The Most Important Metrics that New eCommerce Businesses Need to Track

Summary:

• New eCommerce businesses should focus on several crucial metrics such as Conversion Rate, Average Order Value (AOV), Customer Acquisition Cost (CAC), Customer Lifetime Value (CLV), Churn Rate, and Revenue Growth Rate. Use tools like Google Optimize and HubSpot for insights.
• Monitoring total website visitors, traffic sources, bounce rate, and time on site through tools like Google Analytics, SEMrush, and Hotjar is also essential for understanding how users interact with your store.
• Analyzing sales volume, sell-through rate, stock turn, gross margin, and profit using platforms like Shopify Analytics and Xero helps optimize pricing and manage stock efficiently.
• Regularly reviewing metrics, A/B testing, audience segmentation, addressing feedback, and creating personalized customer experiences can help you use the data you’ve gathered to make improvements and boost customer retention.
• RS Creativ offers our specialized Purple™ process to help save you the time and effort required to conduct extensive market research on your own. Contact us to learn more about how we can work together to create a data-driven growth plan for your store.

For new eCommerce businesses, tracking metrics is not just about numbers—it’s about finding the data that lets you understand customer behaviour and leveraging it to grow. Selecting the right metrics gives you valuable insights you can use to address challenges and seize opportunities in the landscape where your business operates.

RS Creativ has been empowering Shopify store owners to make data-driven decisions for years. Below, we show you how to drive customer engagement, enhance user experience, and boost your bottom line by refining your focus.

Key Ecommerce Metrics to Track

There’s no end to the data you can collect through various platforms and tools, but not all of it gives you a clear picture of where you stand and where you’re going. For that, you’ll want to start by looking at the following:

Conversion Rate

This metric represents the percentage of visitors who complete a desired action (like making a purchase or signing up for a newsletter). Higher conversion rates indicate effective marketing and website usability—and if the conversions you’re looking at are direct sales, they’re also a key indicator of revenue growth.

Suggested Tool: Google Optimize is an effective tool for improving conversion rates. It allows you to conduct A/B testing (where you compare two similar pages or assets against each other to see which elements are performing better) and personalize your content for users. Create a Google Optimize account, link it to your Google Analytics, and start setting up experiments to make your store and product pages more conversion-centric.

Average Order Value (AOV)

AOV measures the average revenue generated per completed order. By optimizing this metric, your business can strategically increase revenue without needing to boost traffic—you’ll make more from the traffic you’re already getting!

Suggested Tool: Google Analytics allows you to track and analyze your AOV through the eCommerce Tracking feature. Enable eCommerce Tracking in your Google Analytics settings, and monitor the AOV under the eCommerce section of your Analytics reports.

Customer Acquisition Cost (CAC)

CAC calculates the total cost of acquiring a new customer, including marketing expenses and other associated costs. Keeping CAC low is vital for maintaining profitability; you want to avoid spending too much on each new customer you acquire so that your margins stay healthy.

Suggested Tool: HubSpot is a robust platform that can help calculate CAC by integrating marketing, sales, and customer service data. Set up a HubSpot account, integrate your various business platforms, and use the analytics dashboard to calculate and monitor CAC.

Customer Lifetime Value (CLV)

CLV estimates the total revenue your business can reasonably expect from a customer throughout your relationship with them. This metric can give you an idea of how many resources to allocate for customer retention—i.e., how much you can afford to spend on keeping a customer you already have, based on what you can still expect to make from them in the future.

Suggested Tool: Kissmetrics is known for its customer-centric analytics, making it a strong tool for calculating CLV. After setting up a Kissmetrics account and integrating it with your eCommerce platform, use the analytics feature to calculate CLV by analyzing customer revenue and retention data.

Churn Rate

Churn Rate signifies the percentage of customers who discontinue their business with you over a certain period. A lower churn rate means high customer satisfaction and loyalty.

Suggested Tool: Mixpanel offers user analytics that help with calculating and analyzing churn rate effectively. Create a Mixpanel account, integrate it with your website or app, and add the necessary events and user profiles to monitor the churn rate.

Revenue Growth Rate

This metric reflects an increase in revenue over a given time period. This is a great overall measure of the financial health and growth trajectory of your business.

Suggested Tool: QuickBooks is a versatile accounting program that can help you monitor your revenue growth rate effectively. Once you have QuickBooks set up and synchronized with your financial accounts, use the reporting feature to track and analyze your revenue growth rate over different periods.

Monitoring Traffic Metrics

Traffic metrics are secondary to the ones listed above, but they’re still important because they indicate user interaction and engagement. This provides a picture of your eCommerce store’s online presence, helps you evaluate the reach of your marketing efforts, and unearths areas that require refinement.

The following traffic metrics offer a well-rounded view of visitor behaviour and interaction:

Total Website Visitors

Your eCommerce store’s total number of visitors is the broadest gauge of your online presence and market reach. The more people you reach, the more potential sales you can make.

Suggested Tool: Google Analytics is a quintessential tool for tracking the total number of website visitors. To begin, set up a Google Analytics account, add your website as a property, and integrate the tracking code into your site’s header. Monitor the “Audience Overview” report to view your website’s traffic data.

Traffic Sources & Channels

Understanding where your traffic is coming from—whether it’s organic search, social media, or referrals—is the key to optimizing your marketing strategies and maximizing your ROI. Focusing on the ways in which people are already finding your store is a great way to build momentum.

