8 Ecommerce Performance Metrics That Matter Most for CRO

As an ecommerce brand, your business lives and breathes through data. This information is the lifeblood that provides you with invaluable insights into your customers, your website's performance, and ultimately, your revenue growth.

But let's be honest - making sense of all the ecommerce metrics can sometimes feel overwhelming. With so many data points to track and analyze, it's easy to get lost trying to figure out where to focus your efforts for maximum impact.

That's where conversion rate optimization (CRO) comes in. CRO is a proven, data-driven approach that helps you identify opportunities for improvement and test different strategies to see what resonates best with your audience and aligns with your specific business goals.

At SplitBase, we've worked with ecommerce brands of all sizes and verticals to help them boost the potential of their online stores through data-driven CRO. In the process, we've learned that not all metrics are created equal when it comes to driving meaningful growth.

In this comprehensive guide, we're sharing the 8 ecommerce performance metrics that matter most for CRO, along with actionable insights and real-world examples to help you turn these data points into impactful results for your business.

Separating Effective from Ineffective Performance Insights

Before we dive into the specific metrics, let's take a moment to talk about the difference between vanity metrics and actionable metrics.

‍Vanity metrics are the ones that might make your reports look good but don't actually tell you much about the health or growth of your business. Think things like:

• Number of website visitors
• Social media followers
• Email subscribers
• Bounce rate

While these metrics can give you a high-level view of your online presence, they don't necessarily correlate with the things that actually drive revenue and profitability.

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On the flip side, actionable metrics are the ones that are directly tied to your business goals and can guide your optimization efforts for maximum impact. These are the metrics that tell you:

• How effectively your website is converting visitors into customers
• How much revenue you're generating from each customer and transaction
• How well you're retaining customers over time
• Which marketing channels and campaigns are delivering the best ROI

By focusing on these actionable insights, you can make data-driven decisions that directly impact your bottom line.

8 Essential Ecommerce Performance Metrics

So, what are the 8 most important metrics for ecommerce CRO? 

Let's take a closer look at each one and how you can use them to optimize your online store for growth.

1. Conversion Rate

Conversion rate is the king of ecommerce metrics. It tells you what percentage of your website visitors are taking a desired action, such as making a purchase. The higher your conversion rate, the more revenue you're generating from your existing traffic.

To calculate your conversion rate, simply divide the number of conversions by the total number of visitors and multiply by 100. For example, if your store had 10,000 visitors last month and 200 of them made a purchase, your conversion rate would be 2%.

While conversion rates vary widely by industry and business model, a good benchmark to aim for is 2-3%. According to WordStream, the average conversion rate for ecommerce stores is 2.63%. However, top-performing stores can achieve rates of 5% or higher.

To improve your conversion rate, focus on optimizing your website's user experience, product descriptions, and checkout process. Make sure your value proposition is clear and compelling, and that your calls-to-action (CTAs) are prominent and persuasive.

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2. Average Order Value

While conversion rate tells you how many visitors are turning into customers, average order value (AOV) tells you how much each customer is spending per transaction. Increasing your AOV is a powerful way to grow your revenue without necessarily driving more traffic or conversions.

To calculate your AOV, simply divide your total revenue by the number of orders. For example, if your store generated $50,000 in revenue from 1,000 orders, your AOV would be $50.

There are several ways to increase your AOV, such as offering product bundles, upselling complementary items, and providing free shipping thresholds. You can also experiment with personalized product recommendations based on customer behavior and purchase history.

For example, skincare brand Kiehl's increased its AOV by 16% by implementing a "You May Also Like" feature that recommends complementary products based on what customers have in their cart.

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3. Customer Lifetime Value

Customer lifetime value (CLV) is a measure of how much revenue a customer generates for your business over the course of their relationship with you. It takes into account not just their initial purchase, but also their repeat purchases, average order value, and length of time as a customer.

To calculate CLV, you'll need to know your average order value, repeat purchase rate, and average customer lifespan. Then, simply multiply those three numbers together. For example, if your AOV is $100, your repeat purchase rate is 25%, and your average customer lifespan is 2 years, your CLV would be $50 ($100 x 0.25 x 2).

Increasing your CLV is all about building long-term relationships with your customers. This can involve things like creating loyalty programs, offering personalized experiences, and providing exceptional customer service.

‍100% Pure is a skin care and beauty brand with a very good reward system. Customers earn points by engaging on social media channels and writing reviews, redeemable for shopping on their site.

