Top 15 eCommerce KPIs to Track the Performance of Your Online Business​

Is your eCommerce website performing well? Are you spending your advertising
budget wisely? Find answers to these questions by reading about 15 eCommerce APIs to track your eCommerce website performance.

Expanding the online presence of a business is the key to its success in today’s digitally dynamic
world. Many factors are involved in the smooth running of an eCommerce solution, and companies
must track all of them to ensure a seamless customer experience.

Businesses need clarification about KPIs to monitor their eCommerce website’s performance.
Most only track three KPIs: traffic, revenue, and sales eCommerce. They must remember many
vital aspects of tracking and enhancing their eCommerce business performance.

But not anymore. We have assembled a list of 15 eCommerce metrics to help streamline the
tasks and track the performance of your eCommerce business.

What is an eCommerce KPI?

eCommerce KPIs are like a milepost that help determine the progress of an eCommerce business
on its path to success. The eCommerce KPIs usually vary from business to business, depending
upon their business and functional requirements. Once the KPIs for eCommerce businesses are decided, they are regularly
tracked and monitored.

Some examples of eCommerce KPIs are bounce rate, time on site, cost of customer acquisition,
shopping cart abandonment rate, and conversion rate. These key eCommerce metrics help
businesses to lay a roadmap to accomplish their defined targets.

Why are
eCommerce KPIs Important?

Using time-tested strategies for your eCommerce business may seem like the way to go, but a
marketing plan that may have worked for one eCommerce development company
may have a different effect on yours. Therefore, enforcing an eCommerce strategy will only
do good if customized to fit your business needs. Once you have designed the roadmap, you
must check its success rate closely.

Many different metrics make up the eCommerce umbrella. Often, this can overwhelm an eCommerce
professional. They may focus too much on a single eCommerce metric making the success
visible on paper when, in reality, the overall performance could improve more.

Instead, as an eCommerce professional, you must focus on the interdependencies between each
eCommerce KPI. It will help to get an effective revenue-generating plan.

15 best eCommerce
metrics to track your website performance

There are various tools available to measure, analyze, benchmark, and improve the experience
on your digital commerce website across
multiple channels by helping you track the following eCommerce KPIs:

• Conversion Rate
  

  When users visit your site, you want to qualify them into leads and
  convert them into buyers. Routing them in the right direction is vital and needs to
  be strategically done.

  The global average conversion rate is between 1-3%. It may be even
  higher for some of the best marketers, but achieving even the average number can
  affect the profit.

  

  Businesses can optimize conversion rate by creating an intuitive
  call to action, A/B testing for improvements, and simplifying the checkout process.
  Even though increasing the conversion rate should be your primary motive, you also
  want your customers to become loyal to your brand. So, define your conversion rate
  eCommerce KPI based on these parameters.

  You need to know your goals and define ways to achieve them. Don’t
  stick to one method only. Keep experimenting with new ideas until you find the best
  method suited for your business.

  

• Churn Rate
  

  Customers may only sometimes be satisfied with the service they
  receive from the company. Creating a solid relationship with your customers should
  be a top priority. Unhappy customers can stem from either underperforming products
  or unsatisfactory customer service.

  Embracing a multi-channel customer service system and delivering
  positive customer experiences are the most significant factors that help retailers
  turn visitors into satisfied customers and satisfied customers into loyal ones.

  

  A poor experience can leave them with a bad taste, which may
  irritate them to the point where they write negative reviews about you online.
  Providing exceptional service can leave a lasting impression on your customers, and
  they will keep returning to do business with you.

  The churn rate, one of the vital eCommerce KPIs, is the number of
  customers that discontinue their subscription to your business after a specific
  time. A low churn rate means you have a happy customer base. The average monthly
  churn rate of a SaaS company is 3-8%,
  and the average annual churn rate is 32-50%.

  

• Bounce Rate
  

  According to Google
  Analytics, bounce rate is the percentage of visitors who immediately jump
  off after visiting a web page. In simple terms, this eCommerce KPI helps a business
  analyze the number of visitors leaving their website after viewing only a single
  page. The higher the bounce rate is, the more alarming it is for your website.

  What is an ideal eCommerce bounce rate benchmark for any website?

