9 Metrics to Pay Attention to When Measuring the Success of Your E-Commerce Store

Opening an e-commerce store is easier now more than ever due to
the proliferation of e-commerce
. When making decisions for your e-commerce store and
identifying areas for growth, it’s best to consult the data
behind your shop.

There are a multitude of metrics that you can identify when
diving into how lucrative your e-commerce store is. You’ll want
to determine what KPIs are
crucial to measuring the success of your business. You may have
metrics that are important to the specific industry your business
falls into, but the metrics listed below are important to identify
and measure for all online stores.

Conversion rate

The conversion rate of an e-commerce store is the
percentage of visitors that turn into paying customers.

You can measure the conversion of just about anything from
overall customer conversion to button clicks on your homepage to
sale conversion on a single product page. Conversion rate matters
because it is the most important metric to focus on when measuring
success and increasing sales for your store.

How to calculate it

To find your conversion rate for your e-commerce store, take the
total number of conversions (or number of sales) and divide it by
the number of site visitors. You can find this rate for any
specific period of time. Just make sure that the period of time is
the same for both conversions and site visitors.

Average order

The average order amount is simple. It’s just the average
value in each purchase from your site.

Increasing average order rate is an easy way to increase sales.
Consider offering discounts for bundle purchases or providing free
shipping for a higher total purchase amount (i.e. your order ships
free with a $75 purchase!). This will compel your buyer to spend
more to earn the benefit of free shipping – a win for them, a win
for you.

How to calculate it

Take the total sales revenue of your business and divide it by
the number of orders.

This can be calculated for a short period of time or the
lifetime of your business.

Customer lifetime value

Your store’s
customer lifetime value
is the total amount of revenue that
you’ll bring in from a typical customer during their

Customer lifetime value is a great metric to assist in making
other decisions for your business. For example, if you have a low
customer lifetime value amount, you shouldn’t spend too much on
acquisition costs or retention.

How to calculate it

Calculating customer lifetime value can’t be done until you
have had repeat purchases from customers.

To calculate, follow these few steps:

  1. Find the average purchase value by taking the
    sales revenue from your store in a specific time period and divide
    it by the number of purchases during that time.
  2. Calculate the average purchase frequency rate of your
    by dividing the number of purchases during the
    same period of time by the number of unique customers.
  3. Find customer value by multiplying the average
    purchase value and the average purchase frequency rate
  4. Calculate the average customer lifespan by
    averaging the number of years a client continues to purchase from
    your company.
  5. Find customer lifetime value by multiplying
    customer value  by the average lifespan of a customer. This number
    is an average and represents how much you can expect to receive
    from a single customer.

This number can change throughout the lifespan of your business
and is dependent on product and service. In order to maximize it,
ensure that you are making your customers happy so they have a
reason to return.

Acquisition cost

Customer acquisition cost is the amount that it costs for you to
acquire a new client.

To make money off of your customers, it’s important that your
cost is as low as possible. It must be lower than
your customer lifetime value.

How to calculate it

To calculate the acquisition cost of a customer, take the total
amount your business spends on marketing in a defined period of
time and divide it by the number of clients acquired during the
same time.

Revenue from traffic source

Revenue from traffic source is found by identifying what avenues
of traffic your revenue is stemming from.

Some of your traffic streams will have higher conversions than
others. Identifying which areas lead to higher conversion rates can
lead to higher conversion can signal where you should be spending
more of your advertising budget.

How to find it

In order to find the revenue from traffic source, you’ll need
to use analytics software like Google
in order to track it. Analytics from Google has
real-time reporting that can allow for you to make small changes in
your advertising spending to see what works and what doesn’t.

Shopping cart abandonment rate

Shopping cart
rate is the percentage of visitors who add items to
their shopping cart but do not follow through with making a

Shopping cart abandonment directly affects your e-commerce
store’s sales. No matter what you do, it’s impossible to
eliminate this from occurring to your store. However, to maximize
your sales, you’ll need to decrease the abandonment rate as much
as you can. Try simplifying the checkout process or use remarketing
tactics, such as cart abandonment emails, to convert these
potential clients.

How to calculate it

Finding your shopping cart
rate is as simple as dividing the total number of
purchases in a period of time by the number of shopping carts that
were created. Take that number and subtract it from 1 to get your
abandonment rate.

Your e-commerce platform may provide you with this statistic

Email opt-ins

Email opt-ins is the number of people who have signed up to
receive email communication from your store.

Email communication with your customers and potential customers
is an excellent way to drive traffic, increase sales, and promote
specific products or promotions. Not only is email communication a
way to foster brand recognition, email marketing is proven to be
successful  with a $44 return on investment for each dollar spent.
In regard to email opt-ins, you should try to build your list up
with as many engaged and interested individuals as possible.

You’ll want to ensure that your list is large and engaged.
Track your email engagement through open rates and click through

How to find it

To find the number of individuals signed up for your emails, you
can check the analytics in your for the number, or simply count the
number of individuals who have signed up through your form. From
here, you should also pay attention to the unsubscribe rate as well
– you’ll want to keep this number as low as possible.

Return rate

Return rate for your e-commerce store is the number of purchases
that are returned in comparison to the number of orders placed.

Keeping your return rate as low as possible is important for
customer retention. Make sure that customers are satisfied with
your products and aren’t surprised by anything when they receive
your product. A low return rate can signify customer satisfaction
and can lead to word-of-mouth referrals.

How to calculate it

It’s simple to find the return rate on your e-commerce store.
Simply take the number of returned orders and divide it by the
number of total orders from your store during a specified period of

Customer retention rate

Customer retention rate is the percentage of customers who make
a repeat purchase from your business during a specific period of

Retaining your existing customers is cheaper than acquiring new
ones. Therefore, you’ll want to try to maximize the retention
rate by convincing customers to become repeat customers.

How to find it

In order to find
customer retention
rate, you’ll need to decide on the period
of time that you are measuring. After that, you’ll also need
three other numbers: the number of total customers at the end of
the period, the number of new customers acquired during the period
of time, and the number of customers at the start of that period of

Subtract the new customers from the number of customers at the
end period. Then, divide that number by the number of customers at
the start of the period.

What about the others?

With over
1.66 billion digital buyers
in 2017, the e-commerce industry
shows no signs of slowing down anytime soon. These metrics are a
great starting place in measuring the success of your e-commerce
store. However, as you continue to grow and change, make sure that
you’re identifying other statistics to measure that are more
specific to your industry.

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Pay Attention to When Measuring the Success of Your E-Commerce
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9 Metrics to Pay Attention to When Measuring the Success of Your E-Commerce Store