Track These 4 Metrics & Watch Your eCommere Business Grow

Have you noticed how popular tracking and collecting data have become recently? Just look at the plethora of wearables that have emerged to track fitness over the past few years: Fitbits, Apple Watches, Jawbones, and more. Why has wearable technology skyrocketed in the past few years?

Tracking human behaviour has become a trend that is here to stay and expand. Wearables offer people insights into valuable data that not only lets them know how close they are towards reaching their goal, but also analyzes each bit of activity in regards to the person’s overall health. The result? More often than not, people are losing weight and becoming healthier in the process.

Now, take that concept and apply it to the health of your business. Tracking things regularly can help you understand where your ecommerce company is at in regards to a certain revenue, growth or market share goal you may have.

When it comes to eCommerce, tracking four key metrics can give you an accurate pulse on your ecommerce business, help you address key areas that increase your revenue, and help you refine your marketing process.

Learning from the Past

My previous eCommerce business, Offmap, focused on providing affordable adventure travel packages guided by your smartphone, instead of a tour guide. After my launch, and just weeks into the business, I began tracking several metrics. Because of the knowledge I extracted from this data, I was able to successfully increase my revenue just one month after I began tracking.

[my previous startup, Offmap]

This post will discuss my experience with these top four metrics by analyzing data specific to my previous eCommerce company, and will outline ways for you to implement the same strategy into your own business.

Cost per Acquisition

One metric I was very fortunate to tackle early on in Offmap’s life was Cost per Acquisition (CPA). This metric was one I intentionally built into my launch strategy to keep my CPA low from Day 1.

Because of the limited number of trips we could offer in Offmap’s early days, we placed all new users on a waiting list. To incentivize sharing via Facebook, Twitter, and email, I offered users the ability to get bumped to the front of the line… but only if at least two of their friends also signed up through the unique referral link. I then incentivized sharing even more by increasing the benefits to the user: the more friends they signed up, the sweeter the deal for the user (one of the rewards was even a free trip).


As sharing is free on social media sites, my only cost was programming my site and integrating the social functionality ensured that I could validate users’ access via successful shares and signups. The main costs I incurred were those of the rewards I was giving away.

Implementing this social sharing element into my intial launch reduced my CPA from what it would have been without the sharing incentive, even with the cost of the free trip and discounts I gave out. Had I not used this acquisition strategy, I would have faced much higher costs in ad spend. I chose to bet on word of mouth via social media – plus, it’s free!

Related: 6 Word of Mouth Marketing Tips

To determine your cost per acquisition, take your total marketing spend for a specific channel over a period (year/month), and then divide it by the number of customers you acquired via that channel during that period.

For example, if you spend $100 on Twitter and acquire 10 customers from that channel, your CPA would be $10 per customer for your Twitter channel.

Whether you never heard of CPA before or haven’t spent the time to monitor it in the past, it’s never too late to begin. Here are a few questions you can ask yourself to identify opportunities to lower your CPA:

  • What are my best performing products?
  • Do the products on my homepage resonate with my target demo?
  • Are my customers sharing a certain product on social media more than others?
  • Do I have channels that aren’t performing?
  • Are the people clicking on my ads being directed to relevant content?

Once you have an answer to these questions, be aggressive. By optimizing your content based on an analysis of your current CPA, you can lower your future CPA significantly. Place your best performing products on your homepage, and share them on your social media channels. Implement unique tracking URLs (here’s a helpful video tutorialor offer unique discount codes to customers. Monitoring customer response to changes will give you incredible insight into what they actually want to see and buy. Your audience is your best advisor!

Shopping Cart Abandonment Rate

Offmap got off to a good start. With some early PR achieved pre-launch, we built a strong customer base within a few weeks of going live. After travel packages began selling, I decided I needed to monitor how many people were abandoning their carts by adding an adventure package, then removing it and leaving the site, or as it’s more commonly called: an abandoned cart.

Customers are tricky: Unless they are die-hard, committed fans of your brand (like Nasty Gal loyalists), chances are they will change their mind during their purchase process on your site. This can be caused for a variety of reasons, from security concerns to a poor checkout UX. In the case of Offmap, I figured out the reason for our abandoned carts was related to our customer’s mindset: they were often just ‘browsing’ or planning for the future, and not necessarily ready to buy right then. They would add the trip package to their cart, browse around, maybe view their cart, and then exit.

Sale lost… Or was it?

When I made the connection that the lack of a purchase was because these customers simply weren’t ready to buy, I began to think about my abandoned cart rate differently. It didn’t necessarily mean I was losing that percentage in sales, just experiencing the effects of a delayed purchase.

This made those users qualified sales leads, and I clearly needed to nurture this relationship. My channel of choice was email: There’s nothing more personal than a message to a customer’s Inbox. Conveniently, Offmap required users to provide their email in step 1 of onboarding, so I had a substantial list to work with.

