Key metrics that every eCommerce needs to analyze

If you have an eCommerce, you will be interested in measuring the performance of your business with strategic KPIs. Discover the key metrics that every eCommerce needs to analyze.

You often wonder how much does it cost me on average to get a new customer? how many people are coming to my website? are customers leaving items in the shopping cart? We have good news for you! You can answer these and many more questions by monitoring your eCommerce metrics and KPIs.

In the context of eCommerce, metrics and Key Performance Indicators (KPIs) are fundamental tools that help measure the performance and success of your business.

Each business may differ in which metrics and KPIs to use, depending on their objectives and priorities: Do you want to improve your profitability? do you want to make yourself known to your target audience? or do you want to focus on improving the user experience? However, they all share a single purpose: to provide a quantifiable measure of performance, so you can make informed decisions that will drive the growth of your eCommerce.

In this article, you will discover the difference between a metric and a KPI and explore the key metrics that every eCommerce needs to analyze to boost its success and achieve its goals.

What is a Metric

A metric is a quantifiable measure that allows you to measure performance and obtain objective information about various areas of your eCommerce. These metrics are obtained through data analysis and offer valuable information about different aspects, such as visitor behavior, the effectiveness of marketing strategies and the profitability of operations.

Metrics can be classified into the following four categories:

Metrics to measure sales performance, such as Pipeline Coverage, Conversion Rate, Monthly Growth, Customer Acquisition Cost (CAC), Average Purchase Ticket, Customer Churn Rate, Shopping Cart Abandonment Rate, Customer Retention Rate, Sales Rate per Salesperson, Sales Cycle or Time to Conversion.
Financial metrics, such as Gross Profit Margin, Net Profit Margin, Working Capital Requirement, Quick Ratio, Leverage, Debt Ratio, Liquidity Ratio, Inventory Turnover, Total Asset Turnover, Return on Equity (ROE), Return on Assets (ROA), and Cash Conversion Cycle.
Marketing and advertising metrics, such as Cost per Acquisition (CPA), Customer Acquisition Cost (CAC), Website Traffic, Cost-per-Click (CPC), Bounce Rate, Average Session duration, Click Through Rate (CTR), Return on Investment (ROI), Return on Ad Spent (ROAS) and Email Opt-in-Rate.
Customer-service related metrics, such as Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), Refund and Return Rates, and customer response time.

What is a Key Performance Indicator (KPI)

KPIs (Key Performance Indicators) are key quantitative metrics that provide a clear view of how your business is performing and are directly related to one of your specific objectives. They allow you to evaluate progress toward that objective, and thus identify areas for improvement and make data-backed decisions.

Let's look at the following example for a better understanding of the concept. If your goal, as an eCommerce owner, is to increase sales, an important KPI is the conversion rate, which is the proportion of visitors to your website who make a purchase. This specific KPI focuses on the stated objective and provides a quantitative measure of success in terms of conversions. Therefore, if you notice that the conversion rate is falling, you will know that you need to take steps to improve it and reach your goal of increasing sales.

What is the difference between eCommerce metrics and KPIs

When it comes to measuring and evaluating the performance of an online business, it is critical to understand the difference between metrics and KPIs. Although they are often used interchangeably as both are used to quantify and track the performance of your eCommerce, they are not the same. What is the difference between an eCommerce metric and eCommerce KPIs?

While metrics are general measures that provide broad information about the performance of an eCommerce, KPIs, on the other hand, are indicators that are strategically selected to evaluate progress towards defined business objectives. Therefore, the main difference between metrics and KPIs is that the latter are directly linked to established goals. In short, all KPIs are metrics, but not all metrics are necessarily KPIs.

Now that you know the difference between metrics and KPIs, you can use these tools effectively to make data-backed decisions and drive the success and growth of your eCommerce.

How often should I compare my eCommerce metrics

The frequency with which you should analyze your eCommerce metrics is not the same for all of them. It is advisable to review some of them more frequently than others.

While some metrics will provide relevant information about the health of your company on a weekly basis, there will be others that should be analyzed at the end of each quarter, as they provide a more strategic and long-term orientation.

