The Top Ecommerce Business KPIs to Track

By DeBlanc + Murphy
December 20, 2022

Every business needs a detailed roadmap and a way to monitor progress to succeed. KPIs can provide the latter, allowing you to hold yourself and your team accountable and forecast the success of your business endeavors.

Here are some of the top ecommerce business KPIs to track if you own an online business.

What Are Ecommerce KPIs?

“KPI” stands for “Key Performance Indicators.” These are tools that help you measure your company’s progress. There are KPIs for almost everything you could think of, including sales, customer support, marketing, and other core functions.

What Are the Top Ecommerce Business KPIs to Track?

Some of the top ecommerce business KPIs to track include:

ROAS — Return on Ad Spend

Return on ad spend is a KPI that allows you to measure how much you spend and make back on your advertising campaigns.

This is a critical indicator to track, as it allows you to determine whether you’re seeing a return on your investment or just hemorrhaging money. ROAS is calculated by dividing the total revenue generated by an ad by how much you spent on it to get a return ratio.

Here’s a simple example: say you’ve determined that a recent ad campaign generated $10,000 in revenue, and you spent $5,000 on the campaign. In this case, 10,000 divided by 5,000 equal 2, meaning your ROAS KPI is 2:1, or 200%.

CAC — Customer Acquisition Cost

Customer acquisition cost is a KPI that measures how much you spend acquiring a new customer.

To determine your CAC, divide one month’s total sales (including expenses like marketing) by the quantity of that month’s new customers. Whatever number you get is your CAC.

Your CAC goes hand in hand with your CLV or customer lifetime value.

CLV — Customer Lifetime Value

CLV analyzes the amount a customer spends on your products or services throughout your relationship.

To determine this KPI, multiply your average order value and purchase frequency. Then, multiply that number by the average customer lifetime length. The number generated represents your customer's lifetime value.

CLV and CAC are essential because if your CAC is equal to or greater than your CLV, your business is in trouble.

Email Sign-Up Conversion

The email sign-up conversion rate KPI tells you how many website visitors are opting into your company sales funnel via the email list. Although social media popularity has been rising for several years, email is still a tried-and-true method of generating ecommerce revenue.

Looking at your email sign-up conversion rates can help you determine whether you need to beef up your email flows or decrease the number of messages you send to customers.

Need Help Tracking KPIs?

These are just a handful of the many KPIs you should consider tracking for business success. If you need help understanding company KPIs, interpreting data, or determining how to pivot accordingly, don’t hesitate to contact the experienced team at DeBlanc and Murphy.

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