[Example of my onboarding process: user email required to continue]

My recovery efforts centered around building and sending abandoned cart reminders. By showing my interested (but yet unconvinced) customer what they left in their cart and coupling it with a personalized message and reiteration of my value proposition, I was able to convert 10% of my abandoned cart users to paying customers. That percentage may not seem very high, but my product price tag was significantly higher than most consumer purchases (ranging from $800 – $1,000 USD), so 10% equated to a pretty decent amount in recovered revenue.

Related: 7+ Order Confirmation Emails to Skyrocket Sales

Although this exact scenario may not apply to you, it does highlight another very popular reason for cart abandonment: sticker shock. In fact, 56% of shoppers leave a site without making a purchase because of unexpected costs (source).

An effective strategy in minimizing “sticker shock” is to offer free shipping. Not only should you offer it, you need to make it visually apparent – front and center – that you are giving your customers this break. Though it may not be a significant reduction in overall charges (sometimes only a few dollars), simply making the customer aware that you are consuming some cost on their behalf plants the right psychological seed. When the customer sees their shipping charges zeroed out in the checkout process, they are more likely to follow through and complete the purchase knowing they are saving some cash.

To read about this subject more in depth (and how you can really leverage free shiping to your advantage), check out this blog post.

Repeat Purchase Rate

As we’ve previously noted, only 32% of customers place a second order in their first year as a customer!

Since data like this suggests that many customers visit ecommerce websites to simply buy once and fulfill a need, it’s difficult to determine if your repeat purchase rate is healthy or something that needs improvement.

Your repeat purchase rate can be calculated using this simple formula: Customers that have purchased a second time / total customers.

A year into Offmap, my repeat purchase rate was around 15%. Though this may not seem like a good number, I was only looking at a year. I couldn’t draw any firm conclusions. The travel industry, in general, needs a very large amount of data for analyzing and improving their repeat purchase rate. After all, most people only take one big trip per year. So, looking at my numbers after a year wasn’t ideal.

Still, I wanted to increase my repeat purchase rate. My initial instinct was to hit the inbox, similar to my approach with my abandoned carts. To connect with my customers who had already purchased one trip, I:

  1. Analyzed their purchase to find what they were interested in
  2. Segmented my email list into customers with similar interests
  3. Implemented this data into my ad campaign strategy, since existing customers are 14x more likely to buy as a result of marketing.

From a business development perspective, learning about your customer is one of the best investments you can make in your ecommerce business. However, figuring out which of your existing customers are the most likely to purchase a second time is the more difficult. However, tracking your repeat purchase rate is crucial to lowering your costs. If I hadn’t learned what adventure packages drew most of my customers in (the ones at a certain price point, or the ones to specific countries), and what packages were purchased repeatedly, Offmap would have drained itself of cash after that first year just in marketing costs.

Customer Lifetime Value

Since my product at Offmap had a much higher price point than many other ecommerce businesses, my typical customer would purchase from us once (maybe twice) in a 12-month period. Even though they made only one purchase per year, my customer’s’ lifetime value to my business was not any less important. In fact, it was even more important than it is for other businesses. I needed to do everything in my power to please these customers and make their experience as high quality as possible, in hopes they would return and spread the word about Offmap.

A customer’s lifetime value can be thought of as the dollar value of a customer relationship (source). You want to have a positive number for your CLV that is greater than your CPA, making your customer worth more than it cost to acquire them.

Determining your CLV is done by answering these three questions:

  1. What is my customer acquisition cost (CPA)?
  2. What is my annual profit per customer?
  3. What is my customer retention rate (CRR)?

Once you’ve figured out your CLV, it’s time to refine your data even further. Filtering these results by channel (such as AdWords, Instagram, Facebook, etc.) will provide you with insight into which channels are giving you the highest CLV. This will allow you to determine which channels to nurture further, and which to consider cutting back on. For example, if your Facebook Ads CLV is $500 but your Instagram CLV is $800, it would be wise to increase spend in your Instagram campaign.

Related: How to Market on Instagram: 14 Tips and 6 Tools

At Offmap, my highest-value CLV channel was Facebook, and that is what spawned my incremental rollout of sharing initiatives. After the first sharing incentives proved successful, I began rolling out larger sharing rewards (successfully sign up 5 friends, get an entry for a free trip). As a result, my CPA lowered and my CLV increased.

What Gets Measured Gets Managed

Tracking these four metrics can improve your revenue figures by shedding light on your customer behavior, highlighting areas for improvement, and dialing in your marketing strategy. Think of these metrics as a “Fitbit for your business” – you’re tracking its health, measuring your progress and growth, and giving your business what it needs to thrive.

We’d love to know if you are tracking any of these metrics! If so, how is that going and did this post give you some ideas on how to get more out of the data? For those not tracking, are you going to get into the game of tracking?

Allen Burt

Allen Burt is the Founder and Managing Director of Blue Stout, a digital product agency for ecommerce, start­ups, and growing brands. Prior to Blue Stout, Allen led two ecommerce startups and consulted corporate tech companies. Allen writes on the topics of entrepreneurship, social enterprise, and economics on Blue Stout’s Blog, and for other prominent publications such as the Matador Network and Huffington Post.



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