Ecommerce Essentials: KPI Cheat Sheet
Top Metrics to Track for Year-Round Success
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Just as every master baker knows that the secret to that perfect loaf of bread lies in the precise mix of flour, yeast, and water, the secret to ecommerce success is no less specific—it hinges on a meticulous blend of key performance indicators (KPIs). In the bustling kitchen of online business, three main ingredients emerge as essentials: marketing, fulfillment, and customer experience.
Imagine your strategy as a recipe card, detailed and deliberate. Each category of performance metrics we explore here—sugar, spice, and everything nice—plays a pivotal role in the concoction:
Marketing KPIs are the sugar, sweetening the pot with insights into customer acquisition and engagement, making sure your brand’s presence is as delightful as it is pervasive.
Fulfillment KPIs are the spice, ensuring that every logistical element from inventory turnover to shipping efficiency adds zest to your operations, creating a seamless flow that satisfies customer cravings promptly.
Lastly, Customer Experience KPIs incorporate everything nice, the essential garnishes that turn satisfied shoppers into loyal patrons, fostering a base that returns, time and again, for the exceptional service they’ve come to expect.
This KPI Cheat Sheet will mix these elements into a rich, informative guide that will help you master this ecommerce essential to refine the recipe of your business success. Whether you’re kneading the dough of new strategies or proofing tried-and-true practices, understanding and applying the right KPIs will ensure that your business isn’t just baking bread—it’s crafting artisanal masterpieces tailored to the tastes of your target market.
So, let’s preheat our strategic ovens and get ready to bake up year-round success with every batch of data you measure!
The Why: Benefits of Establishing KPIs
There are several benefits to taking a data-centric approach to performance management and tracking your business performance trends over time:
Rate Your Performance
KPIs provide quantifiable metrics to evaluate the success or failure of all aspects of your business—from marketing to ecommerce order fulfillment & logistics to customer experience & behavior. Without clearly defined and monitored KPIs, it’s nearly impossible to gauge your business’s overall health—much less set goals or track progress against those goals.
Set Smarter Goals
KPIs provide benchmarks against which you can set realistic goals and track progress over time when incorporated into your annual business planning calendar. They help you stay focused on what matters most for your business growth now while also keeping you and your team motivated over the long run. Through a combination of short-term and long-term goals, everyone across your organization can balance immediate actions and future aspirations, ensuring steady progress toward overarching long-term success.
Let’s take a closer look at some key advantages of short- and long-term goals
Focus & Motivation
Short-term goals provide immediate targets to work towards, keeping you focused and motivated on current priorities.
Achievement Milestones
Short-term goals provide a sense of accomplishment and progress, boosting morale and confidence to keep your team on track to tackle bigger objectives.
Adaptability & Flexibility
Short-term goals are easier to adjust based on market changes or new information, allowing for more agile decision-making.
Feedback Loop
Setting short-term goals creates frequent feedback and evaluation opportunities for personal and business performance, helping you course-correct with agility and improve strategies in real time.
Kickstarts Momentum
Success in achieving short-term goals builds momentum and reinforces positive habits and behaviors, laying the foundation for achieving long-term objectives.
Clear Vision & Direction
Long-term goals provide a clear vision and direction for your efforts, guiding decision-making and prioritization.
Measurable Progress
Long-term goals help measure progress over extended periods, offering a comprehensive view of overall performance and success.
Consistency & Stability
Long-term goals promote stability by focusing on enduring success factors such as profitability, growth, and market positioning.
Strategic Planning
Setting long-term goals encourages strategic planning for objectives that may be harder to visualize in the short term, including resource allocation, talent development, and infrastructure investment.
Boosts Accountability
Long-term goals foster commitment to a vision and accountability for achieving milestones and objectives over time.
Make Informed Decisions
Data-driven decisions often are more effective than gut feelings. KPIs help identify trends, weaknesses, and opportunities, enabling you to make informed decisions to optimize your ecommerce business operations—especially for inventory management, demand forecasting, and financial planning. Even when you follow your gut instead of data trends and predictive analytics, at least you've considered what the data tells you.
