Many of us first encountered metrics while playing a life-and-death computer game: The Oregon Trail.


This was serious business. While traveling the trail, you had to pay close attention to:

  • Food – Are rations running low?
  • Health – Watch out for that typhoid!
  • Miles Traveled – Oh no, not another river crossing up ahead…

Having such certainty around which metrics to track sounds enviable. You know that to grow your business, you need to pay attention to your data… but to what, exactly? Well, circle the wagons for a minute and let’s work this out. In this post, we’ll give you the intro level, baseline metrics for when you’re first starting out, and then chart a course towards adding more complex metrics as your business grows and you expand your capacity.

Intro Level

There are three basic growth levers in any ecommerce business: get new customers, get customers to spend more per visit, and get existing customers to buy again. Even if all you’re working with is a spreadsheet, you should be tracking baseline metrics for these areas as frequently as you can—ideally every day. They’ll give you a good sense of where your company stands, and help you identify problems as they occur.

The following metrics help you measure new customers and how much they’re spending per visit:

  • Revenue: How much revenue did you bring in this month? This week? Today?
  • Total Orders: How many orders did you fill?
  • New Customers: How many new customers did you acquire?
  • Visitors: How many unique visits did your site get?

With these four basic metrics you can do some simple calculations that will provide additional insight on your business:

  • Average order value: There are quick wins that any ecommerce store can take to grow revenue by boosting average order value.


  • Site conversion rate: Again, this metric can reveal some quick wins. If your site conversion rate is low compared to your performance in the past, this might be a sign that your biggest wins will come not from getting more people to your website, but by optimizing your site for conversions.


To start gaining insight on how to get existing customers to buy again, track the following metric:

  • Revenue from repeat purchases: Unless you’re selling mattresses or other infrequent purchases, getting customers to buy a second, third, and fourth time will be a massive growth driver. Even in the early days of your business, you should know how good you are at getting customers to come back.

Intermediate Level

At the next level you’ll want to get a bit more granular in understanding what is and isn’t working. For nearly every ecommerce business, this starts with optimizing marketing spend. There are two key metrics you want to track here:

  • Customer Lifetime Value (CLV): At its most basic, CLV, or Lifetime Value (LTV), is a measure of what a customer is worth. It’s the total net profit your business makes from any given customer. You can learn more about CLV here.
  • CAC (Cost of User Acquisition): CAC is how much you’re spending to acquire a customer.

Combining these two numbers gives you a critical marketing metric:

  • Marketing ROI: You’re spending lots of money on marketing, and you need to know if it’s worth it. Which channels are getting you the customers you want? Calculating your marketing ROI using LTV will show you how valuable your customers are.

If you’re not looking at quality of customers you’re acquiring, you may end up spending a lot of money on seemingly “successful” channels or campaigns that aren’t going to help you build the customer base you want in the long run.

Outside of marketing, there are three other areas of your business you’ll want to watch for improvement opportunities. These aren’t reports you need to run every week (though it couldn’t hurt), but you absolutely want to keep tabs on the direction of the trend.

  • Top-Selling Products: At this level, you have the capacity to break down your revenue by product. When you know what your top-selling products are, you can start thinking of ways to optimize them, particularly around the holidays.
  • Returns, By Product and Reason: Once you’re looking at your returned revenue, the next step is to break it down by which products are most often returned, and the reasons why. This will help you stay on top of any production or customer service issues.
  • User to Customer Conversion: You may have a portion of customers who set up accounts or otherwise engage with your website, but do not become customers. This pool of email addresses represents a huge growth opportunity.

Advanced Level

At the advanced level, you’ll be doing two things:

  1. Adding additional nuance to your analysis
  2. Analyzing new parts of your business

Adding additional nuance to your analysis

At this point, it’s time to start adding new inputs into existing analysis. For example, if you’re only calculating marketing ROI based on first purchase, you’ll want to start calculating this metric using CLV. You’ll also want to start thinking about how to build attribution models that more accurately reveal marketing effectiveness.

Another thing you can do is continue breaking your metrics down to new levels of actionability. One way to do this, called cohort analysis, is to look at the behavior of specific customer groups over time. How are the customers you acquired a year ago behaving? Is their AOV or repeat purchase probability changing? How does that group compare to the customers you acquired two months ago? You can look a variety of metrics over time and across populations for a greater understanding of customer behavior.

Analyzing new parts of your business

In addition to improving analyses, you also want to start looking at net new parts of your business. For example, taking a deeper look at things like your email marketing, Net Promoter Score (NPS), customer loyalty programs, and customer support can reveal valuable insights about your business. The possibilities are truly endless, and the more granular you get, the more you’ll be able to fine-tune your efforts.

Next Steps

Once you’ve identified the metrics you want to track for your business now, you will be able to keep a close eye on the most critical parts of your business. The next step is to start thinking about what you will do if you see something start to take a turn for the worse. Will you be ready if caulking your wagon didn’t do the trick at that river crossing? The next post in this series covers how to make sure that you’re fully prepared, with a solid troubleshooting plan. Stay tuned!

Image credit: MacLife