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4. Cart Abandonment Rate

Cart abandonment is a major challenge for ecommerce businesses. 

According to Baymard Institute, the average cart abandonment rate across industries is nearly 70%. That means that for every 100 potential customers who add an item to their cart, 70 of them will leave without completing their purchase!

To calculate your cart abandonment rate, divide the number of completed purchases by the number of carts created, subtract from 1, and multiply by 100. For example, if your store had 500 carts created last month but only 150 completed purchases, your cart abandonment rate would be 70%.

There are many reasons why customers might abandon their carts, such as unexpected shipping costs, complicated checkout processes, or simply getting distracted and forgetting to complete their purchase. To reduce cart abandonment, focus on creating a smooth and seamless checkout experience that minimizes friction and builds trust.

This can involve things like:

• Offering free shipping
• Providing multiple payment options
• Using trust signals like security badges and customer reviews. 

You can also use exit-intent pop-ups and retargeting ads to remind customers of items they left in their cart and encourage them to complete their purchase.

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5. Revenue Per Visitor

Revenue per visitor (RPV) is a metric that tells you how much revenue your store is generating for each unique visitor. It's a high-level measure of your website's overall effectiveness in converting traffic into sales.

To calculate RPV, simply divide your total revenue by the number of unique visitors. For example, if your store generated $100,000 in revenue from 50,000 unique visitors, your RPV would be $2.

Increasing your RPV involves a combination of driving high-quality traffic to your site and optimizing your website for conversions. This can involve things like improving your product descriptions and images, offering compelling promotions and discounts, and using personalized product recommendations to increase average order value.

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6. Add to Cart Rate

The add to cart rate is a crucial metric for ecommerce businesses as it indicates the percentage of visitors who are interested enough in a product to add it to their shopping cart. 

A high add to cart rate suggests that your product pages are effectively conveying the value of your products and enticing visitors to take the next step towards making a purchase.

To calculate your add to cart rate, divide the total number of add to cart actions by the total number of product page views and multiply by 100. For example, if your product pages generated 10,000 views last month and there were 1,000 add to cart actions, your add to cart rate would be 10%.

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7. Gross Margin

Gross margin is a measure of your business's profitability. It tells you how much revenue you're keeping after accounting for the cost of goods sold (COGS), which includes things like raw materials, manufacturing costs, and shipping expenses.

To calculate your gross margin, subtract your COGS from your total revenue, then divide by your total revenue and multiply by 100. For example, if your store generated $100,000 in revenue and your COGS was $60,000, your gross margin would be 40% (($100,000 - $60,000) / $100,000) x 100).

Improving your gross margin involves finding ways to reduce your COGS while maintaining or increasing your revenue. This can involve negotiating better prices with suppliers, streamlining your manufacturing processes, or introducing higher-margin products to your lineup.

8. Net Promoter Score

Net Promoter Score (NPS) is a metric that measures customer loyalty and satisfaction. It's based on a simple question: "On a scale of 0-10, how likely are you to recommend our company to a friend or colleague?"

Customers who give a score of 9 or 10 are considered "promoters" who are highly likely to recommend your brand to others. Those who give a score of 7 or 8 are considered "passives" who are satisfied but not necessarily loyal. And those who give a score of 0-6 are considered "detractors" who are unhappy with your brand and may actively discourage others from doing business with you.

To calculate your NPS, subtract the percentage of detractors from the percentage of promoters. For example, if 50% of your customers are promoters, 30% are passives, and 20% are detractors, your NPS would be 30 (50% - 20%).

A high NPS is a strong indicator of customer loyalty and can lead to increased word-of-mouth marketing, repeat purchases, and long-term growth. To improve your NPS, focus on delivering exceptional customer experiences at every touchpoint, from your website and product pages to your shipping and customer service.

5 Data-Driven Insights for Ecommerce Optimization

With the key metrics defined, let's see how you can extract actionable insights to optimize your ecommerce store:

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1. Identify your top-converting traffic sources and double down on what's working. Analyze metrics like conversion rate and RPV by channel to determine where to focus your acquisition efforts.

2. Segment your customers based on behavior (e.g., one-time vs. repeat purchasers, high AOV vs. low AOV) to identify your most valuable customers and tailor your marketing and retention strategies accordingly.

