10 eCommerce KPIs to Track, Measure and Close the Loop

The foundation of the sales and marketing strategy for your eCommerce brand has been set. You have your vision for your year and sales quarter, and your related goals are queued up. 

You’re ready to go to market (or to revamp your funnel), to track key performance indicators (KPIs) and other metrics, and to convert on sales opportunities.

But where do you start in tracking results? 

Which KPIs do you monitor? And why?

In this post, we’ll explore ten leading KPIs for eCommerce that, properly tracked and measured (and acted upon), will position your brand for runaway success. 

What are eCommerce KPIs?

Most marketers and sellers in eCommerce will be at least somewhat familiar with KPIs as a term. 

The definition is in the name. You can’t implement an effective growth strategy without key performance indicators.

If your chosen KPIs are well-selected and show growth, you’re headed in the right direction, if not already chugging along in your sales and marketing journey. 

If they’re lagging, you have work to do. 

To get you started, or to help refresh your strategic perspective, here are ten core eCommerce KPIs to track in order to build a strong foundation for success (and beyond).

First: Why Are eCommerce KPIs So Important?

“You can’t really know where you are going until you know where you have been.”
- Maya Angelou

Maya Angelou probably wasn’t thinking of KPIs when she dropped that quote, but it’s not a stretch to apply it to the many reasons for tracking and measuring them within your sales cycle.

Simply put, a single KPI traces a line of causality between actions you have taken in your sales and marketing funnel, and the results of those actions. 

Combined with other metrics and with each other, KPIs can create an actionably clear picture of how you are doing with your sales and marketing, and in what areas of your funnel.

Examples: Best KPIs for eCommerce

On to the good stuff. 

Tracking and measuring the below eCommerce funnel metrics as KPIs -- and utilizing them to inform educated adjustments to related aspects of your funnel -- should help ensure you hit or exceed your sales goals over time. 

We’ve arranged them in five buckets, in order to match most broad definitions of the typical marketing funnel (with one little twist at the end for additional resonance).

Awareness

These KPIs for awareness show how well you are helping your products get noticed.

Impressions

Though a bit basic and limited in their usefulness, impressions are still a crucial KPI at the end of the day. They tell you how much traffic is coming to your site. Without eyeballs on your virtual storefront...you can’t sell anything!

Traffic Sources

Similarly, traffic sources are a key KPI for eCommerce managers. When you do get visitors to your “storefront”, it’s essential to understand where that traffic is coming from. This way, you can double down on what’s working for certain sources, and/or refocus labor and spend in areas where you want to see better results inbound to your site.

Consideration

Once you have traffic, now it’s time to keep visitors engaged. Below are some key KPIs for consideration that you’ll want to measure and manage to keep prospective customers on the hook.

Bounce Rate

Your site’s bounce rate refers to the percentage of visitors who leave after viewing only one page. It’s another broad metric, but one you’ll want to consistently monitor anyway. 

A high or increasing bounce rate indicates that something on the page is sub-optimal. You’ll want to test your way out of such a problem ASAP. Conversely, a low or decreasing bounce rate indicates that your pages are firing on all cylinders.

Click-through-rate (CTR)

The previous few KPIs tell you what traffic is coming and from where, and then how long it’s sticking around. 

But there are obviously steps in between. Click-through-rate (CTR) is a big one. 

In a nutshell, CTR tells you how many visitors clicked through to your site against the total who viewed any given link to it. Examples of popular channels through which you’ll want to monitor CTR include email, ads, organic and paid social, and SMS.

However formal or informal, any action you take outside of your site in order to drive traffic to it becomes a campaign. Within each campaign you’re definitely going to want to know what percentage of viewers are clicking over to your product(s).

Conversion

All right. Now we’re getting to the good stuff. 

Here are two of the most important conversion KPIs to track for eCommerce success…

Conversion Rate (CVR)

No surprise here. 

