17 Marketing KPIs Every E-commerce Advertiser Should Know

The e-commerce industry has undergone rapid development and changes in recent years, becoming a crucial part of the global economy with its market size continually expanding. It is expected to maintain high growth in the coming years. For those looking to delve deeply into this industry, this blog will provide essential insights for achieving success.

Recent Market Overview of E-commerce

1. Consumer Upgrade: Consumers are increasingly demanding higher quality products, brands, and services, making consumer upgrades a major market trend.

2. Experience Consumption: Consumers are more focused on their shopping experience, raising their expectations for product appearance, packaging, and service.

3. Increased Demand for Personalized Services: There is a growing demand for personalized and customized products and services, prompting e-commerce platforms to continually optimize user experience and service quality.

4. Mobile Shopping Trend: Mobile shopping has become a dominant trend in the e-commerce market, making consumer shopping behavior more convenient and efficient.

5. Rise of Social E-commerce: The social e-commerce model is maturing, with an increasing number of goods sold through social media platforms.

6. Emergence of Private Domain E-commerce: This new e-commerce model focuses on deeply exploring user needs, strengthening social interactions, and providing refined service operations, reshaping the traditional e-commerce landscape.

7. Opportunities and Challenges: While the e-commerce market offers significant growth potential, it also faces challenges in traffic acquisition, brand building, and supply chain management.

8. Intense Market Competition.

9. Diversified Demand: Consumer needs are becoming more diverse, requiring e-commerce platforms to conduct refined operations and services based on different consumer groups.

10. Development of Instant Retail: The instant retail sector is continuously developing, with mainstream e-commerce platforms investing heavily in this area, creating a new "instant+" commercial framework.

11. Growth in Lower-tier Markets: Lower-tier markets remain a growth point for the industry, with consumers in these areas showing interest in interactive shopping methods and possessing consumption potential.

12. AI Integration in E-commerce: Leading platforms are actively promoting the AI integration of e-commerce, reducing operational costs for merchants.

13. Coexistence of Rational and Emotional Consumer Needs: Merchants need to explore consumers' emotional needs in addition to their rational demands.

Having understood the market landscape of the e-commerce industry, we can set our marketing direction accordingly. Naturally, establishing e-commerce advertising marketing KPIs is an essential step for successful marketing.

How to Choose the Necessary KPIs to Track?

When selecting KPIs for e-commerce advertising marketing, several key factors should be considered to determine which metrics best align with your business goals and marketing strategies.

Steps and Suggestions for Determining and Selecting KPIs:

• Clarify Business Goals: First, identify your business goals. These may include increasing sales, enhancing brand awareness, expanding market share, or boosting customer loyalty.
• Understand Your Target Audience: Know who your target audience is, and what their needs, behaviors, and preferences are. This will help you choose KPIs relevant to your audience.
• Evaluate Marketing Strategies: Consider your marketing strategies and channels, determining which KPIs can measure the effectiveness of these strategies.
• Identify Key Result Areas: Pinpoint the key result areas of your business, such as sales, customer service, or product development.
• Select Quantifiable Metrics: Choose quantifiable metrics that you can accurately track and measure.
• Consider Data Accessibility: Ensure the KPIs you select can be tracked with the tools and resources you have available.
• SMART Principle: Ensure your KPIs are Specific, Measurable, Achievable, Relevant, and Time-bound.
• Balance Short-term and Long-term Goals: Choose some short-term KPIs to measure immediate effects, while also having long-term KPIs to track sustained business growth and success.
• Analyze Competitors: Study the KPIs and marketing strategies of competitors to understand how they measure success.
• Flexibility: Maintain flexibility to adjust your KPIs as your business evolves and market conditions change.
• Integrate Data from Different Channels: If you are marketing across multiple channels, ensure your KPIs can integrate data from these channels to provide a comprehensive view.
• Utilize Technical Tools: Leverage technical tools like Google Analytics, CRM systems, and social media analytics tools to help track and analyze KPIs.
• Regular Review: Regularly review your KPIs to ensure they remain aligned with your goals and strategies, making adjustments as necessary.
• Team Consensus: Ensure that your team is aligned on the KPIs so everyone is working towards the same objectives.

