There is a lot of actual information about KPIs which online retailers should pay attention to. However, some such information is not absolutely true because the authors seem to confuse KPI metrics that relate directly to sales and the indicators that are important for an abstract site. That’s why we have studied this topic and created for you the list of the most important eCommerce KPIs for online stores. Moreover, this summary table also includes such data as the methodology for calculating them, the interpretation and recommendations for improvement.
| № | KPI metrics | How it is better to calculate | The interpretation | What to do to improve it |
| 1. | Revenue | Revenue = the number of goods which were sold * the price | It is considered to be one of the most significant KPI metrics which is also often used for calculating the others. | If you want to have better revenue you should increase the conversion rates and traffic. |
| 2. | Profit | Profit = revenue – expenses | This KPI demonstrates business success. | The improvement of it depends not only on traffic and conversion rates but it is also important to pay attention to the factors like the way of accounting, logistics, the frequency of purchases, the organization of the storage. |
| 3. | Number of orders | It is measured by analytical systems | It belongs to basic KPI metrics which shows the number of orders made for a certain period. It is often used to calculate other metrics. | It is better to increase conversion rates and traffic. |
| 4. | Total amount of orders | Total amount of orders = number of orders * average check | It shows the whole amount of goods which were purchased for the selected period. | You can either increase the average check due to cross-sale and upsale or spend more money on remarketing, attracting targeted traffic, advertising mailings. |
| 5. | CAC | CAC = MCC / CA, where MCC is total marketing campaign costs related to the acquisition and CA is total customers acquired | It stands for Customer acquisition cost. It is considered in conjunction with another indicator: LTV. | The best variant is to divide the channels into three groups: positive, neutral and negative. You should work thoroughly with neutral while negative channels must be immediately disconnected. |
| 6. | LTV (lifetime value) or CLV (customer lifetime value) | LTV = revenue from 1 client for its planned life cycle – the cost of its attraction and retention | This KPI is closely connected with CAC. The ideal ratio of CAC: LTV is 1:3. | You may increase the average check of one client. Furthermore, it is very useful to analyze the customer groups. Then divide them into 2 groups: with high and low loyalty. To the first group will belong people who make many orders and you should also develop special conditions for them. As for a group with low loyalty, you may offer them to pass a survey, so to speak, reactivation programs\polls “what did not like”. |
| 7. | ROМI (Return of Marketing Investments) | ROMI = (revenue – marketing costs) / marketing costs. It is expressed as a percentage. | The matter is that if you want to have your marketing paid off the indicator of ROMI should be greater than 0. | Work at both targeting advertisements, ad content and the contents of landing pages of the site. |
| 8. | CPO (Cost Per Order) | CPO = cost spent on attracting visitors / number of orders | It is one of the KPI metrics which shows how it cost for you to create one purchase. We advise you to consider it in comparison with the average check. If the order value exceeds the average check it means that you are working at your own expense. | You should analyze the channels of the arrival of traffic and then invest more in more efficient ones and get rid of less effective ones. Sometimes it can also be helpful either to connect an affiliate program or start content marketing. |
| 9. | CR (Conversion Rate) | CR = number of targeted visits (those which ended with a purchase) / total visits. | It is considered to be one of the main KPI metrics of efficiency. | There are a great number of ways beginning with improving website usability and ending with various discounts. |
| 10. | ARPU (Average Revenue Per User) | ARPU = total revenue / number of users. | This KPI shows how much money one user brings for a selected period of time and calculate what planned traffic should be in order to reach a certain level of revenue. | There are two variants: you can either do cross-selling or expand the client base. |
| 11. | ARPPU (Average Revenue Per Paying User) | ARPPU = total revenue / number of customers. | It is worth to increase the index of it because attracting new users is more expensive than making another sale to the old one. | You can improve it with the help of remarketing, loyalty programs and personalized mailings. |
| 12. | AOV (Average Order Value) | AOV = total revenue / number of orders | It is better to increase it because you will have at the same time a positive effect on ROI (Return on investment). | The common ways of improving it are increasing cross-selling and up-sell, developing and implementing a loyalty program, and optimizing the prices of goods. |
| 13. | CAR (Cart Abandonment Rate) | CAR = number of users who put the goods in the cart/number of orders | This KPI demonstrates that the user put the products in the cart, but for some reason changed his or her mind to make a purchase. | First of all, you can use in this case personalized ad networks. Moreover, it is necessary to include trigger messages with reminders. And the most important here is to study what information in a cart is not enough and what users try to find on the site. Consequently, add this content to your site. |
| 14. | Execution of orders | Execution = the number of orders made on the site/number of goods shipped. It is expressed as a percentage. | It helps you to understand how fulfillment works. The ideal index is 100 percent but it is enough for you to have at least 80 percent. | You should improve the quality of the work of logistics and storage. |
To sum it up, now you have the list of the necessary eCommerce KPIs. You need to remember about them, track and improve them in any possible ways.
