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Ecommerce Metrics for Business Owners

Feb 21, 2020 7 min read

The best e-commerce entrepreneurs are obsessed with metrics. It’s this obsession with measuring and optimizing that allowed their firms, companies, and stores to grow so fast. However, they don’t usually measure every single metric available.

What Are These Metrics?

The most successful e-commerce businesses make decisions based on metrics. They know the state of their store's performance at all times and which levers to push to grow. There are so many important but only a few defines company's growth and optimization.

Conversation Rates

A successful marketing strategy for your e-commerce store results in website traffic elevation. At the same time, you realize that the same effect cannot be observed in terms of business sales. Thus, you must always know the sales conversion rate of your online store to read between the lines. Again, this is one of the key metrics used in analyzing the performance of the e-commerce store and you can calculate it using the given formula:

Total Sales / Total Users or Visitors

To track such metrics, you can either use analytics tools like Google Analytics or you can use the sales records that are stored within the third-party e-commerce platform like in the case of Amazon advertising. If you are already tracking this metric for your e-commerce store, then you can probably optimize your e-commerce to enhance this number.

Here is what you can do:

  • Product listings can be optimized using keywords as per the eCommerce algorithms;
  • Pay close attention to web copies and the quality of images used for products or services;
  • Focus on creating a value-based price structure;
  • Understand your customer feedback and reviews.

Customer Life Time Value

Customer lifetime value refers to the average projected revenue you expect your typical customer to provide throughout their “lifespan” with your company.

Nailing down CLV is a bit convoluted and is explained quite well by Neil Patel in the infographic), but it essentially involves taking into consideration:

  • Your AOV;
  • Your average customer’s purchase frequency;
  • The average lifespan of your customers.

All things considered, the purpose of tracking CLV makes sense: the more your customers spend - and the more often they make purchases - the better off your company will be Average order value

CLV brings us to this e-commerce metric. It’s a cost-effective alternative to getting new traffic. After all, it means more revenue at a fraction of the cost – less acquisition and transactional costs.

Why Is It Important?

Because it’s an insight into how mad about your products people are. We all want to be that store that captures customers with everything they’ve ever wanted and get orders for $1000 at a time.

Of course, it also depends on your products In the general case, though, it’s important to monitor average cart value from different acquisition channels and geolocations, as well as products that usually drive order value up (products that require regular maintenance and accessories) or bigger/bundled packs).

Some of the bullet-proof ways to increase AOV include:

  • Bigger/bundled packs;
  • Selling add-ons or services;
  • Gamification/ bonus schemes/ loyalty programs;
  • Mix & match offer.

Website Traffic

Once you have tracked and optimized your conversation rate, you can then look at bringing more people to your e-commerce store. 

There is where measuring website traffic comes in. This isn’t guarantee, of course, but it’s nevertheless important to ensure that people know your online store or page exists to maximize your likelihood of generating more sales.

To grow your website traffic, you can:

  • Promote your offerings on social media;
  • Optimize your site/store for search engines;
  • Grow the number of people subscribing to your newsletter.

Email Opt-In Rate

Email marketing is still pound-for-pound one of the most effective ways to generate high-quality leads.  

After all, it has an amazing 3,800 percent ROI

And considering that 97.58 percent of visitors won’t convert right off the bat, email marketing helps you get the most out of your traffic and prevents fewer leads from slipping through your fingers. 

For that reason, I feel that your email opt-in conversion rate is another one of the e-commerce metrics that shouldn’t be overlooked.

Here’s the formula for calculating it. 

(Number of emails opted in / number of users) x 100 = email option conversion rate

In terms of the average rate, it typically ranges anywhere between one and five percent.

And here are some ways you can increase your email opt-in conversion rate. First, place your opt-in box in a conspicuous location that visitors can’t miss. Just be sure visitors who aren’t interested can easily exit the popup without any hassle. 

Next, only ask for essential information, and keep your form fields to a minimum.

Customer Acquisition Cost

TechTarget defines customer acquisition cost as “the fee associated with convincing a consumer to buy your product or service, including research, marketing, and advertising costs.”

This is one of the most important e-commerce metrics to know because it ensures that the time and money you’re investing in acquiring customers is worth it. 

In some cases, the money brands end up spending to acquire a customer exceeds the revenue they’re bringing in. And this isn’t a viable business strategy for obvious reasons. To calculate your customer acquisition cost, use the following formula.