  

• Return Customer Rate
  

  If your company offers different products or services, you want your
  customers to come back to purchase all of them. But this may only sometimes be true,
  especially if your products are sub-par. Hence, you must value and incentivize
  returning customers to ensure they keep purchasing from you.

  The probability of selling to an existing customer is 60%–70%. But the
  probability of selling to a new customer is 5%–20%.

  – Altfield

  The return customer rate or the repeat purchase rate is the rate at
  which former customers come back to purchase other products from you. A return rate
  between 20%-40% is admirable, while those with a rate above 35% can see a
  significant increase in revenue.

  You can increase the return rate through several initiatives to
  engage customers, including notifying and updating your products. Creating schemes
  and programs to reward your return customers is a proven way of bringing back your
  clientele. It is a crucial eCommerce KPI that helps strengthen your bond with
  existing customers.

• Net Promoter Score
  

  A happy customer tells a friend. An unhappy customer tells the world.

  Your customers are free advertising modes that, if treated well, can
  propel your business forward. If your customers are satisfied with your service,
  they will recommend you to a friend, and the cycle continues. But an unhappy
  customer may get so infuriated with the wasted time and effort on your service that
  they may start writing your reviews online for the world to see.

  It is essential to get happy customers advertising your products.
  The willingness of customers to recommend your service to friends is the net
  promoter score. It is graded from 0 to 10. This score can account for 20% to 60%
  of a company’s organic growth.

  Quality products will get your customers talking, but every product
  could be better. Many times your consumers will find faults in them. Effectively
  handling these complaints is the key to a high net promoter score – an important KPI
  metric.

  

• Average Profit Margin
  

  Online businesses must differentiate the products that generate
  large and small profit margins for success. Comparing the profit margins help
  identify the most profitable categories and products in your online store.

  Average Profit Margin is one of the critical eCommerce KPIs
  representing the actual picture of profit or loss across all the products, thus,
  helping a B2C or B2B eCommerce platform
  owner to lay a roadmap focussed towards resources for growth.

  Although an average profit margin may vary from company to company,
  per studies, the average eCommerce gross
  margin is approximately 42%.

• Cart Abandonment Rate
  

  eCommerce sites offer a virtual cart feature for customers who want
  to select multiple items simultaneously. Consumers choose the products they are
  interested in and add them to their virtual carts, and they can then order them at
  their leisure. You may often notice that your customers add items to their cart but
  need to place the order.

  The rate of potential customers who leave without buying any product
  is the cart abandonment rate – one of the vital eCommerce KPIs. The average
  abandonment rate documented online is 69.99%.
  Some ways to reduce shopping cart
  abandonment include email retargeting, allowing guest checkout, and
  eliminating surprise costs.

  

• Customer Lifetime Value
  

  Customer lifetime value is a vital eCommerce metric that helps shape
  the customer retention strategy. In any eCommerce Model,
  gaining new prospects is more costly than retaining existing ones.

  Existing customers are an essential source of revenue generation for
  every business. Thus, improving customer lifetime value is one of the savvy
  retailers’ primary variables and goals while building any growth strategy.

  One of the surest ways to steer the growth of existing customers is
  to deliver above and beyond service, which we call customer improvement, highlighted
  in the Net Solutions’ GROWTH + RETENTION – (G.R.O.W.)th Model.

  

  Customer lifetime value eCommerce KPI helps businesses analyze the
  average revenue their potential customers will spend with their business over an
  estimated lifespan. Customer lifetime value also determines how much your customers
  love your products or services and how to improve them further.

  Formula: CLV (Historic) =
  (Transaction1+Transaction2+Transaction3…+TransactionN) x Average Gross Margin

• Cost Per Acquisition (CPA)
  

  Many eCommerce KPIs, for example, conversion rate, are good
  indicators of business success. But is there any eCommerce metric that highlights
  the money spent on acquiring a new customer?

  Cost Per Acquisition (CPA) or customer acquisition cost is one of
  the financial KPIs for eCommerce businesses that helps measure the revenue impact of
  a company’s digital marketing campaigns. Simply put, CPA is a marketing eCommerce
  KPI that showcases the average cost required to acquire one paying customer on a
  channel level.

