E-commerce is not a sit back and let it happen process, a successful e-commerce business will be looking at different metrics and setting themselves KPIs to track growth and efficiency within the process. This is where the beauty of digital marketing and e-commerce lies, we can measure, we can analyse, we can make data-driven decisions. For years marketers had to make educated guesses on “impressions” of a billboard or newspaper advert but now we have cold hard data to tell us about our efforts. This article breaks down the vast numbers of metrics that are available and advises on which metrics you should be prioritising, tracking, and forming your KPIs.


What is a KPI?

KPI stands for key performance indicator. While a metric is any quantified measurement, such as conversion rate, a KPI is an important metric that is the tell-tale metric that shows whether your e-commerce site is growing. It is usually specific, e.g., conversion rate is a metric, your metric might be to increase your conversion rate to 10%.


E-commerce metrics available

There are numerous books written about all the various e-commerce metrics that you can use to track your efforts, (if you want a read, I wholly recommend How to Measure Digital Marketing by Laurent Florès) because there are oodles of metrics available to website owners. With data provided by Google Analytics, social media platforms, Bing, your e-commerce platform, email marketing providers, CRM etc you could easily get lost down a rabbit hole of data, trying to figure out if your e-commerce business was doing ok.  

Choosing the right metrics and KPIs

I would love to turn to you with a one size fits all selection of metrics with readymade KPIs, however, of course, it is specific to your business and the metrics that you are measuring need to be relevant to your company.

You should consider the following:

  • What are your objectives, as a company, a department and for your digital efforts?
  • What product do you sell? Is it seasonal? Is it a luxury/expensive item that involves more research and consideration than a normal good?
  • Why is a certain metric a sign of success for your business? E.g., why is an increase in impressions on your website a success if they do not go on to buy?

KPI examples by Onstrategy. Sierra Six Media SEO agency Essex.

Most important metrics to analyse for e-commerce

That being said, it is still useful to present the metrics that we at Sierra Six Media deem to be the essential metrics to track for most e-commerce businesses. There may be others more suited to your specific business or one of these may not be as relevant for you.

  • Conversion rate = a crucial metric to measure the number of people that come to your website and actually make a purchase. You don’t want to go to the expense of using PPC or spending hours creating content for SEO only for your website users to not make the desired action on your website.
  • Average order value (AOV) = looks at how much people are spending on your website each time. With AOV tracking, you can look at ways to increase this with sell-ups and accessories etc so for the same effort and cost, you are increasing your revenue
  • Cost per acquisition (CPA) = needs to be analysed in context to your AOV, to ensure that you are not losing money per sale rather than generating profit.
  • Customer lifetime value (CLV) = a trickier but just as important metric, it is the total amount you earn from your customers over the length of their relationship with you, as measured by AOV, repeat transactions, and retention period. 
  • Abandonment rate = this metric will tell you the number of people who add a product to their shopping cart but then leave your website. Tracking this could highlight problems with usability on your website which can then be fixed
  • Traffic sources = are your PPC channels being effective, have your SEO efforts working, do you receive a lot of social traffic, this can help focus your marketing efforts and budget.

Track and Trace

Deciding which e-commerce metrics are most important and relevant to your business and then figuring what KPI targets you should choose to analyse your e-commerce performance can be daunting. Sierra Six do this daily and are on hand to help with any element of digital marketing that you need. Let the experts guide you, call us today to arrange a free consultation with a digital marketing professional.

Rachel Downes,
Content Creator, Sierra Six Media.