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E-Commerce Business Overview
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It's essential to zero in on the key performance indicators that truly reflect the effectiveness of your sales and marketing campaigns. We cover the things you need to know about ecommerce KPIs, including the most important metrics to help you stay on top of your business’s health and success.
Not all ecommerce KPIs are created equal.
Some are great predictors to your online store’s success, giving you meaningful insights about your store’s performance.
While some KPIs provide a more superficial understanding of your online store's achievements.
That’s why learning which KPIs are worth tracking and analyzing is crucial.
It's essential to zero in on the key performance indicators that truly reflect the effectiveness of your sales and marketing campaigns.
Continue reading as we cover the things you need to know about ecommerce KPIs, including the most important ecommerce metrics to help you stay on top of your business’s health and success.
Ecommerce Key Performance Indicators (KPIs) are quantifiable measurements that help ecommerce businesses track their performance.
The idea is to track and measure KPIs to determine your company’s operational, financial, and strategic achievements.
Ecommerce key performance indicators are critical since they show your online business’s performance against your company’s goals. KPIs help uncover insights to inform and guide decision-making.
Monitoring the right ecommerce KPIs equips you with valuable insights to boost your marketing efforts’ effectiveness, conversions, customer satisfaction, revenue, and operational efficiency.
Let’s define what metrics are before differentiating them from KPIs.
Ecommerce metrics and KPIs are quantifiable measurements.
However, unlike KPIs, metrics are used for measuring specific business processes’ performances at an operational level.
Some metrics go with business objectives, but they’re not the most important business performance indicators.
Essentially, metrics are any data collected as part of regular business operations—and you can use a mix of custom metrics to identify long-term KPIs for your company.
While you use metrics as units of measurement to derive KPIs, KPIs are metrics with a pre-defined goal for a specific period.
Put simply, every KPI is a metric, but not all metrics are KPIs.
The most significant difference between metrics and KPIs lies in their context.
You can use metrics to monitor performance across all areas of your business effectively.
On the other hand, you use KPIs to track performance toward specific objectives or goals.
Below is a quick rundown of metrics vs. KPIs:
METRICS
Measure specific business activity or process’s performance.
Has a lower-level perspective.
Relevant for specific business areas or departments.
Intended for strategic decision-making.
KPIs
Measure progress toward key business objectives.
Has a high-level perspective.
Relevant across various departments.
Tend to be tactical or operational.
Ecommerce KPIs are crucial to determine whether your business’s daily operations support your overall goals.
KPIs are also crucial for ecommerce success because they help your business with the following:
There are countless KPIs you can track, but you must stick to those relevant to your goals and business, especially when doing ad hoc analysis.
To do that, you need to know the various types of ecommerce KPIs first, such as sales, marketing, customer service, manufacturing, and project management KPIs.
We’ll focus on the three main types: Sales, marketing, and customer support KPIs.
Sales KPIs can show your business’s performance based on conversions and revenue.
Essential ecommerce sales KPIs include the following.
Monitoring sales can tell you how well your operations are working based on your goals, whether hourly, daily, weekly, monthly, quarterly, or annually.
The average order size or average market basket KPI tells you how much customers usually spend on a single order from your store.
The gross profit is the money your business makes after accounting for the cost of everything involved in getting that sale.
You can calculate gross profit by subtracting the Cost of Goods Sold (COGS) from your total sales.
The average margin (or average profit margin) is a percentage representing your profit margin over a certain period.
The Average Order Value (AOV) KPI refers to the value of customer orders.
The KPI lets you track the average dollar amount spent every time a customer places an order on your website.
The conversion rate is the rate (percentage) at which users on your ecommerce website are converting or buying.
You can calculate the conversion rate by dividing the total number of website, page, selection of pages, or category conversions by the total number of conversions.
The KPI is what the name suggests: the total number of transactions on your ecommerce website.
You can track this KPI with your total website visitors or average order size.
It helps determine whether your marketing and sales initiatives drive people to transact with your business, including conversions and purchases.
Tracking the new customer order against returning customer order metrics allows you to compare your new and repeat customers.
The KPI comparison can help you determine your customer retention rate and how it fares against your customer acquisition rate.
The shopping cart abandonment rate shows the total number of visitors who add products to their shopping carts but do not check them out.
A lower number is ideal since a high shopping cart abandonment rate can mean too much friction in your checkout process.
The Customer Lifetime Value (CLV) metric indicates a customer’s worth to your business throughout the buyer’s relationship with your brand.
