13 Metrics For Ecommerce To Track In 2023: Complete Ecommerce Metrics Guide
As ecommerce evolves, so do the metrics you need to track.
The digital landscape is constantly changing, and as a store owner or marketer, it’s important to stay up-to-date with the changes and adjust your strategy accordingly.
But what are key performance indicators (KPIs) to keep an eye on this year?
We have gathered 13 of the most important metrics for ecommerce to track in 2023, along with advice on how to use them to your advantage and fuel your brand’s progress and profits.
So, let’s get started.
13 Key Metrics For Ecommerce Tracking
1. Average Order Value (AOV)
Average Order Value (AOV) is a crucial metric that measures the average amount spent by customers in a single transaction. It provides valuable insights into the purchasing behavior of your customers and helps you understand their spending patterns.
Calculating AOV is simple: divide the total revenue by the number of orders during a specific period.
Why is AOV important?
AOV directly impacts your revenue and profitability. By increasing your AOV, you can maximize the value you get from each customer and drive your business toward growth.
A higher AOV means customers are purchasing more items or spending more money per order, resulting in increased revenue and potentially higher profit margins.
Tips to optimize AOV:
- Cross-selling and upselling
Encourage customers to add complementary or higher-value products to their cart. Showcase related products on the product page, offer bundle deals, or suggest additional items during the checkout process.
- Implement volume-based discounts
Offer tiered pricing or quantity-based discounts to incentivize customers to buy more.
- Create product bundles
Combine related products or create curated sets to increase the perceived value for customers.
- Offer limited-time promotions
Create a sense of urgency and exclusivity by running time-limited promotions or flash sales.
- Implement a loyalty program
Reward loyal customers with exclusive perks, discounts, or early access to new products.
2. Customer Retention Rate (CRR):
Customer Retention Rate (CRR) is like a friendly gauge that measures the percentage of customers who keep coming back to your store for more. It’s a nifty little metric that tells you how well you’re doing at keeping your customers happy, building their loyalty, and boosting your long-term profitability.
To calculate CRR, you simply divide the number of customers who return for more by the total number of customers during a specific period and then multiply it by 100.
Why is CRR important?
CRR gives you a solid grasp on how successful you are at keeping those valuable customers coming back for more.
A high retention rate indicates that customers are satisfied with their purchases and returning to make more purchases in the future, while a low retention rate may indicate dissatisfaction or a lack of loyalty among your customers.
Tips to optimize CRR:
- Focus on delivering great customer service
Make sure that customer inquiries are answered quickly, and all issues are resolved in a timely manner.
- Offer incentives for repeat purchases
Reward customers for their loyalty with discounts, exclusive offers, or free shipping on orders over a certain amount.
- Build relationships with customers
Follow up with customers after purchases and stay in touch with them regularly via email campaigns or social media.
3. Customer Acquisition Cost (CAC):
Customer Acquisition Cost (CAC) is the amount of money you spend to bring in new customers.
Think of it as a grand total of expenses, including paid ads, affiliate commissions, discounts, and any other costs related to attracting new customers.
To calculate CAC, divide the total cost of customer acquisition by the number of new customers acquired during a certain period.
Why is CAC important?
CAC acts like a financial crystal ball, revealing how well your customer acquisition strategies are working. High CAC means you are burning money fast and need to optimize acquisition strategies, while low CAC means you’ve struck gold with cost-effective tactics.
Tips to optimize CAC:
- Establish a clear marketing strategy
Develop a well-defined marketing strategy that outlines your goals, target audience, and budget.
- Optimize your ad spend
Keep track of your ad performance and adjust budgets accordingly to ensure you are getting the most bang for your buck.
- Leverage organic traffic
Focus on building organic traffic by creating quality content and optimizing for search engine visibility. This can help you acquire new customers while also saving money on paid marketing efforts.
- Utilize data analytics
Analyze customer behavior and use data-driven insights to inform your acquisition strategy.
4. Customer Lifetime Value (CLTV):
Customer Lifetime Value (CLTV) measures the total amount of money a customer spends on your store over their lifetime.
To calculate CLTV, multiply the average purchase value (AOV) by the average customer lifespan and number of purchases.
Why is CLTV important?
CLTV helps you understand how much revenue you can expect to generate from a single customer over their lifetime. It can also be used to determine the ideal amount that you should be spending on customer acquisition and retention efforts.
Tips to optimize CLTV:
- Focus on customer satisfaction
Ensure that customers have a positive experience when they interact with your store.
- Provide personalized experiences
Leverage data to provide customers with personalized product recommendations or discounts based on their purchase history or browsing behavior. This can encourage customers to make more purchases and also increase AOV.