The What: Key Metrics to Track
Top 10 Marketing KPIs
Measuring marketing KPIs is fundamental to driving continuous improvement in customer acquisition, engagement, and conversion in addition to evaluating your marketing tactics. Here are some essential marketing KPIs you should consider measuring:
|
Metric |
Description |
Impact |
| Customer Acquisition Cost (CAC) | Represents the total cost incurred to acquire a new customer, including marketing and sales expenses | Lowering CAC means acquiring new customers at a lower cost, which directly improves profitability and allows you to scale customer acquisition efforts more efficiently. This means you can acquire more customers within the same budget or allocate freed-up capital to other growth initiatives. |
| Website Traffic | Monitors the total number of visitors to your ecommerce website over time, including new and returning visitors | Higher website traffic means more people are becoming aware of your brand, products, and services—which equates to more opportunities for conversions and sales. |
| Traffic Sources | Sorts website traffic by how visitors land on your site into categories like direct traffic, referral traffic, social media, organic search, paid search, and email marketing | Knowing which traffic sources drive the most visitors and conversions, you can allocate your marketing budget more effectively and tailor your messaging for each source to better meet the needs and expectations of visitors. Also, it's better to drive traffic to owned channels like your own website versus marketplaces, which incur referral fees that cut into your profit margins. |
| Search Engine Rankings | Monitor keyword rankings and organic search traffic to assess the visibility and performance of your ecommerce website in search engine results pages (SERPs) | No one ever wants to come in last place, especially when low search engine rankings mean less brand recognition and fewer site visitors. Search engine optimization (SEO) strategies are crucial for improving organic search visibility, bringing more potential customers to your digital storefront. |
| Average Session Length | Tracks the average amount of time each visitor spends on your website (e.g., browsing products, reading content, or considering making a purchase) | Longer sessions are an indicator of user-friendliness and increased engagement, leading to a deeper understanding of your products and brand. Engaged visitors who spend more time on your site are more likely to convert into customers—especially for cross-selling and upselling. |
| Bounce Rate | Measures the percentage of visitors who navigate away from your website after viewing only one page | Higher bounce rates are a sign that your website isn’t engaging your audience. Because shoppers don't always find what they’re looking for on the first page they visit, you want to draw them in so they stick around and browse until they make a purchase. |
| Marketing Channel Performance | Evaluates the performance of different marketing channels and campaigns (e.g., paid advertising, social media, email marketing, content marketing, and affiliate marketing) | Knowing which marketing channels drive the most sales allows you to allocate resources effectively and optimize your marketing strategies—and budget—for maximum ROI. |
| Email Marketing Metrics | Track email marketing performance data like open rates, click-through rates, conversion rates, and unsubscribe rates | Our hot take: email marketing is underrated. Optimizing these metrics through effective strategies, like increasing personalization, is a low-cost way to engage subscribers and increase conversions. |
| Average Order Value (AOV) | Calculates the average amount spent by customers in a single transaction | Increasing AOV through cross-selling, upselling, or promotional strategies can boost revenue without spending more on CAC. Higher average order values typically result in improved profit margins since fixed costs, such as shipping and handling, are spread out over larger sales. |
| Conversion Rate | Measures percentage of website visitors who complete a desired action (e.g., purchases, newsletter sign-ups, downloads) | Since acquiring a customer involves costs, boosting your conversion rate allows you to spread those costs over more sales, thus increasing profit margins per transaction and improving the return on investment from your marketing efforts. In other words, you get more value from every dollar spent on driving traffic to your site. |
Top 10 Fulfillment KPIs
Fulfillment KPIs are essential for monitoring and optimizing the efficiency and effectiveness of your ecommerce business' supply chain and logistics operations. Whether you manage your own warehouse(s) or outsource your order fulfillment, here are some key fulfillment KPIs you should consider measuring:
|
Metric |
Description |
Impact |
