If you are an ecommerce business owner struggling to meet industry benchmarks or measure your performance, you must have heard “just track your metrics” a dozen times.
But with all that ROAS,POAS,AOV numbers scattered around different platforms makes your head spin.
A user-friendly list of key ecommerce metrics for businesses and a unified platform where you could track all your metrics would make your job 10x easier. Plus, some actionable advice based on your data (not just “increase your ads budget”) would be a cherry on the cake.
That is why in this article we will share our list of most important metrics for ecommerce businesses, based on our customer interviews, internal data, and ecommerce trends in 2024.
Why track e-commerce metrics?
For ecommerce businesses to grow they need to invest smartly – not only in products but in marketing and website development. However, when you are at the beginning or on a very tight budget, A/B testing and experimenting can be very risky.
For ecommerce businesses to grow they need to invest smartly – not only in products but in marketing and website development. However, when you are at the beginning or on a very tight budget, A/B testing and experimenting can be very risky.
That is why tracking your key ecommerce metrics helps you get a better overview of your business performance and where you should invest your efforts more.
9 most important ecommerce metrics to track in 2024
For ecommerce business owners, tracking key metrics is essential for optimizing marketing budgets and measuring performance against industry standards. However, without knowing what to measure and how to interpret the data, it can be challenging to make informed decisions about business strategies.
Of course, the number of orders is your #1 metric for any ecommerce brand, but it (alone) doesn’t help you optimize your marketing efforts and sell your product more. Here is a go-to list of X key ecommerce metrics you should track and act on to improve conversion rates:
1. AOV
Average order value (AOV) is the average amount spent by customers per order. It is a useful metric for understanding consumer behavior and can help identify opportunities for upselling and cross-selling to your average customer.
Where to track: Average value is calculated by dividing total sales revenue by the number of orders from your online store
2. New customers
This KPI provides insights into the effectiveness of marketing efforts and the overall growth of the business. By monitoring the number of new customers over time, businesses can identify which marketing channels are most effective and adjust their strategies accordingly.
Where to track: New customer data can be found in your e-commerce platform’s customer database or analytics dashboard.
3. Returning customers
Returning customers are a valuable asset for ecommerce businesses as they tend to spend more and have a higher lifetime value than new customers. Tracking the percentage of existing customers can help businesses identify areas for improvement in customer retention and customer loyalty programs.
Where to track: Repeat customer rate is available in your e-commerce platform’s customer database or analytics dashboard.
4. Net profit
Net profit is the amount of revenue left over after all expenses have been paid. It is a critical metric for understanding the financial health of the business and can help identify areas for improvement in cost management and revenue generation.
Where to track: Net profit can be calculated by subtracting total expenses from total revenue, as reported in your financial statements or accounting software.
5. ROAS (net returns on ad spent)
Return on ad spend (ROAS) is a metric that measures the revenue generated by advertising campaigns compared to the cost of those campaigns. It is a useful metric for understanding the effectiveness of advertising efforts and can help businesses adjust their advertising strategies to maximize ROI.
Where to track: ROAS is calculated by dividing the revenue generated from advertising campaigns by the cost of those campaigns and expressed as a ratio or percentage.
While ROAS provides insight into revenue generated, it doesn’t account for profit margins or operational costs associated with sold goods. This can lead to misleading conclusions, especially in industries with thin profit margins or campaigns promoting heavily discounted products.
6. POAS (profit on ad spent)
Profit on ad spend (POAS) is a metric that measures the profit generated by advertising campaigns compared to the cost of those campaigns. It is a useful metric for understanding the profitability of advertising efforts and can help businesses adjust their advertising strategies to maximize profit.
POAS, on the other hand, measures the gross profit gained from every ad dollar spent. It considers not only revenue but also subtracts costs such as the cost of goods sold (COGS), shipping, and transaction costs.
By focusing on POAS, ecommerce businesses gain a clearer picture of campaign profitability. It allows them to make informed decisions based on actual profits rather than just revenue. Additionally, POAS helps prioritize campaigns that drive higher profits, rather than solely focusing on revenue generation.
This enables D2C brands to make data-driven decisions that align with their profitability goals. That is why our Magic attribution model focuses more on POAS to showcase the real profitability of ad campaigns.
