Google has certainly created the best analytics platforms that are being widely used by various online retailers. But while it’s vital for eCommerce corporations to unremittingly gauge their website performance and develop their conversion funnel, failing to use the right metrics can quickly lead you astray.

For this reason, it’s important to start with a well-defined metrics strategy centered on clearly defined and measurable goals. What do you want to accomplish? And what are the KPIs (Key Performance Indicators) that’ll you get there?

KPIs are key metrics that help your business understand where your achievements arise from, and what modifications you require to increase your customer base and generate more revenue. Focusing on the best Key Performance Indicators for your eCommerce business helps in monitoring your business as well as making sure it’s moving towards meeting your objectives. It also helps you ensure that you’re not going off track. They can also help you generate more revenue via the following ways:

  • Increasing the average order value: You can attract your clients to spend more on your store when they make a purchase.
  • Increasing the conversion rate: This increase will encourage more people to purchase something from your eCommerce shop.
  • Reducing the cost per acquisition: To sustain and make more profits for your business, you need to reduce the advertising and other costs for acquiring customers.

While there’s no silver bullet for defining the goals or metrics that exceedingly matter for your business, this guide highlights 6 important eCommerce metrics that’ll boost your revenue when you track and optimize them.

1. E-commerce Conversion Rate

E-commerce conversion rate or sales conversion rate is the percentage of your visitors who took an action on your site. These actions can be micro conversions like email newsletter signups to file downloads and ad clicks. The conversion rate informs you of how efficient your eCommerce website is at persuading passive visitors to take an action.

Understanding this number is important in determining the amount of traffic required to generate your target sales. This will help to ensure that micro conversions will eventually pave way for macro conversions such as buying products and increasing repeat purchases. Here are key ways to improve your conversion rate:

  • Set eCommerce conversion rate by category of products: Various categories tend to have better conversions than others.
  • Add trusted badges: This helps allay any anxiety on whether the website is legitimate and not a scam.
  • Set conversion rate by channel: You can opt to use Google Ads, Online traffic, SEO or Facebook.
  • Improve your value proposition: Make it crystal clear to your visitors on why they are there and how you can assist them.
  • Set conversion rate by campaign: For instance, when working with affiliates or influencers.
  • Add customer submitted reviews: Potential customers can read through and get affirmation that what they are purchasing is what they are looking for.
  • Use large, high-quality images.
  • Add live chat

You can track conversion rates by setting up a Google Analytics goal. Google Analytics allows you to set four different types of goals.

You should also implement e-commerce tracking.

2. Average Order Value (AOV)

According to some experts, there are only three ways to grow your company i.e. increase your number of repeat purchases, the number of customers and the average order size. The AOV is the average amount a customer spends when they purchase an item from your website. This implies that if more customers buy a single order, your profit will substantially increase.

You can increase the AOV for your store through many ways. Here are a couple of ideas to help you start off:

  • Offer free shipping for higher purchases: You can entice your customers to buy more products at the same time in order to qualify for free shipping.
  • Offer discounts on minimum purchases: Informing your customers that they could qualify for a larger discount when they hit a minimum purchase target helps improve your AOV.
  • Upselling: You can persuade customers to purchase an additional item or more expensive item than the one they were intending to buy.
  • Incentivize them with a freebie: Inform your customers that they can get something free when they buy a more costly item or hit minimum purchase target.

3. Revenue on Advertising Spend (ROAS)

Revenue on Advertising Spend (ROAS) is an effective eCommerce metric that informs you how effective your investment in online advertising is performing. For instance, if you wish to make your marketing campaigns effective, you need to increase the ROAS. You can access the ROAS by checking the cost analysis report in Google Analytics under Acquisition.

Improving your revenue on advertising spend is highly subjective as it depends on the traffic sources that are doing well. However, here are some general tips to help utilise your expenditure.

  • Stop advertising on channels that don’t work – The point of testing multiple channels is to find the RIGHT one that matches your needs.
  • Invest more on profitable channels – Spot a traffic source that’s over-delivering and scale up on it by investing more money and time in it.

4. Customer Acquisition Cost (CAC)

Customer acquisition cost (CAC) is a vital eCommerce metric that has been growing in use, alongside various developments of online stores and web-based advertising campaigns that are tracked. This is the average expense you use to gain a single customer. This entails everything from advertising and sales expenditures to earnings and overhead costs related to enticing and converting a visitor to a customer.

You can reduce the customer acquisition cost by:

  • Improving your sales conversion rates: A greater conversion rate implies that more visitors are converting into customers.
  • Enhance user value: Be able to generate something pleasing to the visitors like adding additional feature enhancements that clients have conveyed an interest in.
  • Invest in your customers by providing exceptional customer services.
  • Advertise through both paid and free channels: Reduce marketing costs by leveraging through channels like social media, PR and online communities.

5. Customer Lifetime Value (CLV or LTV)

Customer lifetime value is the projected amount of money that an average customer would spend on your products and services. This eCommerce metric helps estimate your marketing costs and examine your acquisition tactic. There are a couple of ways of calculating CLV of your customers. Below are three formulas you can use:

Check your CLV on Google Analytics by navigating to Audience then Lifetime Value

Raise your customer lifetime value by:

  • Increasing your customer’s average order value
  • Establishing long-term relationships with your clients
  • Creating brand loyalty by making sure you offer high-quality products and are consistent during marketing initiatives.

6. Percentage of Returning Customers

As much as getting new clients is important, focusing on retaining your existing customers shouldn’t be neglected. You can accomplish this by:

  • Implementing a client loyalty program
  • Sending regular newsletter emails
  • Plan meet-ups and offline events


There are more eCommerce metrics such as Shopping Cart Abandonment Rate, Net Promoter Score and Website Traffic that have proven to help your business grow steadily. Together with the metrics outlined above, you’ll be able to engage in highly targeted campaigns and monitor visitors as they progress from interested leads to long-term loyal customers.

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