How To Measure Ecommerce Success
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- Revenue: The total amount of money generated by the business through sales.
- Gross margin: The difference between revenue and cost of goods sold (COGS), expressed as a percentage of revenue.
- Customer acquisition cost (CAC): The cost of acquiring a new customer, including marketing and advertising expenses.
- Lifetime value (LTV) of a customer: The total amount of money a customer is expected to spend on the business over the course of their lifetime.
- Conversion rate: The percentage of visitors to the website who make a purchase.
- Average order value (AOV): The average dollar amount of each order placed on the website.
- Return on investment (ROI): The return on investment of a marketing campaign.
- Net Promoter Score (NPS): A customer loyalty metric that measures how likely customers are to recommend a business to others.
- Customer retention rate: The percentage of customers who continue to purchase from the business over time.
- Traffic: The number of visitors to the website.
By regularly tracking these metrics, businesses can gain insight into the health of their ecommerce operation and make data-driven decisions to improve their performance.