Top KPIs to Measure The Success of Your Online Store

Measuring the success of your online store using KPIs can seem like the easiest thing to do – until you encounter the sheer multitude of metrics available. At this point, you’re left with the dilemma of which figures to zone in on, what the numbers tell you about your business, and what to do about it.

To put it short, finding out how well your store is doing based on a few metrics is not as seamless as it sounds. 

Through this post, we intend to walk you through which KPIs are relevant for your store, how to read them, and what steps you can take if your performance is falling short.

KPIs that are not relevant

Most marketers get misled about which KPIs actually mean something for their business. If you’re focused primarily on online selling, several key stages precede a sale. Discovery is the foremost of them. 

Impressions, Reach, and Engagement are a few metrics that give you an idea of how visible, popular, and sought your product is. But it is hardly an indicator of where your business stands. So let’s rule them out for now.

Simply put, impressions are the number of times your ad or content is presented to the audience. It indicates the number of people who came across your campaign. Those impressions can occur via paid ads on third-party sites, search results, social platforms, etc.

It’s important to remember that an impression does not necessarily equate to a click or a conversion. Your impressions will be available from any platform you’re sharing content — Google paid ads, Facebook or Instagram, as well as third-party platforms.

What you really should be concerned with are the KPIs that help you measure progress. Acquisition metrics and ROI indicators fall under this category of relevance.

Social media engagement.

Social media metrics such as likes, shares, reposts, retweets, and comments, are usually only useful to identify the level of popularity and online presence that your brand has.

In terms of actual sales and revenue, your P/L statement and Balance sheet might tell an entirely different story. It would be best to not get caught up on social media numbers and overlook the bigger picture – your actual business performance.

Top KPIs to track:

  1. Email click-throughs

The Email click-through rate helps you identify how many of your subscribers clicked on the link you sent them and visited the landing page as you hoped they would. How does this help? It gives you an idea of how positive your email campaigns are in getting customers interested. As far as the discovery phase goes, it is a significant win. But it hardly tells you anything about sales. 

In other words, the click-through rate is meaningless when viewed in isolation from another very important metric: conversions. Find out how many of those who clicked on the link and visited the landing page became a customer. This gives you a better measure of how successful your campaigns are.


Don’t be disheartened if your email conversions are staggeringly low. Persuading customers through email takes time and is an appropriately valuable proposition. Finding out how many of your site visitors have opted in to provide their email details is easily done. The difficult part is raising those numbers.

  1. Cost per acquisition (CPA) 

Bear in mind that to get a useful measure of acquisition costs, you also need to calculate your average order value. With that being said, finding your CPA is pretty simple.

Let’s say you’re launching an email campaign. Get an estimate on how much you’re spending on it. Then find out how many conversions you’ve gotten out of it. Divide the total amount you spent on the campaign by the number of customers you’ve acquired as.  You’ll end up with a rough figure showing you how much it cost to acquire each customer. But this isn’t enough.

What you need to do next is find out what your average order value is. In other words, how much are those converted customers spending at your store? If the average order value is too low, in fact, lower than your CPA, then your campaigns are probably not worth it.  How come? 

Because this can only mean that you’re spending way more on acquiring low-value customers (who spend way less on your store).

So far what we’ve talked about is measuring acquisition traffic that comes into your store’s site through your social media and email channels. While organic traffic is invaluable, it is difficult to pinpoint what drives and attracts your leads to the website based on this data alone. This is why when you analyze acquisition, it is better to stick to variables that are directly under your control. 


Calculating CPA may seem very straightforward at first. After all, how hard can it be to measure your overall marketing costs vs the customers you’ve acquired through them? Turns out, the difficulty lies in deciding which costs to include.

In some online businesses, sales, and marketing are seen as separate activities. The combined cost of these two departments can seem extremely high to justify how much you’re spending on customer acquisition.

  1. Average Order Value (AOV)

AOV indicates the total value of orders divided by the total number of customers. It clues you in on the average price point for the majority of your products. It doesn’t mean that you can’t sell below or above the AOV rate. The point is to make sure you’re attracting a certain type of customer and building a type of brand where spending that much of an AOV becomes the norm. 

Eg: Brands like Amazon have an AOV of at least $100. This means that an average customer is likely to spend at least $100. It becomes significant when you view it alongside how much you’re spending in acquisition costs. If your marketing budget is $1000 and you’re only able to attract 3-4 customers with an AOV of $10-20, it can be a sign that you should either rethink your products, pricing, or advertising approach.

In short, we’d rank AOV (Average Order Value) and CAC (Customer Acquisition Costs) as two of the most important KPIs to track regularly, especially because it affects your decision-making. Both these metrics help you make a call on matters such as:

  • Should you continue that email campaign or not?
  • Should you change the product pricing?
  • Should you remove low-value products from your store?
  1. Cart abandonment

We’ve covered a few email tactics that can help you recover abandoned cart shoppers. The value of this KPI cannot be overstated. A complete lack of conversions or click-throughs can mean that your campaign, brand, or proposition isn’t as attractive as it should be.

On the other hand, cart abandonment rates can indicate something far more crucial. From pricing to checkout process design, there are a few key reasons why a shopper who actively spent time at your store and added items to his cart, would then choose to walk away without making a purchase. 

The good news is that pricing, checkout process, payment method, site speed, etc. are all things you can improve on. This is why cart abandonment rates should be one of your go-to KPIs when it comes to storing performance. 

  1. Checkout page abandonment

You can also narrow it down even further to checkout abandonment rates. Once a customer initiates a purchase, only to drop out of it eventually, it goes to show that there could be something wrong with the pricing or the process. Either way, while it is not unusual for customers to have second thoughts about a purchase, it is still unlikely for them to back out at the last minute unless they encounter something that forces them to change their minds. Your job is now to find out what that is.