Suggested Tool: SEMrush is invaluable for identifying your traffic sources and channels, providing detailed insights into organic search, paid search, and referral traffic. Once you’ve created your account and connected your store, navigate to the “Traffic Analytics” section to analyze your website’s traffic sources and understand the origin of your visitors.

Bounce Rate & Time on Site

These metrics provide insights into user behaviour and site engagement. A lower bounce rate and higher time on site indicate that visitors find your website valuable and engaging.

Suggested Tool: Hotjar is a comprehensive tool that not only provides insights into bounce rate and time on site but also offers visualizations like heatmaps to understand user behaviour. After setting up a Hotjar account and installing the tracking code on your website, explore the dashboard to analyze user behaviour metrics and observe how visitors interact with your site.

Analyzing Sales & Inventory Metrics

These are the metrics that provide a nuanced view of your store’s financial health, logistical efficiency, and overall performance. Analyzing the following data lets you strike a balance between demand and supply, optimize your pricing, and enhance your profitability:

Sales Volume & Revenue

Tracking sales volume and revenue helps you evaluate your store’s performance and identify trends that can influence strategic planning and forecasting.

Suggested Tool: Shopify Analytics is a powerful tool for eCommerce businesses to track sales volume and revenue seamlessly. If you’re already using Shopify as your eCommerce platform, just access Shopify Analytics from your dashboard to monitor sales data, analyze trends, and make data-driven projections.

Sell-Through Rate & Stock Turn

These inventory metrics help you manage stock levels efficiently, prevent overstock or stockouts, and ensure that capital is not unnecessarily tied up in inventory.

Suggested Tool: Inventory Turnover is a dedicated tool that helps businesses calculate and optimize their stock turn and sell-through rates.

Gross Margin & Profit

This data helps you set pricing strategies, control your costs, and improve the overall financial management of your business.

Suggested Tool: Xero is a well-known accounting solution that offers in-depth insights into gross margin and profit.

Using These Metrics to Grow Your eCommerce Business

By closely monitoring and analyzing the metrics listed above, your eCommerce business can identify areas that need improvement—from website design to marketing campaigns, customer service, and more. The next step is to use that information to facilitate real business growth.

Here’s a quick three-phase plan that shows you how to make use of the data you’ve gathered:

Phase 1: Identify Areas for ImprovementPhase 2: Adjust Marketing & Sales StrategiesPhase 3: Improve Customer Retention & Satisfaction1. Regularly Review Metrics: Consistently review all eCommerce metrics to identify trends or anomalies.1. Analyze Marketing ROI: Evaluate ROI for different marketing channels.1. Monitor Customer Satisfaction Metrics: Gauge satisfaction and loyalty through social proof and survey responses.2. Conduct Customer Surveys and Feedback: Gather direct feedback to understand customer needs and preferences.2. Segment Your Audience: Tailor strategies to meet the unique needs of each customer segment.2. Address Customer Feedback: Act promptly on feedback to build trust and loyalty.3. Perform A/B Testing: Conduct tests on your site and campaigns to identify areas for improvement.3. Optimize Pricing Strategies: Analyze gross margin and profit metrics to maximize profitability.3. Implement Loyalty Programs: Encourage repeat business and enhance CLV.4. Prioritize and Implement Changes: Implement necessary changes to enhance user experience and performance.4. Test and Refine: Continuously refine strategies based on performance data.4. Personalize Customer Experiences: Utilize data to personalize experiences and offers.

Just remember: tracking the right data and using it to create an effective growth plan for your business will require time and tools, so you’ll have to be prepared to invest in your success. RS Creativ can be your strategic partner in this process—we’ve spent years collecting accurate data for our Shopify clients and showing them how to action our findings effectively, and we’re happy to tell you more about how we can do the same for you.

Frequently Asked Questions about eCommerce Metrics

How does RS Creativ provide better insights to help my store grow?

Every one of our clients starts with what we call the Purple™ process. This involves:

• Over 30 hours of deep research into your brand
• An analysis of your competitors
• Thoroughly auditing your store’s UX, product catalogue, and content.

This data provides a comprehensive framework for your growth plan—showing your store’s current position in the landscape and available growth opportunities. The Purple™ process costs $5,000 and is completely refundable, but if you decide to keep working with us afterward, we’ll apply what you’ve already paid to the total costs of your custom plan.

How often should I monitor and review my eCommerce metrics?

Every business is different, but here are some best practices that work for many eCommerce stores:

• Daily Review: Monitor crucial metrics like sales and traffic daily for immediate insights and quick adjustments.
• Weekly and Monthly Review: Evaluate metrics like conversion rates, CAC, and AOV for trends and to assess marketing campaign effectiveness.
• Quarterly and Yearly Review: Analyze CLV, churn rate, and revenue growth rate for strategic planning and long-term goals.

What steps can I take to reduce my Customer Acquisition Cost (CAC)?

• Optimize Your Ad Spend: Regularly review advertising ROI and adjust spending on underperforming channels.
• Focus on Conversion Rates: Optimize landing pages and website UX to convert more visitors into customers.
• Enhance Organic Reach: Invest in SEO and content marketing to attract organic traffic.

How do personalized customer experiences lead to better customer retention?

Personalizing your customers’ experiences makes them feel special and makes it easier to convert them. Here are a few tactics to try:

• Tailored Communication: Send personalized messages and offers based on individual customer behaviour and preferences.
• Recommendation Engines: Use algorithms to recommend products that a customer is likely to purchase.
• Loyalty Programs: Offer personalized rewards and incentives to encourage repeat business.