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0:13 Which ecommerce KPIs should you focus on?
0:51 Average order value
2:29 Cart abandonment rate
4:16 Conversion rate
4:56 Cost per acquisition (CPA)
5:51 Customer lifetime value
Average order value
Average order value (AOV) provides information on the typical amount customers spend per visit. AOV is an important ecommerce KPI to track because it can be manipulated by your marketing efforts. The coupons you develop, the customers you attract, and the products you promote will all impact your AOV, which reflects the success of your business.
Cart abandonment rate
Cart abandonment rate is an ecommerce KPI that tracks the percentage of people who add items to their cart without completing the purchase. This number varies by website and industry, but the universal average for 2020 is 69.57%. Cart abandonment can highlight problems in your ecommerce business, like a long and complicated checkout process.
Conversion rate
In addition to tracking abandonment rates, look at your conversion rate (CR). This ecommerce KPI takes into account the total number of people who buy versus the total number of people who have the opportunity to buy (i.e. web traffic). At a high level, you can review the CR of everyone who lands on your site or navigate to specific product pages. You can also consult the CR by department, by AOV and by position in the basket. CR is another ecommerce KPI where minor adjustments can significantly increase your profits.
Cost per acquisition
At the very least, your team can track the cost per acquisition (CPA) ecommerce KPI to understand how much it costs to attract people to your business and get them to convert. At the highest level, take your total marketing cost for the month and divide it by the number of sales over the same period. If your site spends $2,000 on marketing and attracts 100 customers, your CPA is $20.
Customer lifetime value
Another ecommerce KPI to monitor as you grow your ecommerce business is customer lifetime value (CLV). The easiest way to track this metric is to take your AOV and multiply it by the number of customer visits per year and the average time spent with your business.
Once you have an idea of the most important ecommerce KPIs for monitoring the health of your site, develop a process to check them regularly. Some companies achieve this through Google Analytics reports or develop their own reporting tools that provide windows into the information they need. Not only does your report need to be readable, but it also needs to be valuable.
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