  1. Conversion rates – enable cross-device tracking for higher accuracy

A key point to note when you measure sales conversion rates: make sure you have a customer profiling strategy in place. This way, you should be able to single out a single customer who’s engaging in multiple sessions across many devices, without erroneously counting each session as a separate customer.

The same shopper who visits your website 3 times and finally makes a purchase during his 4th session only counts as one sale. In this example, if you’re still relying on outdated methods of measuring conversions, the sales rate would come around to one successful conversion for every 4 sessions. This does affect the way you perceive your business’s growth potential and actual demand.

  1. Customer Retention and Longevity

Converting casual shoppers and curious visitors into customers is great. It is what keeps your business moving. But don’t forget about the importance of rewarding loyalty and identifying long-time customers. 

A committed customer who’s been buying from you for years is less likely to switch stores, unlike a newbie who is more open to trying different brands. Although retaining an existing customer may seem like hard work, it is much easier on your budget than acquiring a multitude of on-the-fence customers.

Measuring retention

The way to measure this is pretty simple. Find out how many of your existing customers are still actively buying from your store over a determined period. This could be anything from a year to two years up to five. There are two key aspects to this that you need to focus on:

  • How long have your most loyal customers been purchasing from your store?
  • What percentage of your customers do these loyal shoppers make up?

If you have a significant share of customers who’ve been shopping at your store for a long time, then it points to a great customer relationship. 

Let’s say 30% of those who shop from your online T-shirt store are old customers. 10% of them have been buying from you for as long as 3 years, and the remaining 20% have been loyal to your brand for at least a year. These are great results.


Customer retention is more relevant for online retailers where the business model is delivering products that require repeat purchases. Eg: Electronics stores, groceries, food, etc. The goods delivered need to be replenished eventually. So finding out which customers chose to shop again from your store can be a great way to assess how well you’re serving them

  1. Customer Lifetime Value (LTV)

Customer lifetime value is yet another metric that is more future-centric. It helps you gain a rough estimate of the average revenue each customer brings to your business, and based on that, you can assess how well your brand fits into the market.

How to calculate your CLTV?

Finding out your Customer’s Lifetime Value is easy. Once you’ve settled on the AOV, multiply it by the number of purchases your customer has made, and then by the set period that they’ve been your customer (in years or months).

Let’s give you an example to make things simpler:

You own an online sports store. The customer’s average order value is $100. Meaning the average amount they spend on each purchase is at least $100. 

Let’s say that Matt is a customer who’s made 10 purchases in one year. You’re expecting him to purchase from your store for at least 3 more years.

His CLTV would come around to ($100 X 10) X 3 = $3000.

Now, this isn’t exactly a precise forecast. It’s more of a non-conservative estimate. Being optimistic, Matt might stick around for at least a few more years although his monthly purchases and AOV may vary over time.

But let’s get to the real reason why we do this little exercise. If it costs you less than $1000 in marketing campaigns to acquire Matt as a customer, then it’s still presumably a win since he brings revenue of 3x times your business over time. But if your acquisition costs are nearing $2500, then you’re now in dangerous territory. The value that Matt brings to your business is around $500 now, that too for 3 years, which is in itself uncertain.

The trick is to find ways to acquire customers like Matt through an acquisition strategy that doesn’t cost as much or to increase their AOV. The former is more reasonable. The latter is a lot more difficult to achieve and depends entirely on the quality of your offerings.

  1. Balancing your refund rates

Generating a high turnover doesn’t mean anything if you don’t get to keep it. Find out what your average refund rate is every month. If you’re losing a lot of money in returned products, then you might have to rethink a couple of things:

A. Change your return strategy. Allowing customers to drop the product at the outlet closest to them can save you the pick-up cost.

B. Find out which products are returned the most, so that you can decide whether they’re worth selling, or if there’s something you can do to fix a commonly recurring problem with the item. You need customer feedback for this to work.

C. A return policy can convince customers to buy products on impulse. However, you can also benefit from understanding what drives customer satisfaction, so that you can keep return rates minimal.

  1. Churn rate

The churn rate and retention rate are two sides of the same coin. One measures your ability to retain customers, the other helps you understand the rate at which customers are abandoning your store.

The churn rate is calculated by finding what percentage of your acquired customers you’ve lost. The higher this number is, the more likely it is that there is something about your store that either doesn’t appeal to them.

  1. Return On Ad Spend (ROAS)

ROAS (Return on Ad Spend) may be useful to determine whether or not you should continue a particular campaign. It compares your revenue from each campaign with the cost you’ve incurred to run that particular campaign. While it does help you assess whether or not the ads you run are profitable, it is a lot more difficult to pinpoint what exactly works. This requires a KPI that’s more granular and precise.

Eg: You run a dropshipping business selling low-price impulse-buy products. The alluring factor is high here. It is also the perfect venture to launch a PPC pipeline, as well as a few Facebook and Google ads campaigns. All you’d need to do is contrast your ad spend with the revenue you generated from conversions you got out of this pipeline.


A few things you can take away from what we’ve covered so far:

  1. Tracking KPIs is not optional. It’s necessary to measure growth and specifically address where your strategies are lacking.
  1. Only some metrics are relevant to your business. It is better to not get misled by fancy technical figures that don’t matter as far as progress is concerned.
  1. Some KPIs only make sense when you view them alongside their complementary metrics. Eg: CPA and AOV.
  1. Always follow the money. In other words, refer to your balance sheet and your bottom line to see where you’re headed. ROIs aren’t measured in likes and shares but in actual sales and conversions.

Having said that, feel free to let us know which KPIs you frequently check when you attempt to analyze your store’s performance.

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