In order to know how well you are doing in terms of sales against marketing efforts, you need to measure how many prospective customers are converting into actual customers. 

A snapshot from a Varos dashboard, indicating one company’s CVR against the Median for others in the Varos Data Set.

Conversion rates can vary in flavor. You can have separate CVRs for marketing qualified leads (MQLs) and sales qualified leads (SQLs), for example. But you always calculate CVR by dividing your reach by your results. 

Higher or rising CVRs are what you want. Falling CVRs tell you that something is not working.

Return on Ad Spend (ROAS)

A majority (if not most) eCommerce brands rely on advertising to drive traffic to their virtual storefronts. 

Social media advertising alone reached $154B in 2022, an increase of 17.4% YOY.
Source.

But we want to ensure that ad dollars are well spent against earnings, right? 

Enter ROAS, a key metric for measuring how much your brand earns against spend on a given ad campaign, or set of campaigns.

Tracking ROAS allows marketers to adjust collateral and strategy as needed to ensure that ads are performing well against internal and external benchmarks (more on that last part in a moment).

With Varos, you can compare your ROAS to High, Low and Median performers in your vertical.

Retention

Let’s say by now that you’ve mastered Awareness, Consideration and Conversion. Sales are coming in and campaign optimizations are in process. At the Retention phase of your funnel, KPIs begin to get somewhat more advanced.

With the below KPIs, sales and marketing leadership can work with the executive and/or financial team(s) of your company to illustrate and improve upon long-term customer relationships.

Customer Acquisition Cost (CAC)

Calculations and benchmarks may vary across companies for generating an accurate and actionable picture of CAC. In general, however, this KPI is generated by dividing your total sales and marketing spend by the number of customers acquired within a specific time period.

Since converting customers is the goal of pretty much everything sales and marketing teams do, it’s essential to know your CAC and to monitor how it might be changing (for better or worse). You can’t improve a disproportionately high CAC without first knowing where you stand, and neither can you guarantee a low one stays low without a good idea of what’s working (and where and why it’s working).

Average Order Value (AOV)

The only thing better than a sales conversion is a bigger sales conversion. 

For eCommerce brands with multiple products or different tiers of product, sales and marketing teams will want to know how much a customer or customer segment is spending per order, and where and when.

AOV helps answer that question. As such, it’s an important KPI for analyzing what’s working and where results might be suboptimal against your offerings, collateral and positioning.

Customer Lifetime Value (CLV)

Up to 65% of a company’s business comes from repeat customers.
- Source

That stat tells you all you need to know about the importance of CLV as a KPI. Identifying which actions and targets result in the highest lifetime value to your revenue is how you begin to truly get your sales and marketing funnel humming.

The Bottom Line: What Goes Through the Funnel?

There’s one last KPI to highlight before we wrap up, and it’s the most important one. We arrive finally at that fifth bucket mentioned earlier. 

Actually, it’s not a bucket. It’s the very water that runs through your funnel!

Return on Investment (ROI)

Nearly everything in your business comes down to this “most key” of key performance indicators, which measures how many dollars returned against what was invested.

For any one action or set of actions you take as marketer, ROI needs to be top-of-mind. 

Even larger or slower investments in dollars and time, that result in a negative ROI in the short or middle term as strategies roll out and take shape, need to eventually invert to a positive and robust value.

Otherwise, you won’t be in business for long.

But how can eCommerce brands do this effectively, with only their own internal metrics and a few more broadly reported, third-party benchmark studies to guide them?

How to Take Next-Level Action on KPIs

After tracking and measuring all of the above, as well as any additional KPIs relevant to your business and strategy, benchmarking is exactly the right next step.

Studies and reports can help your brand get situated. But it’s often a chore to monitor and note the right benchmarks for your industry and niche.

Or, at least, it used to be.

Track and analyze all the KPIs mentioned in this post (and many more) against real, direct benchmarks – in your Varos dashboard.

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About the Author

Yarden Shaked

Co-founder & CEO at Varos

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