| On-Time Delivery Rate | Represents the percentage of orders delivered to customers within the promised or expected delivery window | Tracking this and other carrier performance metrics—like transit time and damage/loss rates—allow you to gauge the reliability and consistency of your shipping operations and decide if you need to adjust your carrier mix. |
| Fulfillment Cost Per Order | Calculates the average fulfillment cost per order, including shipping costs (e.g., packaging, handling, labels, and carrier fees), pick fees, storage rates, and labor costs | Poor performance isn’t the only reason to rethink your carrier mix, shipping options, and/or fulfillment strategy. Knowing your fulfillment cost per order allows you to optimize your processes and minimize expenses. |
| Transportation Costs as a Percentage of Revenue | Measures the percentage of total revenue spent on transportation-related expenses | Building off your shipping costs, this metric looks at your transportation costs in a wider context that considers your business’s overall financial performance so you can decide where you need to cut costs and optimize your processes, like through shipping integrations. |
| Packages Shipped Per Order | Calculates the average number of packages shipped per order by dividing the total number of packages shipped by the total number of orders over a given period | Ideally, the number of packages shipped should be equal to the number of orders placed to minimize fulfillment, packaging, and shipping costs while also providing the best customer experience. |
| Inventory Turnover Ratio (ITR) | Determines how quickly inventory is sold and replenished over a specific period | Because inventory turnover reflects how quickly you sell an item, a high inventory turnover ratio indicates that you are managing your inventory, forecasting, and working capital efficiently. This is one of the most important metrics in the current market because slower turnover indicates you might be drowning in storage fees for products that aren't getting attention—in which case you should consider offloading them at a discount rather than let them sit on a shelf losing you money. |
| Inventory Accuracy Rate | Measures the percentage of inventory items that are accurately recorded and accounted for in your inventory management software | Inventory accuracy at the warehouse level is essential to providing a consistent customer experience. You don’t want to accidentally sell items you don’t have in stock because of errors and discrepancies in your inventory management. |
| Order Accuracy Rate | Represents the percentage of orders that are accurately picked, packed, and shipped without errors or discrepancies | Order accuracy is arguably the most important metric for understanding the effectiveness of your logistics operations as an ecommerce brand since inaccurate order fulfillment can damage your reputation and chip away at your bottom line with returns. Zendesk reports that 52% of consumers will look at a competing brand after a single negative experience, meaning every error in the fulfillment process—big or small—carries big consequences. |
| Order Fulfillment Cycle Time | Measures the average time it takes from when an order is placed to when it is shipped | Thanks to the Amazon Effect, customer expectations for how long it takes to receive a package are higher than ever. While most of the industry focuses on the need for faster shipping, your order management efficiency matters because the clock starts ticking when the order is placed—not when it ships. |
| Stockout/Backorder Rates | Monitors percentage of orders that cannot be fulfilled immediately or are unavailable for purchase due to stockouts or inventory shortages | Simply put, product unavailability means lost sales (and sometimes weakened customer loyalty). Keeping tabs on stockout and backorder rates can help you identify potential gaps in inventory management and demand forecasting to mitigate this risk. |
| Warehouse Capacity Utilization | Tracks the percentage of physical warehouse space utilized for storage and operations | Optimizing your warehousing space allocation not only helps you minimize storage costs but also allows you to improve operational efficiency with better resource utilization and organization, especially if you use advanced warehouse management system (WMS) software. |
Top 10 Customer Experience KPIs
Setting KPIs for customer experience (CX) is crucial for measuring the success of your ecommerce business in meeting customer needs and expectations. Here are some essential CX KPIs you might consider:
|
Metric |
Description |
Impact |
| Customer Satisfaction (CSAT)/Net Promoter Score (NPS) | Measures the overall satisfaction with your products, services, and support by regularly surveying customers after interactions or purchases | While product reviews are certainly useful, they may not paint an accurate picture of your brand (considering people usually only leave reviews if they are super happy or incredibly frustrated). These surveys allow you to understand the more typical customer experience. |