- Optimize your pricing strategy
Review your pricing structure periodically to make sure it remains competitive in the market.
- Encourage referrals
Offer incentives for customers who refer friends or family to your store. This can help you acquire more customers at a lower cost and increase CLTV in the long run.
5. Returning Customer Rate:
The Returning Customer Rate (RCR) or repeat customer rate is a metric that measures the percentage of customers who make repeat purchases from your ecommerce store.
This ecommerce KPI provides insights into the loyalty and satisfaction of your customer base, indicating how successful you are in retaining customers over a specific period.
To calculate the RCR, divide the number of customers with repeat purchases by the total number of unique customers and multiply by 100.
Why is Repeat Customer Rate important?
The RCR is a critical metric as it helps you gauge the effectiveness of your customer retention strategies.
A high RCR signifies that customers have had positive experiences with your brand and are motivated to come back for more. Plus, repeat customers are likely to spend more, refer others to your store, and become brand advocates.
So, focusing on increasing the RCR can contribute to long-term success and sustained growth for your online business.
Tips to improve RCR:
- Provide a seamless post-purchase experience
Ensure that the entire customer journey, including post-purchase interactions, is smooth and delightful.
- Implement a loyalty program
Create a loyalty program that rewards and incentivizes repeat purchases.
- Nurture customer relationships through email marketing
Develop a robust email marketing strategy to stay connected with your existing customers and nurture relationships.
6. Refund and Return Rate:
Ecommerce journey is not always a smooth ride — there will be return and refund requests, and you need to keep an eye on them!
The Refund and Return Rate is what you need to measure. It’s a metric that measures the percentage of orders that result in refunds or returns, providing valuable insights into the number of customers who are dissatisfied with their purchases or encounter issues that lead to product returns or refunds.
How to calculate it?
Divide the number of refunded or returned orders by the total number of orders and multiply by 100.
Why is the Refund and Return Rate important?
Monitoring KPIs like the Refund and Return Rate is crucial for understanding customer satisfaction and identifying areas for improvement in your ecommerce operations.
A high Refund and Return Rate may indicate issues with product quality, inaccurate product descriptions, or subpar customer support.
By analyzing this metric, you can address underlying concerns, enhance customer experience, and reduce returns, ultimately increasing customer satisfaction and retention.
Tips to reduce the Refund and Return Rate:
- Improve product descriptions and images
Provide accurate and detailed product descriptions, including specifications, dimensions, and usage instructions.
- Enhance product quality control
Implement rigorous quality control measures to ensure that products meet high standards before they are shipped to customers.
- Offer clear return policies
Establish clear and transparent return policies, making it easy for customers to initiate returns and provide them with pre-paid return labels if possible.
- Provide exceptional customer support
Offer prompt and responsive customer support to address any issues or concerns customers may have. Be accessible through multiple channels such as live chat, email, or phone, and ensure that customer inquiries are handled professionally and efficiently.
- Monitor and act on customer feedback
Regularly monitor customer feedback, including reviews, ratings, and direct feedback channels.
7. Return on Advertising Spend (ROAS):
Well-targeted and optimized ads bring in more traffic and sales.
But how do you measure the impact of your ad campaigns?
With this metric called “Return on Advertising Spend (ROAS).”
It measures the effectiveness of your advertising campaigns by evaluating the revenue generated in comparison to the amount spent on advertising.
To calculate ROAS, divide the revenue generated from advertising by the cost of advertising.
Why is ROAS important?
ROAS is a crucial metric for ecommerce businesses as it helps determine the success and efficiency of advertising campaigns.
This key ecommerce metric provides insights into which advertising channels, campaigns, or strategies are driving the highest return on investment. Tracking ROAS can help you make data-driven decisions to optimize your advertising efforts, allocate resources effectively, and maximize revenue.
Tips to improve ROAS:
- Set clear campaign objectives
Clearly define your advertising goals and objectives before launching any campaigns. Are you aiming to increase ecommerce sales, drive website traffic, or promote brand awareness?
- Target the right audience
Ensure that your advertisements are reaching the right audience. Use detailed audience targeting options provided by advertising platforms, such as demographics, interests, and behaviors.
- Continuously monitor and optimize campaigns
Regularly analyze the performance of your advertising campaigns to identify areas of improvement.
- Implement conversion tracking
Set up conversion tracking to accurately measure the impact of your advertising efforts.
- Optimize landing pages and user experience
Ensure that your landing pages are optimized for conversions.
8.Shopping Cart Abandonment Rate:
Cart Abandonment Rate is one of the most important ecommerce metrics as it represents missed opportunities and potential revenue loss for your ecommerce business.