Where to track: POAS is calculated by subtracting the cost of advertising campaigns from the revenue generated by those campaigns.
7. CAC (customer acquisition cost)
Customer acquisition cost (CAC) is the cost of acquiring a new customer. It is a useful metric for understanding the effectiveness of marketing efforts and can help businesses adjust their marketing strategies to maximize ROI.
Where to track: CAC is calculated by dividing the total cost of acquiring customers (including marketing and sales expenses) by the number of new customers acquired.
7. Traffic sources (attribution)
Tracking traffic sources is essential for understanding where website traffic is coming from and which marketing channels are most effective for the sales conversion rate. By using attribution models, businesses can identify which marketing efforts are driving the most traffic and adjust their strategies accordingly.
For instance, if a business owner finds that most of their sales are coming from organic search, they might invest more resources in search engine optimization (SEO) efforts.
However, keep in mind that some attribution models (like last click attribution) give credits to the final touchpoint, and thus, don’t represent an objective view of the customer journey.
8. Orders
This metrics provides a clear picture of how many transactions are taking place in the online shopping cart. By monitoring order volume over time, businesses can identify trends in sales and adjust their strategies accordingly. For example, if order volume is consistently low, it may be time to reevaluate pricing or marketing efforts for your ecommerce store.
Where to track: You can find the number of orders in your e-commerce platform’s analytics dashboard
9. Page views
Page views refer to the number of times a page on the ecommerce site has been viewed by visitors. This metric is useful for understanding how engaged customers are with the website and can help identify areas for improvement. For example, if page views are low for a particular product, it may be time to update the product description or images to make it more appealing to customers.
For professional AI product photos you can use WorkMagic’s image generator for free.
Where to track: Page views are typically available in your website analytics platform, such as Google Analytics.
How to track key ecommerce metrics?
Manually
1. Create spreadsheets or use tools like Google Sheets or Microsoft Excel to record and track your e-commerce metrics.
2. Calculate metrics: Use formulas and calculations to determine the values of your e-commerce metrics based on the data you’ve collected. For example, to calculate AOV, divide total sales revenue by the number of orders.
3. Input data from various sources: Don’t forget to get data from your Google and Meta Ads, shipping platform,website, social media,etc.
4. Collect data regularly: Set a schedule for collecting data on your chosen metrics. Depending on your business needs, this could be daily, weekly, or monthly. Make sure to record all relevant data accurately and consistently.
With WorkMagic
With WorkMagic, the process of collecting and analyzing data is automated and streamlined for you. In a comprehensive and intuitive dashboard you have a clear overview of all your important metrics.
Connect your social media accounts, email, ads and shipping platforms and let the magic happen.
Our advanced attribution model precisely identifies the channels and campaigns driving conversions. With detailed insights into ROAS, CAC, and more, you’ll finally understand which channels/campaigns truly work (not just the last touchpoint)
3. In the “all channels” dashboard you can see the total number of:
- Orders
- Page views
- New customers
- Returning customers
- Sales
- Total cost
- Net profit
- Net margin
How to optimize your strategy based on your KPIs?
For example, calculating the cost of acquiring each new customer helps in understanding the efficiency of your marketing campaigns. For example, if a business spends $1000 on a Facebook advertising campaign that results in 50 new customers, the CAC would be $20 per customer.
If your average order value is significantly higher than the CAC, a $20 CAC might be considered good. However, if the AOV is lower, you may need to reassess your marketing strategy’s efficiency
Another example is monitoring conversion rate.
This metrics helps in evaluating the effectiveness of the website in turning visitors into customers. For instance, if a business owner notices a low conversion rate on a particular product page, they might optimize the page layout or product description to improve conversions. Or they might remove and invest in other products.
WorkMagic can provide clear, data-driven suggestions with the power of AI, such as:
1. Low ROAS – Check if your ads lead to unqualified clicks, improve messaging on the ad for clearer expectations.
2. Low ROAS – Introduce bundle offers to increase AOV and ROAS
3. Low CVR and low ROAS – Revise your landing page to improve messaging.
+ add part about WM recommendations when they are ready.
Conclusion
If you don’t know where to start now you have 10 essential metrics, you can track and measure your progress.
If you want to track all your channels and key performance indicators in one intuitive platform, sign up for WorkMagic.