| Product Reviews/Customer Feedback | Highlights trends in customer satisfaction and dissatisfaction for both products and your customer service | Even if unsolicited product reviews and customer feedback aren’t the most accurate, they are essential for highlighting what you’re doing well vs. what needs improvement and opening a window into the public conversation about your products and/or brand. |
| Social Media Sentiment | Helps you understand and categorize consumer attitudes towards your brand (positive, negative, or neutral) from metrics such as likes, shares, comments, and follower growth across social media platforms | Going viral isn’t the only way to benefit from social media. Being able to look at a snapshot of public opinions about your brand gives insight into customer behavior as well as reactions to marketing campaigns, brand awareness, and social commerce experiences from potential customers. |
| Average Support Response Time | Monitors the average amount of time it takes for customer service or support teams to respond to customer inquiries, whether through email, live chat, or social media | An important reminder: people don’t contact customer support if they don’t have a problem. Frustrating customer service that takes too long to get an answer only makes a bad experience worse, which can destroy brand loyalty. |
| First Contact Resolution (FCR) Rate | Measures the percentage of customer inquiries or issues resolved on the first interaction with customer support | The only thing more aggravating to customers than waiting for customer service is having to reach out multiple times. A high FCR is critical for measuring your team’s efficiency and effectiveness in problem-solving. |
| Repeat Purchase Rate | Calculates the percentage of customers who return to make additional purchases | Growing your repeat purchase rate reflects satisfaction with your overall service, reliability, and product quality. |
| Customer Retention Rate | Represents the percentage of customers who make repeat purchases over a specified period | Customer retention rate builds off repeat purchase rate to indicate long-term brand loyalty. Personalized marketing based on individual user activity—tracked through your customer resource management (CRM) platform—is a tried-and-true method for increasing retention. |
| Customer Lifetime Value | Calculates the predicted revenue a customer will generate over their entire relationship with your business, considering factors such as repeat purchases and average retention period | Quantifying your CLV helps you not just set revenue goals but also set data-driven marketing budgets and targets. |
| Customer Churn Rate | Measures the percentage of customers who stop engaging with your brand or make no further purchases over a specific period | Increased customer churn rates can signal growing dissatisfaction or loss of interest from your customer base. |
| Product Return Rate | Monitors the percentage of products returned by customers and/or value of returned items vs. revenue from sales over a given period | Lowering your ecommerce returns can be a game-changer for profitability. High return rates can be costly due to shipping, restocking, handling fees, and damaged goods—not to mention they may indicate potential issues with product quality, item descriptions & listings, or fulfillment processes. |
The How: Putting Knowledge into Practice
Getting a grasp on the top ecommerce KPIs you should watch is one thing; knowing where to look for them—not to mention how to visualize and analyze them in a useful way—is another. Luckily, with the right software, finding the information you need doesn’t have to be a scavenger hunt.
Most of the metrics tied to your ecommerce site are readily available on website analytics platforms (e.g., Google Analytics or Adobe Analytics) or in dashboards within your ecommerce platforms (e.g., Shopify or Salesforce Commerce Cloud).
But you may be wondering, what about your logistics data?
With modern fulfillment software like Extensiv, tracking these KPIs is just as easy.
Extensiv’s reporting and analytics tools bring the entirety of your ecommerce operations into view so you can say goodbye to spreadsheets and time-consuming research. Our platform gives you clarity over supply levels, product sales, order trends, and total revenue across all sales channels—all in one dashboard. With full visibility, you can effortlessly find the insights you need to make data-driven decisions and set attainable growth goals.
While these KPIs are critical to understanding your business performance, this is just a starting point for your ecommerce metrics journey. Concentrating on key metrics that can give you an overview of your business is essential, and as time permits, expanding the metrics you track will maximize your business potential.
One thing’s certain: focusing on the data that matters will take you far, and we’re here to support you on your path to success. To learn more about Extensiv’s solutions for brands, request a demo today and join our newsletter for more content like this!
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