It’s the percentage of users who add products to their shopping carts but leave the website without completing the purchase. To calculate the Cart Abandonment Rate, divide the number of abandoned carts by the total number of initiated carts and multiply by 100.
Why is Cart Abandonment Rate important?
Cart Abandonment Rate provides insights into the effectiveness of your checkout process and the potential barriers that prevent users from completing their purchases.
You can use this metric to identify opportunities to optimize your website, improve user experience, and recapture lost sales.
Tips to reduce Cart Abandonment Rate:
- Streamline the checkout process
Simplify and streamline your checkout process to make it quick, intuitive, and user-friendly.
- Display transparent pricing and shipping information
Clearly display product prices, shipping costs, and any additional fees upfront. Surprise charges during the checkout process can lead to cart abandonment.
- Offer guest account creation
While account creation can have its benefits, offering the option to checkout as a guest can reduce friction and increase conversion rates.
- Optimize for mobile devices
Poor mobile experience can lead to cart abandonment. Ensure that your ecommerce website is mobile-responsive and optimized for mobile devices.
- Implement trust signals
Display trust signals throughout your website and during the checkout process to instill confidence in users. Include security badges, SSL certificates, and trusted payment gateway logos to assure users that their personal and financial information is safe.
- Utilize cart abandonment recovery strategies
Implement cart abandonment recovery strategies such as triggered emails or personalized retargeting ads. Send automated emails to users who have abandoned their carts, reminding them of their incomplete purchase and offering incentives such as discounts or free shipping.
9. Ecommerce Churn Rate
Ecommerce Churn Rate measures the percentage of customers who stop engaging or making purchases from your ecommerce store over a specific period.
It indicates the rate at which you are losing customers and can provide valuable insights into customer satisfaction, loyalty, and the overall health of your business.
To calculate the Ecommerce Churn Rate, divide the number of lost customers by the total number of active customers (for a specified period) and multiply by 100.
Why is Ecommerce Churn Rate important?
This key metric for ecommerce helps you understand customer retention and the effectiveness of your strategies to keep customers engaged and loyal.
A high Churn Rate suggests that you are losing customers at a faster rate, which can impact your revenue and long-term growth.
By monitoring KPIs like churn rate, you can take proactive measures to reduce churn, retain customers, and foster loyalty.
Tips to reduce Ecommerce Churn Rate:
- Provide exceptional customer support: Focus on delivering exceptional customer support throughout the customer journey.
- Implement a customer loyalty program: Create a customer loyalty program that rewards and incentivizes repeat purchases.
- Gather and act on customer feedback: Regularly gather customer feedback through surveys, reviews, or feedback forms.
- Analyze customer behavior and engagement metrics: Monitor customer behavior and engagement metrics such as frequency of visits, time spent on site, and interaction with your content.
- Implement personalized re-engagement campaigns: Develop targeted re-engagement campaigns to win back customers who have become inactive or have shown signs of churning.
10. Net Promoter Score (NPS)
Net Promoter Score (NPS) is an interesting and crucial metric to have in your ecommerce KPI dashboard.
It provides insights into how likely your customers are to recommend your ecommerce store to others.
But how do you calculate it?
NPS is calculated based on customer responses to a single question:
“On a scale of 0-10, how likely are you to recommend our store to a friend or colleague?”
Based on their answers, customers are categorized into three groups:
- Promoters (score 9-10)
- Passives (score 7-8)
- Detractors (score 0-6)
Here is how you will calculate NPS from their responses:
NPS = %age Promoters – %age Detractors
Now this value may be positive or negative based on how many promoters or detractors you have.
But what is a good NPS value?
According to Inc:
- 0 to 50 = Good
- 50 to 75 = Excellent
- 75+ = World class
This means anything above “zero” is a safe and decent value.
Why is NPS important?
NPS is important because it provides a straightforward measure of customer satisfaction and loyalty. Plus, it helps you gauge the overall sentiment of your customers and identify opportunities for improvement.
A higher NPS indicates a higher likelihood of customers recommending your store, which can lead to increased customer acquisition and growth.
Tips to improve NPS:
- Prioritize exceptional customer service
Invest in providing outstanding customer service at every touchpoint. Train your support team to be knowledgeable, empathetic, and responsive. Use AI chatbots to make yourself available 24/7 for your customers.
- Actively listen to customer feedback
Create channels for customers to provide feedback, such as surveys, reviews, or customer feedback forms. Actively listen to customer comments, suggestions, and concerns. Use this feedback to make improvements to your products, services, and overall customer experience.
- Build a community and foster engagement
Create a sense of community around your brand by engaging customers through social media, forums, or online communities. Encourage them to share their experiences, feedback, and recommendations.