Here is a guide to important eCommerce metrics and how often they should be analyzed:

Weekly metrics: Weekly metrics are those that should be analyzed weekly to check that the state of your business is healthy, such as web traffic, social media engagement, or impressions.
Bi-weekly metrics: Bi-weekly or bi-weekly metrics are those that are less influenced by the variations that can occur weekly, and therefore can be analyzed every two weeks, such as Customer Acquisition Cost (CAC) or Average Order Value (AOV).
Monthly metrics: Monthly metrics are those that require a longer period to be analyzed accurately, such as Email open rate and Shopping Cart Abandonment Rate.
Quarterly metrics: Quarterly metrics allow you to measure the effectiveness of your business in the medium and long term, such as Customer Lifetime Value or Subscription Rate.

Sales KPIs

KPIs applied to sales strategy are essential instruments for measuring and analyzing the success of your eCommerce in terms of your commercial activities. In other words, these indicators provide an objective and quantifiable view of the overall sales performance of your business.

Although the selection of these KPIs may vary according to the specific objectives of each business, they all provide accurate measurement in the area of sales. When it comes to implementing an effective sales strategy, these indicators play a critical role in providing a measurable guide to success.

As KPIs allow your eCommerce to evaluate the impact of sales strategies, this helps to make data-backed decisions, and thus make the necessary changes to optimize sales efforts and maximize results.

These indicators include pipeline coverage, conversion rate, monthly growth, shopping cart abandonment rate, customer acquisition cost (CAC), customer retention rate, customer churn rate, and average purchase ticket, sales rate per person, or sales cycle, among others.

Financial KPIs

Financial KPIs are indicators that make it possible to measure and evaluate the financial performance of the eCommerce activity in terms of profit, revenue or expenses. These metrics are related to the financial aspect of your business and provide objective and quantifiable information about the financial health of your eCommerce.

Financial KPIs belong to several categories: profitability, liquidity, solvency, efficiency and valuation. Thanks to them, you can analyze the financial results of your eCommerce, and thus, take the necessary measures to achieve the strategic objectives of your business.

The most important financial KPIs are gross profit margin, net profit margin, working capital requirement, quick ratio (also known as acid test), leverage, debt ratio, liquidity ratio, inventory turnover, total asset turnover, Return on Equity (ROE), Return on Assets (ROA), and cash conversion cycle.

Marketing and advertising KPIs

Marketing and advertising KPIs are metrics that allow you to measure and analyze the results of your marketing strategies in relation to previously set objectives. These indicators provide an objective view of the performance and success of marketing and advertising campaigns, in order to make data-driven decisions and optimize marketing investments.

It is advisable to select the right KPIs to evaluate whether your marketing and advertising strategies are progressing towards the expected goals, and if not, to take the appropriate measures to achieve them.

The most important marketing and advertising KPIs are return on investment (ROI), conversion rate, cost of customer acquisition (CAC), cost per click (CPC), bounce rate, cost per acquisition (CPA), sales growth, keyword positioning, cost per lead, and click through rate (CTR).

Customer Service KPIs

Customer service KPIs are indicators that measure and evaluate the quality of customer service provided by your eCommerce. These tools provide essential information about customer satisfaction and experience, as well as service efficiency.

As with the previous KPIs, you can select which of them are most relevant to your specific objectives. These indicators allow you to analyze the results and identify possible areas for improvement in your customer service and take the necessary measures to provide a positive experience for your customers.

Customer Service KPIs can be divided into:

Customer Care operational KPIs: These indicators measure the efficiency of the Customer Care team, i.e. they evaluate the ability to handle all queries in the shortest possible time and with the highest quality. The most important within this first group are First Response Time (FRT), Mean Time to Resolution (MTTR), First Contact Resolution Rate (FCRR) and accessibility.
KPIs related to customer experience: These indicators evaluate the quality of the customer experience that your eCommerce is offering. In other words, they measure customer satisfaction in terms of whether expectations related to speed, flexibility, transparency, personalization of service and loyalty are met. Within this second group, the most relevant are Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), Customer Churn rate.

How RITMO Insights can help you analyze your eCommerce metrics

If you want to monitor your KPIs in real time, we recommend you try RITMO Insights, the platform specifically designed to help you analyze and maximize your eCommerce performance. With this simple and powerful tool, you will be able to connect your accounts, which will take you no more than 5 minutes, and access a wide range of sales, financial, marketing and customer service metrics, and best of all, it's completely free!

Once your accounts are connected, RITMO Insights will provide you with a complete and detailed view of all your key metrics, such as conversion rate, cost per lead or cost per click, among others. You will be able to visualize all this data in clear reports that will allow you to identify areas of improvement to maximize the performance of your eCommerce.

Don't miss the opportunity to optimize your eCommerce performance and discover the power of data today with RITMO Insights!