6 Key Ecommerce Metrics Every SMB Owner Should Be Tracking

6 Key E-Commerce Metrics Every SMB Owner Should Be Tracking


Successful e-commerce businesses determine the essential metrics and key performance indicators (KPIs) to measure their online stores’ performance and growth. 

For small businesses who just started using e-commerce software and are only becoming aware of tracking website performance, it can be a little overwhelming and confusing. What are the metrics significant for e-commerce businesses? How are these metrics measured? 

This article provides a rundown of the key e-commerce metrics to help you scale your e-commerce business and make well-informed decisions based on data. Learn why it’s crucial to measure these metrics and their role in shaping your marketing strategy. 

  • Average Order Value (AOV)

Every marketing decision and budget allocation is essential for small e-commerce businesses. The Average Order Metric (AOV) shows the average price customers spend on one order from a company. It’s an important metric as it relates to measurements of marketing campaigns and effectiveness. The AOV also reveals whether or not the business is spending too much in acquiring new customers.

Product bundling, upselling, adding free shipping, and offering discounts can raise the AOV. To calculate AOV, divide the total sales by total orders. So, if a business sells $30,000 products on a single day and the breakdown is 200 orders placed by customers, the AOV would be $150 per order. 

You can work with an e-commerce virtual assistant to help you with this so you can focus on more important business aspects.

Ecommerce Metrics Every SMB Owner Should Be Tracking

  • Customer Acquisition Cost (CAC)

The customer acquisition cost (CAC) measures the average cost businesses spend to gain one customer, covering everything from marketing, sales, hosting, and staff costs. For example, if the company spends an average of $25 on acquiring a customer, the average order value is only $20, which counts as operating at a loss. 

CAC can also be calculated by sources, such as social media or traffic channels. In this case, businesses can reduce CAC by improving conversion rates, investing in organic marketing like SEO and social media, and utilizing referral marketing so that existing customers bring in new customers. 

Customer acquisition cost is measured by dividing all the sales and marketing expenses by the number of customers acquired within a set period. The result should show growing e-commerce small businesses to determine profitability and efficiency.

  • Sales Conversion Rate

The e-commerce sales conversion rate refers to the percentage of users who visit the online store and make a purchase. Naturally, the higher the conversion rate the store receives, the better. If the percentage dips dramatically, you need to take a good look into your e-commerce site to see why your visitors aren’t checking out.

One of the benefits of hiring a VA is to assist you with research-based tasks and optimize your product listings. Your e-commerce VA can upload quality product images, offer stronger value propositions, include product reviews, and use enticing product copy, among others. 

To measure the conversion rate, divide the number of sales by the number of users, and multiply that by 100%. If 2,000 users visited an e-commerce store, and only 30 people made a purchase, the conversion rate for that time frame would be 1.5%.

  • Cart Abandonment Rate

It’s tough to see potential buyers adding items in their cart—one step left to check out—only to abandon them. There could be different reasons behind this, such as high shipping costs or unexpected extra fees, payment security concerns, or poorly designed user experience.

Simplify the checkout process, utilize remarketing, and send cart abandonment emails to prompt shoppers to return so you can reduce your abandonment rate.

Ecommerce Metrics-Cart abandonment

To quantify cart abandonment rate, divide the number of completed cart checkouts within a time period by the total number of carts loaded within the same given time. Then, multiply the result by 100. 

  • Customer Lifetime Value (CLV)

Customer lifetime value (CLV) is the total amount the business earns from the customers over the length of the business-customer relationship. Monitoring this value shows how much effort e-commerce businesses should put in to retain repeat customers and how much they can spend to acquire new customers.

Of course, increasing CLV has to do with how businesses build long-term relationships, which is one of the challenges of an e-commerce customer experience. So, make sure to improve your support pages, remain reachable through your support channels, and improve your response time to address concerns immediately. 

You can calculate CLV by multiplying the average order value by the average purchase frequency rate and the average customer lifespan. For instance, if the e-commerce business earns $200 over 10 transactions for five years, then the average CLV is $10,000. 

  • Customer Retention Rate (CTR)

Repeat customers come back because the brand has established itself trustworthy with every purchase the customer has made over time. These customers are the lifeblood of an e-commerce store since retaining satisfied customers costs less than acquiring new ones.

However, if a business is losing customers as fast as they’re acquiring them, there may be something wrong with customer relationship management or products. 

Ecommerce Metrics

The customer retention rate measures a business’s ability to keep customers coming back upon acquiring them. Listening to them through customer feedback is one way to determine how a company can improve its retention strategy. 

To calculate CTR, use the formula: [(E-N)/S] x 100 = CRR. Subtract the number of new customers acquired during a given period from the number of customers at the end of the same period. Divide the result by the number of customers gained at the beginning of the period, then multiply by 100. 

Say, an online store had 100 customers at the beginning of the period (S), ended the period with 100 customers (E), and acquired 10 customers over the same period (N). The CRR would be 90%. 

Stay in Tune with Data

Track and monitor the critical metrics for a data-driven e-commerce business. Looking at the insights will determine the areas that require improvement and immediate attention and initiate a change in strategy to increase growth. 

Working with a virtual assistant can help e-commerce small business owners ensure efficiency, achieve their goals, and meet important KPIs that ensure they’re on the right track to continued growth. 

Get in touch with Outsource Access to help you find the VA with the right skills and expertise for your business. Book a call now to learn more about Outsource Access’s process and for other concerns.

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