- Continuously improve your products and services
Regularly assess and enhance your offerings to meet customer needs and expectations.
- Follow up with Detractors and address their concerns
Pay special attention to Detractors and their feedback. Reach out to them individually to understand their concerns and find ways to address their issues.
11. Website Traffic:
Website Traffic is another important ecommerce KPI that measures the number of visitors coming to your ecommerce website.
Why is Website Traffic important?
Website Traffic is important because it serves as the foundation for your online success. It helps you assess the effectiveness of your marketing efforts, identify popular content, and make data-driven decisions to optimize your website’s performance.
Key metrics to track website traffic include total visits, unique visitors, page views, and the source of traffic (organic, paid, social media, referrals, etc.).
Tools like Google Analytics provide detailed insights into your website traffic, including demographic information, user behavior, and traffic sources.
The more visitors you attract to your website, the higher the chances of converting them into customers.
Tips to increase Website Traffic:
Optimize your website for search engines to improve organic visibility.
- Content marketing
Develop a content marketing strategy that focuses on creating valuable, informative, and engaging content. Publish blog posts, articles, videos, infographics, or other forms of content that resonate with your target audience.
- Social media promotion
Leverage the power of social media to promote your website and attract traffic.
- Email marketing campaigns
Build and nurture an email list of subscribers who are interested in your products or services. Send regular newsletters, updates, or exclusive promotions to your subscribers to drive traffic back to your website.
- Paid advertising
Invest in paid advertising campaigns to drive targeted traffic to your website.
12. Bounce Rate:
Bounce Rate is a metric that measures the percentage of visitors who leave your website after viewing only a single page.
A high bounce rate indicates that visitors are not engaging further with your website content and are leaving without taking any action. It can be an indication of a poor user experience, irrelevant content, or other factors that fail to capture visitors’ interest.
To reduce bounce rate, you need to capture visitors’ attention, provide relevant content, and encourage them to explore further within your website.
Tips to reduce Bounce Rate:
- Improve website design and navigation
Ensure that your website has an intuitive and user-friendly design. Make it easy for visitors to find the information they are looking for.
- Enhance page load speed
Optimize your website’s loading speed to minimize waiting times. Compress images, enable browser caching, and optimize code to improve overall performance.
- Create engaging and relevant content
Ensure that your website content is compelling, informative, and tailored to your target audience’s needs.
- Optimize for mobile devices
Test your website across various devices and ensure that the user experience is seamless and consistent.
13. Average Session:
This ecommerce KPI measures the average duration of a visitor’s session on your ecommerce website. It provides insights into how long visitors spend exploring your website, engaging with your content, and interacting with your products or services.
To calculate the average session duration, divide the total duration of all sessions by the number of sessions.
Why is Average Session important?
Average Session is important because it reflects the level of engagement and interest visitors have in your website.
A longer average session duration indicates that visitors are spending more time interacting with your content, browsing products, and potentially considering making a purchase. It can be an indication of a positive user experience, relevant content, and effective website navigation.
Tips to increase Average Session duration:
- Create valuable and engaging content
Develop high-quality content that provides value and keeps visitors engaged.
- Offer related or recommended products
Display related or recommended products on product pages to encourage visitors to explore additional offerings. Use algorithms or machine learning to personalize product recommendations based on visitor behavior, purchase history, or browsing patterns.
- Improve website navigation
Ensure that your website has intuitive navigation menus, clear categories, and prominent search functionality.
- Implement interactive elements
Incorporate interactive elements such as quizzes, calculators, surveys, or interactive product configurators to engage visitors and prolong their session duration.
- Optimize page load speed
Ensure that your website loads quickly to prevent visitors from leaving due to slow loading times.
- Analyze user behavior and make improvements
Utilize ecommerce analytics tools to gain insights into visitor behavior and session patterns. Identify pages with low session duration and assess potential issues such as poor content quality, confusing layout, or technical glitches.
These are some of the key ecommerce metrics every store owner and marketer should track.
By monitoring KPIs like conversion rate, customer acquisition cost, average order value, and social media engagement, you can gain valuable insights into your performance and make data-driven decisions to optimize your strategies.
Elevate Your Ecommerce Game: Embrace Data-Driven Decision Making
Remember, success in ecommerce is not just about having a great product or website; it’s about understanding your audience, measuring your efforts, and adapting to the ever-changing landscape of online marketing.
If you’re looking for expert assistance in ecommerce marketing or SEO, consider partnering with Mongoose Media. As a modern media agency equipped with the latest AI tools and a commitment to staying ahead of marketing trends, we can help you unlock the full potential of your ecommerce business.
Take charge of your success today and reach out to Mongoose Media for a transformative partnership.