  

• Average Order Value (AOV)
  

  Using Cost Per Acquisition eCommerce KPI, you can estimate the cost
  required to grow your customer base. However, it is equally vital to understand the
  amount your target customers spend or the number of orders they place on your
  website. That’s where the Average Order Value (AOV) comes into play.

  Average Order Value is among the critical eCommerce KPIs that help
  businesses to make data-driven decisions by getting valuable insights from the
  customer’s buying patterns, product pricing, and online advertising spending.

  If the cost of gaining a new customer outweighs the amount they
  spend on your website, it implies you are at a loss and need to improve your eCommerce strategy.

  Several ways to improve your AOV include:

  • Improving the checkout experience.
  • Encouraging visitors to purchase more items in a single transaction.
  • Raising the product price.
• Add to cart rate
  

  More than attracting visitors to your website is required. You must
  also ensure that you’re attracting the right audience and making them complete the
  next step (adding products to the cart). Add to cart is an essential eCommerce KPI
  that you must track, and it would let you know how many website visitors added
  products to the cart.

  Here are a few other things you can know by adding to the cart rate:

  • Do your website visitors have a purpose in mind, or they’re just looking around?
  • Have you set the price of your product right, or is it too high?
  • Do your products meet your customers’ expectations?
• Refund or return rate
  

  Refunds or returns are common in the eCommerce industry. But if
  customers frequently return your products and ask for refunds, there’s a problem.

  The refund or return rate eCommerce KPI lets you track how much
  percentage of orders customers return on your eCommerce
  website. Here’s the formula to calculate the return or refund rate:

  RR = [(Current Value – Original Value) / Original Value] x
  100

  A high return rate means your product fails to meet customer
  expectations, and you must take necessary measures to improve it.

• Revenue per visitor (RPV)
  

  The revenue per visitor metric lets you know how much average
  revenue you generate per visitor on your eCommerce website. It is an essential KPI
  that enables you to identify all the bumps and quickly track your eCommerce
  website’s performance over time.

  Here’s how you track revenue per visitor on an eCommerce website:

  Revenue per visitor = Total income/number of visitors over a
  specific period

  If you generated $200,000 in the last quarter and had 100,000
  visitors on your eCommerce website, then the revenue per visitor will be $2.

• Customer satisfaction score
  

  Customer satisfaction is a core metric that can impact your
  eCommerce business. If your customers are satisfied, it will succeed. Hence, you
  must ensure that your customers are satisfied with your eCommerce Website Designs and performance at any cost.

  The customer satisfaction score is the metric you can use to measure
  customer satisfaction. You can calculate it by asking a simple question in a survey:
  “How satisfied were you with your experience?”

  Here’s the formula to calculate the customer satisfaction score:

  Customer satisfaction score = Sum of all Scores / Total
  Number of Respondents

  

• Return on investment (ROI)
  

  Return over investment (ROI) is a great eCommerce metric to see how
  much your investments paid off. Here’s how you track this metric:

  ROI = (Net income/ cost of investment) * 100

  The higher the number, the better, which indicates that your
  investments bear fruit.

  “If you’re able to get a positive ROI with your product, you can reinvest your
  profits into growth, traffic, ads, and conversion rate optimization so you can
  scale.”

  – Jonathan Aufray, Growth Hackers

  It would be best to focus on improving your conversion rate while
  reducing costs to increase your return on investment (ROI).

Frequently Asked Questions

1.  Will the same eCommerce KPIs apply to B2B and B2C
eCommerce?

While we are discussing eCommerce, B2B and B2C eCommerce KPIs might differ as the marketing
strategies for both business types differ. In B2B eCommerce, the focus is on KPIs like page
views, average time on page, web store optimization, online vs. offline purchases, return on
investment, conversion rate, abandoned car rates, and total cost of ownership.

On the other hand, in B2C eCommerce, eCommerce KPIs
like website traffic, click-through rate, time-on-page, and customer acquisition cost take
center stage.

2.  What are the three types of key performance indicators?

3.  What are the characteristics of good KPIs?

Good eCommerce KPIs are transparent, relevant, comparable, cost-effective,
easy to understand, verifiable, and responsive.

4.  What KPI does Amazon use?

Amazon uses KPIs like daily sales, conversion rate, site traffic, unit sales per week,
estimated lost sales, current inventory, and sales rank to track the performance of its
eCommerce website.