Total sales and marketing expenses/number of customers acquired = customer acquisition cost

With that said, here are some ways you can lower your customer acquisition cost. Start a referral program where you reward existing customers by referring to others. You could also consider using a nice mix of free and paid advertising methods.

Bounce Rate

There are two types of bounces: hard and soft. Soft bounces may be temporary, such as when an email is returned because the inbox was full. Hard bounces occur when an email is returned from an address that does not exist.

Every email typically has a small percentage of bounces. After all, consumers routinely change email addresses. Your email service provider should automatically remove hard bounces from your file to improve and protect the deliverability of your entire list.

Analyzing bounce rates is especially important for infrequent senders and new addresses. The first deployment to a new email list may have a higher than normal bounce rate. But it should normalize over time. Healthy lists have bounce rates of less than 1 percent.

Revenue per Email or Click

This metric divides the revenue from an email by either the number of opens or clicks. It provides insight into how optimized that email was in generating revenue. The higher the revenue per open or click, the more effective was the email and its offer. The metric can also highlight optimal sending times.

Revenue per Subscriber

Revenue per subscriber is helpful to understand the overall profitability of your email program. The metric is calculated by dividing all revenue for a period (usually one year) by the average number of subscribers. It represents the rough amount of revenue from each subscriber, which helps determine the break-even amount to acquire new subscribers. Thus revenue per subscriber can be a valuable tool when establishing marketing budgets.

Customer Lifetime Value

Customer lifetime value (or CLTV) measures the profit your business makes from any given customer. CLTV is the single most important metric for understanding your customers. CLTV helps you make important business decisions about sales, marketing, product development, and customer support. For example:

  • Marketing: How much should I spend to acquire a customer?
  • Product: How can I offer products and services tailored for my best customers?
  • Customer support: How much should I spend to service and retain a customer?
  • Sales: What types of customers should sales reps spend the most time on trying to acquire?

How Do You Calculate Customer Lifetime Value?

When calculating CLTV there are many nuances to consider based on the specific questions you want answered? The most straightforward way to calculate CLTV is to take the revenue you earn from a customer and subtract the money spent on acquiring and serving them.

Conversation of New vs Returning Visitors

Keep in mind that conversion for returning visitors is traditionally higher because those customers already know you, trust your brand and are more willing to make a purchase. 

For example: If your returning visitors are converting at 7% but your new customers are converting at 2% then the average is somewhere falling around 5%. If you use that to calculate your max budget for acquisition campaigns that convert at 2%, you are going to lose money.

Cart abandonment rate

On average, 68% of people abandon their shopping cart online. That’s a gruesome statistic.

Top on the list with reasons for unsuccessful order management are unexpected shipping costs, followed closely by the fact people start checkout to see the full cost for price comparison. Since these two are similar, it’s a strong indicator your first step in reducing abandonment rate is eliminating hidden costs.

Next in order of destructive effect on your conversions are:

  • Registration needed.
  • People who are “just browsing” or screen shopping.
  • Checkout is not safe enough or too complicated.
  • No free shipping requirements met.
  • Shipping costs don’t show until later in the process.
  • Estimated delivery not fast enough (consider last-mile delivery).
  • Not many payment options;

Conversion by Device Type

Mobile devices accounted for 19% of US retail e-commerce in 2014 and that’s expected to climb to 27% by the end of 2020. The traffic coming from mobile is much higher. If there is a growing or uncommon gap and mobile conversion where one is outperforming another, review the user experience, and see where improvements can be made.

How to measure all these e-commerce metrics?

There are several tools you can use to keep an eye on your online business metrics. It’s best to use software that allows you to break down each metric by location, device used, campaign, and product and so on. Platforms such as Shopify can also help you quickly setup an e-commerce store. Some additional Shopify tools may provide you with accurate analytics and expedite the growth of your venture. 

Also, it’s important to understand the people behind your orders – behavior-driven analytics will give you a new perspective of why and how things happen on your e-commerce site.


Putting this information regularly (at least monthly) is the secret to running a data-driven e-commerce business. One in which campaigns are launched, managed and refine with a purpose. Stay in tune with that data and at any time, at a glance, you'll be able to pinpoint areas that require immediate attention and a change in strategy to see your business grow.

These metrics are very important to every e-commerce business and the owners are highly concerned with its measures. Segmenting these conversions can help you more accurately calculate what you should be spending on the acquisition campaigns.

Written by Mike

Former data analyst and the head of Whatagraph blog team. A loving owner of two huskies, too.

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