The idea is to increase the CLV over time by boosting your initiatives to foster customer loyalty and relationships.
The ecommerce churn rate KPI tells you how quickly customers leave your brand or cancel and not renew their subscriptions to your services.
The Cost of Goods Sold tells you the amount you spend to sell a product, including employee wages, overhead, and manufacturing costs.
The Revenue Per Visitor (RPV) shows you an average of how much a buyer spends during one visit to your ecommerce website.
A low RPV indicates that you must adjust the user experience and your sales strategy to encourage more purchases, boosting revenue.
The Customer Acquisition Cost (CAC) shows how much your business spends on acquiring new customers.
You can measure the CAC by looking at your marketing spend and breaking it down per individual customer.
The product affinity KPI tells you the specific products customers buy together.
You can use the insights from tracking this KPI to inform and shape your cross-promotion strategies and increase sales.
Marketing KPIs show how well your marketing and advertising efforts work towards your goals.
You can leverage the KPIs to understand which products customers are buying, including who buys them and how and why they’re buying the items.
Key marketing KPIs include the following.
The time on site KPI shows how much time visitors spend on your website.
Generally, a longer time on site means your visitors engage deeper with your brand, making them more likely to convert or buy.
Ideally, you’ll want to see visitors spending their time longer on your landing pages and blog posts and less time on the checkout process.
The website traffic metric is the total number of users visiting your ecommerce website.
More site traffic can mean more opportunities to engage visitors and entice them to convert and buy.
The page views per visit is the average number of pages users view on your website during each visit.
More page views mean more engagement and conversion opportunities.
However, consider reviewing and adjusting your page design if users spend too much time on your web page since this can mean they have difficulty finding what they want.
New visitors are those who visit your website for the first time, and returning visitors are those who have been to your ecommerce site before.
The comparison metric can help you assess your marketing campaign’s success.
For example, if you run retargeted ads, your returning visitors should go higher.
The bounce rate shows the number of users who leave your website after viewing only one page.
If you have a high bounce rate, check why visitors abandon your website, including the factors that keep them from exploring further.
For instance, slow load page load speeds and confusing site navigation can frustrate visitors and cause them to leave.
The traffic source metric indicates where your website visitors come from and how they found your site.
It can tell you which marketing channel drives more quality traffic, such as your paid ads, social media platforms, and organic search.
The Cost-per-Click (CPC) or Pay-per-Click (PPC) shows how much you spend every time a potential customer clicks on your paid ads on Facebook, Google, and other channels.
The average session duration is the time a user spends on your website on a single visit.
You can calculate this by dividing the total duration of all sessions by the number of sessions within a specific period.
The revenue you earn for each dollar you spend on advertising on a specific channel like Google is known as ROAS.
Essentially, ROAS tells you if your ad campaigns generate significant returns.
The display or banner ad Click-Through Rates (CTRs) is the percentage of viewers who clicked on your ad.
The KPI can tell you if your ad copy, offer, and imagery capture viewers’ attention and lead people to your landing pages or website.
The email CTR tells you the percentage of subscribers who clicked on the link within your marketing emails.
It can tell you if your emails are effective enough to convince subscribers to click on and follow the link to your offer or landing page.
The email open rate represents the percentage of subscribers who opened your marketing email.
If you have low email open rates, consider refining your subject lines and copy or clean your email list to remove irrelevant or inactive subscribers.
You can track your website’s Search Engine Optimization (SEO) and paid search performance through the average position KPI.
The KPI can tell you where your website stands on Search Engine Results Pages (SERPs).
The higher your position, the better since more people can see your web page at the top.
Clicks are the total number of clicks links within your social media, email, website, PPC, display ad, and other channels.
The newsletter subscribers refer to the total number of people who opted into your email marketing list to receive your newsletters.
More subscribers means you can reach more customers.
However, check related data, such as your newsletter subscribers’ demographics, to ensure you reach your ideal or target audiences.
Customer Service KPIs show your customer service’s effectiveness and whether it meets (or exceeds) consumer expectations.
Customer service KPIs that help you track and measure if you provide top quality, positive consumer experience include the following.
The first response time KPI tells you the average time your customers receive responses to their queries.
The lower the number, the faster and more efficiently your customer service team gets back to customers.
You can measure the Customer Satisfaction (CSAT) score based on customer responses to common survey questions.
For example, customers can answer from a scale of one to five to indicate how satisfied they were with their experience with your brand.
The Net Promoter Score (NPS) gives insight into your customer loyalty and relationships by showing how likely customers are to recommend your business to others in their networks.
