Keeping an eye on six, high-priority KPIs gives you a clear snapshot of business performance. It’s a bit like piloting an airplane. In a cockpit, pilots are surrounded by countless dials and instruments, but they don't constantly monitor all of them. Instead, they focus on the “six-pack” to track essential information like speed and altitude. Only if something looks off do they turn to other instruments. This same principle applies to tracking your eCommerce business.
The eCommerce Metrics Six-Pack
Empower your team and drive better business decisions with these six eCommerce KPIs:
Click the image above to start using a free version of Daasity's daily six-pack eCommerce metrics tracker.
- Traffic
- Conversion
- Orders
- Average order value (AOV)
- Sales
- Return on ad spend (ROAS)
Traffic
The number of visits to your eCommerce site is a primary lever you can impact via marketing and advertising. You need a certain amount of traffic to hit your numbers, so this is an important metric to monitor.
However, it’s important to note here that while traffic might look great, if your conversion rate is low (i.e., consumers aren’t buying), it probably means you’re not getting the right audience coming to your site. Time to review your customer acquisition strategy!
Conversion Rate (CVR)
Conversion rate is another primary lever that you can influence. Your conversion rate is calculated by dividing the number of conversions (aka purchases) by the total number of visitors to your site and multiplying by 100.
The number of visitors to your site who purchase can be affected by many factors, including your site’s user experience, the products you’re featuring and your marketing efforts and promotions.
To improve your conversion rate, run a conversion funnel analysis to identify where optimization opportunities may exist in your conversion funnel. The conversion funnel includes the following steps: 1) customers entering your site, 2) going to product pages, 3) adding product(s) to their carts, 4) reaching checkout, 5) making purchases.
Orders
Orders are a function of traffic and conversions (traffic x conversion rate = orders). Therefore, to increase orders, you need to increase traffic and/or conversions.
A common mistake is to focus on orders as a primary lever and decide, for example, to try and increase orders by 10% next month. You don’t control orders. Instead, focus on traffic and conversions.
Sales
This metric is straightforward; pull your daily gross sales from Shopify daily. You’ll want to monitor sales to make sure your daily, weekly, and monthly sales numbers are on track to hit your goals. If you notice sales are down on a typically high-performing day, investigate further.
For example, you could discover you ran out of inventory in a top-selling product. Your six-pack provides the nearly-real-time red flag indicating that you need to fix the issue quickly, versus potentially letting it linger for days.
Average Order Value (AOV)
Your average order value (AOV) is the average amount a customer spends per order and is directly impacted by what products you’re selling on your website. Calculate it by dividing your total revenue by the total number of orders.
There are many ways to increase AOV. For example, by offering complementary products that are compelling to purchase together (bundles), offering upsells ("Would you like a 10-pack instead of a 5-pack"?), or nudging customers to get free shipping or a gift with purchase by adding one more product to their cart.
Return on Ad Spend (ROAS)
Your return on ad spend (ROAS) is the number of dollars you make for every dollar spent on marketing. Calculate ROAS by dividing the sales (attributed to your marketing campaigns) by your marketing budget. It’s a great high-level indicator of how effective your marketing is and what return to expect from your investment.
There are many factors that can impact your ads and site that determine your ROAS. Keep an eye on this metric to get ahead of any potential issues or opportunities with your ads.
Tip: We recommend spending about 15 minutes each day reviewing the 6-pack. Consistently checking in allows you to make informed decisions quickly. For example, if you notice a drop in conversion rate, you might decide to review your website's user experience.
What Else Should You Track?
In addition to the 6-pack, consider periodically monitoring these additional metrics:
Discount Rate
Monitor this when making significant changes to your discount strategy. Although the impact of discounts can show up in your AOV, you might overlook it if customers purchase more products.
Refund/Return Rate
Monitor this closely with new product launches or supply chain changes, as it can indicate product defects or quality issues.
These metrics can help identify potential threats to the business, so you can step in and take corrective action.
Making the Six-Pack eCommerce Metrics Actionable
If you're regularly monitoring your KPI six-pack, you have a clear overview of eCommerce performance. That's great. But what can you do with that information? Here are key actions you can take to leverage these metrics and drive your business forward:
Seize New Opportunities
Monitoring the six-pack helps you identify opportunities to increase revenue. Tracking the numbers prompts you to ask, “Why are we seeing such a huge spike in X?” and dig deeper to identify and possibly replicate or build on whatever is causing the change in performance.
For example, if you notice that one metric, such as AOV, is outperforming expectations, you could try adding new product bundles, upsells, or a different free shipping promotion.
Adjust Strategy
Don’t get caught off guard with missed goals at the end of a month or quarter. If you stick to a daily review of the six-pack, you’ll have a longer runway to identify and fix issues so you can keep your numbers on track.
For instance, knowing that your sales are going to be lower than expected in the first half of the month indicates you’d better change tactics before the month is out to get as close to your goals as possible.
Measure and Predict Impact
As you get used to tracking your metrics on a daily or weekly basis and seeing the results of different promotions, over time, you will begin to recognize patterns. Then, as you test new promotions, you will be able to estimate how you expect a new initiative will perform, based on similar results you observed from the performance of a previous promotion.
Get the Free Six-Pack Tracker
By consistently monitoring your six-pack eCommerce metrics, you'll be equipped to quickly identify issues and take corrective action. Whether it's adjusting your advertising to boost traffic or launching promotions to increase AOV, these key performance indicators provide the insight you need to keep your business on course.
Download the free tracker now and start monitoring your business's six-pack eCommerce metrics today!