3. Pinpoint the biggest drop-off points in your conversion funnel by analyzing metrics like cart abandonment rate and checkout completion rate. Focus your optimization efforts on these areas for maximum impact.

4. Continuously A/B test elements of your product pages (descriptions, images, CTAs) and measure impact on metrics like conversion rate and AOV to iteratively improve performance.

5. Use metrics like gross margin to evaluate your product mix and pricing strategy. Double down on your most profitable products and consider raising prices on high-demand items.

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How to Measure What Matters for Sustainable Ecommerce Growth

With so many metrics to track, it's essential to have a framework for measuring what matters most for your ecommerce business. Here's a simple process you can follow:

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• Set clear, measurable goals: Start by defining specific, time-bound goals for your key metrics. For example, "Increase conversion rate from 1.5% to 2.5% in Q3."
• Identify your northstar metric: Choose the one metric that best encapsulates your overarching business goal. This will serve as your guiding light and help you prioritize your efforts.
• Determine your leading indicators: Identify the metrics that are predictive of your northstar metric. For instance, if your northstar is CLV, leading indicators could be AOV and repeat purchase rate.
• Establish a measurement cadence: Decide how frequently you'll report on each metric. Some, like conversion rate, might be daily, while others, like NPS, might be quarterly.
• Assign ownership: Determine who on your team is responsible for tracking, reporting on, and improving each metric. This creates accountability and ensures metrics don't slip through the cracks.
• Take action: Regularly review your metrics and use them to inform your strategies and optimizations. Remember, measurement is only useful if it leads to action and improvement.

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Testing: The Key to Continuous Improvement

Measurement is just the beginning. To truly optimize your ecommerce store, you need to continuously test and experiment.

‍A/B testing, in particular, is a powerful and very important tool for ecommerce CRO. It allows you to compare two versions of a page or element to see which one performs better. 

Some high-impact areas to A/B test include:

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• Product page elements (descriptions, images, CTAs)
• Checkout flow (number of steps, form fields, payment options)
• Email subject lines and content
• Landing page headlines and copy

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To get started with A/B testing, follow these steps:

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1. Form a hypothesis: Based on your data and insights, make an educated guess about what change will improve a specific metric. For example, "Adding urgency messaging to the product page will increase conversion rate."

2. Set up your test: Using an A/B testing tool like Google Optimize or VWO, create your control (original) and variation (new version). Decide what metric you'll use to determine the winner.

3. Run your test: Launch your test and let it run until you've reached statistical significance. This means you can be confident that the results are due to the change you made and not random chance.

4. Analyze the results: Once your test is complete, analyze the results to see which version performed better. If your variation won, implement the change permanently.

5. Iterate: Use your learnings to inform your next hypothesis and test. Continuous testing is key to ongoing optimization and growth.

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Remember, not every test will be a winner. But even failed tests provide valuable learnings that can inform future experiments. The key is to always be testing and iterating based on data.

Turn Insights into Growth 

Data is the foundation for building a thriving ecommerce business. By zeroing in on the right metrics, you can make smart moves that leave your competition wondering what hit them.

The 8 metrics we've covered - conversion rate, AOV, CLV, cart abandonment rate, RPV, email opt-in rate, gross profit margin, and NPS - provide a comprehensive view of your ecommerce performance. By tracking and optimizing these metrics, you can make data-driven decisions that improve the customer experience and boost your bottom line.

But, metrics are only the first brick in the foundation. To genuinely put data to work, you must routinely distill practical findings and apply them to your experiments and enhancements. Foster a culture of ongoing experimentation and refinement to maintain your edge and fuel sustainable growth.

Of course, this is easier said than done. Ecommerce CRO is a complex, ever-evolving field, and it can be challenging to know where to start or how to prioritize your efforts. 

That's where a partner like SplitBase comes in.

SplitBase is all about helping ecommerce businesses make the most of their data to achieve success. Our team of CRO professionals is ready to assist you with:

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• Identify your most important metrics and set up proper tracking and measurement
• Analyze your data to uncover actionable insights and optimization opportunities
• Develop and execute a customized testing roadmap to improve your key metrics
• Implement winning tests and continuously iterate for ongoing growth

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Whether you want to skyrocket your conversion rate, supercharge your AOV, or keep your customers coming back for more, we've got the know-how to make it happen.

Want to boost your ecommerce store's performance? Get in touch with us, and let's talk about how we can leverage your insights for remarkable growth!