You can measure NPS through single-question surveys with a range of -100 tp +100.
The amount of time it takes for your customer support rep to resolve a customer issue is known as the average resolution time.
Measurement starts from the point when a customer reaches out to your customer service about a problem and ends when the issue is resolved.
The hit rate shows the number of successful customer interactions compared to the total number of overall interactions.
High hit rates can show that your customer service team resolves customer issues effectively.
The active issues KPI refers to the number of customer queries in progress or those your customer service team hasn’t resolved yet.
Tracking the total number of customer service tickets gives insights into your inquiry and issue volume.
The abandonment rate applies to live chat and phone calls. It represents the percentage of customers who leave an interaction before reaching your live customer service rep.
A high abandonment rate can mean prolonged wait times that frustrate your customers, causing them not to finish an order or buy from your online store again.
The escalation rate is the percentage of customer queries referred to senior staff or managers.
An ideal escalation rate should be low and infrequent since a surge in escalations can mean you have broader issues.
For instance, customers are more likely to request speaking to managers due to poor frontline response or issues with the product.
The first contact resolution KPI is the percentage of total inquiries your customer service team rep resolved at the first point of contact within a specific period.
High first-contact resolution rates suggest that customer issues are fully resolved at the frontline.
On the other hand, low rates can mean problems with your customer reps’ response quality.
The average wait time measures how long your customer must wait to reach your reps.
For phone calls, you can calculate the average wait time from the first ring until a live rep answers, including the time the customer spent listening to your automated messages.
Long wait times usually coincide with higher abandonment rates, so it’s best to keep this low.
Using the right tools makes tracking and analyzing your KPIs so much easier and simpler. Consider using the tools below.
One of the best ways to analyze data and your ecommerce KPIs is to create visual reports.
Use reliable, modern Business Intelligence (BI) software like Polymer to generate visual reports and dashboards of your ecommerce KPIs in a flash.
Polymer offers multiple built-in integrations for Shopify, Google Analytics, Google Ads, Facebook, Zendesk, and more, so you can pull your ecommerce data to the platform easily.
Your data is ready within seconds, and you can start creating charts, graphs, maps, and other visualizations—making Polymer one of the top 10 best ecommerce apps for 2023.
Polymer’s intuitive Board Designer feature lets you edit and customize your reports.
You can build an ecommerce dashboard quickly and easily.
The software also offers an AI assistant that can quickly reveal insights and generate visualizations from your data with one click.
You can also create custom metrics in Polymer by making simple calculations through numerical columns.
You can customize Poylmer’s ecommerce dashboard templates so you won’t need to build them from scratch.
Once you’re done, you can save and share your reports and dashboards by configuring your sharing settings.
You can even embed your visualizations into your platform.
Learn all how from this Embedding the Polymer experience into your platform guide.
Polymer takes the BS out of BI, allowing you to effortlessly set up your data, build visualizations, share your dashboards, and track your ecommerce KPIs.
Google Analytics lets you track various ecommerce website KPIs to gain insights into your traffic sources, conversions, and user behavior.
The tool helps you track the following ecommerce KPIs:
Shopify includes built-in analytics features for tracking and measuring online retail and important ecommerce metrics.
The platform can track the following KPIs:
HubSpot’s Customer Relationship Management (CRM) software is a popular choice with its ecommerce tracking features.
It allows you to monitor and measure these ecommerce KPIs:
People ask these common questions about ecommerce KPIs.
The frequency of checking your ecommerce KPIs depends on your ecommerce business’s store size, the amount of data you generate, and your goals.
Generally, you should check your ecommerce metrics daily, weekly, monthly, or quarterly.
It depends on your KPI.
For example, if you break down your goals into weekly or daily KPIs, making monthly adjustments would make sense.
For long-term KPIs, consider making quarterly or yearly adjustments.
Measurable KPIs allow you to analyze them in numeric terms.
This way, you can do quick but realistic assessments of what you’re trying to measure, including the ability to analyze any process’s progress from start to finish.
Supercharge your ecommerce business by tracking, analyzing, and visualizing crucial ecommerce KPIs with ease.
Bring together all your ecommerce data from various sources into a single, advanced, and easy-to-use BI platform like Polymer.
With it’s AI feature, Polymer can analyze your data, suggest rich insights about your ecommerce business, then create visually appealing dashboards automatically.
Create a Polymer account now to streamline your ecommerce data visualization and reporting.
See for yourself how fast and easy it is to uncover profitable insights hidden in your data. Get started today, free for 7 days.
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