17 E-commerce Ad Marketing KPIs You Should Measure

Sales Volume

Sales volume is one of the most fundamental and crucial KPIs in e-commerce marketing. It directly reflects a company's business performance and market acceptance. Sales volume typically refers to the total number of products or services sold through online channels within a specific period. It is a quantifiable metric that can represent the number of items sold, services rendered, or revenue generated.

Sales volume is the most direct indicator of business growth and is closely linked to profitability. By analyzing changes in sales volume, companies can gain insights into market trends and consumer behavior. Sales data can help businesses allocate resources more effectively, such as in inventory management and marketing budgets.

Improvement Strategies

• Product Optimization: Continuously improve products to meet market demands and enhance customer satisfaction.
• Marketing Innovation: Adopt innovative marketing methods such as social media marketing and content marketing.
• Customer Relationship Management: Use CRM systems to maintain customer relationships, increasing loyalty and repeat purchases.
• Pricing Strategy: Flexibly adjust pricing strategies to attract more customers.
• Promotional Activities: Regularly hold promotional events to stimulate sales.
• Multi-channel Sales: Expand sales channels, such as social media and mobile apps.

Gross Profit

Gross profit is the profit a company makes after deducting the costs associated with making and selling its products. It reflects the initial profit earned from sales.

Gross profit is a crucial indicator of a company's profitability. Analyzing gross profit helps businesses better control costs. It can guide the optimization of product portfolios and help in setting and adjusting pricing strategies.

Improvement Strategies

• Increase Sales Prices: Raise sales prices without sacrificing sales volume.
• Reduce Procurement Costs: Lower costs through negotiation, bulk purchasing, or finding more economical suppliers.
• Improve Production Efficiency: Adopt more efficient production methods and technologies to reduce waste.
• Optimize Product Portfolio: Eliminate low-profit products and focus on high-profit items.
• Add Value: Increase sales prices by offering additional services or value-added products.

Average Margin

Average margin typically refers to either gross margin or net margin, depending on how a company defines it. Gross margin is the ratio of gross profit to sales revenue, while net margin is the ratio of net profit (after operating expenses) to sales revenue.

Average margin is a key indicator of profitability. Monitoring margins helps businesses better control costs and pricing strategies, aiding in business strategy and investment decisions. High margins may indicate strong market competitiveness, and sustained high margins are crucial for financial health.

Improvement Strategies

• Optimize Pricing Strategy: Develop reasonable pricing strategies based on costs and market competition.
• Reduce Procurement Costs: Lower costs through negotiation, bulk purchasing, or more economical suppliers.
• Increase Operational Efficiency: Improve efficiency through process optimization and technological innovation, reducing operational costs.
• Product Differentiation: Create higher value through product differentiation, enhancing margins.
• Customer Segmentation: Develop differentiated pricing and marketing strategies for different customer segments.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost is the total marketing and sales expenses incurred to attract new customers, averaged per new customer. It’s crucial for evaluating the effectiveness and profitability of marketing activities.

By comparing CAC with Customer Lifetime Value (CLV), businesses can determine if their marketing activities are profitable, helping control costs and optimize marketing budgets. CAC is key for market expansion, product pricing, and marketing strategy. Lower CAC means higher ROI.

Reduction Strategies

• Optimize Marketing Channels: Analyze the cost-effectiveness of different channels and optimize the mix.
• Increase Conversion Rates: Improve website UX, landing page optimization, and marketing messages.
• Customer Segmentation: Target marketing efforts towards likely converting customer segments.
• Utilize Data: Use data analysis to better understand target customers and improve targeting.
• Content Marketing: Attract potential customers with high-quality content, a cost-effective acquisition method.
• Referral Programs: Implement referral programs to leverage existing customers' networks for new acquisitions.

Conversion Rate (CVR)

Conversion Rate measures the percentage of visitors who complete a desired action (usually a purchase) within a specific period.

The conversion rate directly indicates the effectiveness of marketing activities. Analyzing conversion rates can guide website and marketing strategy optimization. Higher conversion rates often mean increased sales and revenue. Comparing conversion rates helps understand performance relative to competitors.

