Choosing the correct KPIs for your eCommerce business

Below are some examples of the most used KPIs in eCommerce and their explanations to help you get some insights on which ones you can use, how and why.

• Conversion rate (CR) – is the number of customers that complete a sale after visiting your site and viewing a product. Conversion rate is closely tied to overall revenue metrics. You can also measure the conversion rate per traffic channel to understand which source has the best performance for your business.
  
  
• Average order value (AOV) – is the average amount of money a customer spends per order. Increasing your AOV can be one of the easiest ways to boost your revenue. It can also help measure how well you capitalize on cross-selling and upselling opportunities.
  
  
• Gross profit margin – is the actual profit you earn on top of the cost of goods sold (COGS). It is the difference between your revenue and profit as a percentage. This is essentially your profit on the product after sale, factoring how much you spent on the inventory yourself.
  
  
• Cart abandonment rate – it refers to visitors placing items in their shopping cart, but then leaving the site without completing the purchase. The number of items added to the cart, the value of items added to cart, and how long they shop are all important as well.
  
  
• Customer lifetime value (CLV) – is the amount of revenue on average that you earn per person throughout their entire lifetime as a customer for your company. Knowing how much revenue a customer generates over his/her lifetime can help you invest in the right channels sooner.
  
  
• Customer retention rate – refers to the rate at which customers stay with a business in a given period of time. It is important to monitor your customer retention rate to see if consumers are coming back – and to understand what’s driving them to stay or pushing them to leave.
  
  
• Customer engagement – is how much time a user spends on the product while completing actions or using certain features. The level of engagement your customers have with your service, often measured using reactions, shares, and subscriptions. The more active your customers are, the more likely they are to purchase and share their experience with others.
  
  
• Customer acquisition cost (CAC) – tells you how much your company spends on acquiring a new customer. It’s the amount spent to acquire customers divided by the number of acquired customers. This gives you an idea of how much effort — and money — it takes to actually get a paying customer.
  
  
• Bounce rate – is the percentage of customers that abruptly leave your site after visiting only one page. If lots of users are bouncing off of a page quickly, then you need to assess why that is.
  
  
• Average ticket resolution time – is the time needed for a customer problem to be solved. The longer it takes, the less likely they are to become a repeat customer.
  
  
• First response time – is the average amount of time it takes a customer to receive the first response to their query. It should always be as low as possible.
  
  
• Traffic source – tells you where visitors are coming from or how they found your site. Knowing where customers are coming from can help you capitalize on your best channels.
  
  
• Time on site – tells you how much time visitors are spending on your website. Generally, more time spent means they’ve had deeper engagements with your brand.
  
  
• Pageviews per visit – refers to the average number of pages a user will view on your site during each visit. In general, visiting more pages usually means higher engagement. However, if it takes the user too long to find what they are looking for, you may need to check again your website design.
  
  
• Email open rate – tells you the percentage of subscribers that open your emails. If you have a low email open rate, you could test new subject lines, personalize the information your send to each user or even just try cleaning your list for inactive or irrelevant subscribers.
  
  
• Click-through rate (CTR) – referring mostly to email CTR. It tells you the percentage of those who actually clicked on a link after opening. This is far more important than the open rate because this is what will drive traffic to your website in the end of the day.
  
  
• Return on Investment – how much your efforts earned your business. The higher this number, the better. The ROI accounts for all of your expenses and earnings related to a project. This can be an ad, an extra tool you added on your website or marketing investment.
  
  
• Number of new visitors VS number of returning visitors – New visitors are the ones that are coming to your e-shop for the first time. Returning visitors are the ones who have been there before, they are the proof that your web shop was a conscious choice for them. These two numbers can help a lot with marketing campaigns planning.