and execution.
46. Return on Investment (ROI)
This ecommerce KPI tells you how much your efforts have earned your online business. This KPI accounts for all of your expenses and earnings. To keep things simple, the higher this number, the better.
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47. Cost Variance
This KPI refers to examining your total cost against your predicted cost. It helps you understand where you need to hold back and where you should invest more.
48. Cost Performance Index (CPI)
The CPI, like the ROI, tells you the worth of your resource investment.
CPI = Earned Value / Actual Costs
Measuring your Ecommerce Success
In order to appropriately measure the success of your online business, there are three primary goals you must keep in focus:
1. Work with Relevant Ecommerce KPIs Only
You must identify the right ecommerce KPIs for your online business. To do so, you need to ask yourself the right questions, such as:
- Which industry do you belong to?
- Are you running a startup or a well-established business?
- What are the business goals for your current stage?
Similar questions will allow you to discover the key ecommerce KPIs for your online business and the specific goals you wish to accomplish.
Pro Tip: Identify One Main KPI (OMM) and choose four to eight supporting KPIs that can assist your OMM. Popular examples of OMMs are:
- Customer Lifetime Value (CLV)
- Cost Per Acquisition (CPA)
- Return on Ad Spend (ROAS)
2. Measure Your Ecommerce KPIs as Accurately as Possible
In a tech-thriving world, where new and better solutions are popping up almost everyday, Google Analytics still dominates when it comes to tracking ecommerce website performances. The Google Tag Manager further allows you to measure tailored ecommerce KPI data which comes in handy when analyzing the market position. It allows your non-technical team to conveniently set up data collection without having to log into your online store or messing up the code of your website.
3. Set up Realistic Benchmarks to Track Success
Business milestones or benchmarks are vital to business growth as they provide valuable insights into what strategies are working and which ones aren’t. It further allows you to measure the growth rate for your ecommerce KPIs.
Here’s how you can benchmark your core ecommerce KPIs in six simple steps:
- Identify your long term business goals
- Identify the current performance of your website
- Determine which areas you must focus to measure
- Identify the right KPIs and KPIs to track success
- Set up a benchmarking itinerary or schedule
- Perform, measure, tweak, repeat!
By and Large,
Once you’ve set your business goals and KPIs, it is essential for you to monitor and update those KPIs on a regular basis. In order to run a data-driven ecommerce business, it is highly important for you to have data from all the relevant ecommerce KPIs on a single spreadsheet.
Being an entrepreneur, it is essential for you to view your entire marketing performance under one umbrella and identify precisely what areas require more attention. Your performance should impact your business decisions and you should use the aforementioned KPIs to drive actions.
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