Frequent monitoring of metrics in business allows a deeper understanding of customers and quantifies important aspects of the business. Particularly in ecommerce (Electronic Commerce), measuring these indices is even more crucial as they assist businesses in assessing existing risks and opportunities in the market.

MEASURE ECOMMERCE: SALES

Gross Profit Ratio (GP)

Indicates how much profit is generated for every dollar of revenue.

Formula: Gross Profit Ratio (%) = Gross Profit / Revenue

Cost of Goods Sold (COGS)

The value of goods sold or consumed during a specific period.

Formula: Cost of Goods Sold = Beginning Inventory + Additional Purchases During the Period – Ending Inventory

Average Order Value (AOV)

The average amount a customer spends when shopping on an ecommerce website.

Formula: Average Order Value = Revenue / Number of Orders

Revenue Per Click (RPC)

Average revenue based on the conversion rate each time a customer visits an ecommerce website.

Formula: Revenue Per Click = Revenue / Number of Visits

Customer Lifetime Value (CLV)

The value a customer contributes to a company over their entire lifetime.

Formula: Customer Lifetime Value = (Transaction 1 + Transaction 2 + Transaction 3 + …Transaction n) x Average Profit Margin

Purchase Frequency

Indicates the average number of times a customer purchases within a specific period.

Formula: Purchase Frequency = Total Orders / Total Customers

Time Between Purchases (TBP)

Measures the time between consecutive purchases by a customer.

Formula: Time Between Purchases = Purchase Frequency / 365

Shopping Cart Abandonment Rate (CAR)

Measures the number of customers who added items to their cart but did not complete the purchase.

Formula: Cart Abandonment Rate = 1 – (Completed Transactions / Carts with Products) x 100

Cost of Acquiring Customer (CAC)

The cost associated with persuading consumers to purchase a company’s products or services.

Formula: Cost of Acquiring Customer = Total Cost / Number of New Customers

Repeat Purchase Rate (RPR)

Indicates the likelihood of customers returning to make a second or subsequent purchase.

Formula: Repeat Purchase Rate = Number of Repeat Purchases / Total Number of Purchases

MEASURE ECOMMERCE: MARKETING

Website Traffic

Refers to the total number of visits to an ecommerce website.

Traffic Source

Identifies the primary sources directing traffic to your website.

Time on Site (TOS)

Indicates the average time a visitor spends on the website.

Average Session Duration

The average time users spend in a single session.

Formula: Total Session Duration / Number of Sessions

Page per Visit

Measures the level of content engagement, indicating how deeply users explore information on the website.

Formula: Pages per Visit = Number of Pages Viewed / Visits

Bounce Rate

The percentage of single-page visits where visitors leave without clicking on any other content.

Formula: Bounce Rate = Total Bounces in a Period / Total Visits in that Period

Click Through Rate (CTR)

The rate at which customers view and click on a business’s advertisements.

Formula: Click Through Rate = Number of Clicks / Number of Impressions

Engagement Rate

Indicates the number of people who interacted with a company’s content through various ecommerce channels such as the business’s ecommerce website/app, ecommerce platforms, Facebook, Instagram, TikTok, etc.

Formula: Social Media Engagement = Number of Interactions / Number of Followers

Pay-Per-Click (PPC)

The Internet marketing model is where businesses pay a fee each time their ads are clicked.

Formula: Pay-Per-Click Cost = Advertising Cost / Number of Clicks

Conversion Rate (CR)

Measures the ratio of potential customers who become actual customers by making a purchase.

Formula: Conversion Rate = Number of Conversions / Total Ad Interactions