Improvement Strategies

• Optimize Website Design: Ensure the design is visually appealing, intuitive, and easy to navigate.
• Improve User Experience: Enhance website speed, simplify the shopping process, and provide clear product information.
• Strengthen Marketing Messages: Align marketing messages with the needs and expectations of the target audience.
• Provide Personalized Experiences: Use user data to offer personalized recommendations and discounts.
• Enhance Trust: Display customer reviews, certification marks, and clear privacy policies.
• Optimize CTAs: Design compelling calls to action, like "Buy Now" buttons.

Average Order Value (AOV)

Average Order Value represents the average amount spent per order within a specific period. It reflects customer purchasing power and loyalty to the brand.

AOV serves as a reference for market positioning and brand positioning, and it is an indicator for evaluating the effectiveness of marketing activities, especially promotions and discounts. It can help businesses adjust product pricing strategies to attract more purchases. Increasing AOV directly correlates with increased revenue.

Improvement Strategies

• Bundling Sales: Encourage customers to buy more products by offering bundles.
• Cross-selling and Recommendations: Suggest related products during browsing or checkout.
• Increase Product Value: Enhance product value to justify higher prices rather than simply raising prices.
• Optimize Product Line: Ensure the product line meets different customer needs while increasing overall AOV.
• Improve Shopping Experience: Improve website navigation and checkout process to reduce cart abandonment.
• Loyalty Programs: Encourage repeat purchases and larger orders through loyalty programs.

Inventory Levels

Inventory levels typically refer to the quantity of goods stored in a warehouse, including raw materials, work-in-progress, and finished products. They reflect the amount of inventory a company holds at a specific time.

Inventory levels directly impact holding costs, including storage fees, insurance costs, and the risk of product depreciation or obsolescence. Appropriate inventory levels ensure continuous product supply, avoiding stockouts and improving customer satisfaction. Good inventory management can speed up order processing and reduce logistical delays. Flexible inventory level adjustments help businesses quickly respond to market changes and seize sales opportunities. Inventory management aids in optimizing cash flow as inventory is a significant asset.

Improvement Strategies:

• Demand Forecasting: Use data to predict demand accurately and maintain optimal inventory levels.
• Just-in-time Inventory: Implement just-in-time inventory practices to reduce holding costs.
• Inventory Turnover Analysis:Regularly analyze inventory turnover to identify slow-moving items and adjust stock levels.
• Supply Chain Optimization: Strengthen supply chain relationships and logistics to improve inventory efficiency.
• Automated Inventory Management: Utilize inventory management software to monitor and manage stock levels in real time.
• Regular Audits: Conduct regular inventory audits to ensure accuracy and address discrepancies.

Product Affinity

Product affinity describes consumers' emotional connection and preference for a particular product or brand. Although it is not a traditional KPI that can be directly quantified, product affinity is crucial in e-commerce marketing as it influences purchase decisions and brand loyalty.

High product affinity can foster brand loyalty and encourage repeat purchases. Analyzing product affinity can guide the development of new products and the improvement of existing ones. Understanding different consumer groups' product affinity helps in market segmentation and targeting. Personalized marketing based on product affinity can increase conversion rates.

Improvement Strategies

• Brand Building: Create a positive brand image through storytelling, brand activities, and social responsibility projects.
• User Experience Optimization: Ensure a positive experience during the purchase and use of the product.
• Customer Feedback: Collect and respond to customer feedback to continuously improve products and services.
• Social Media Interaction: Engage with consumers through social media to enhance brand recognition.
• Personalized Experiences: Provide personalized product recommendations and services to meet individual consumer needs.

Traffic Sources

Traffic sources refer to the specific channels or platforms that direct users to your website, such as search engines, social media, email marketing, advertisements, and partner websites.

Analyzing traffic sources provides insights into user behavior and helps businesses better understand their target customers. By analyzing traffic sources, businesses can optimize the allocation of marketing resources and improve efficiency. Understanding which ad channels bring the most conversions aids in evaluating and adjusting advertising strategies. Additionally, knowing the traffic brought by partner websites helps in assessing and managing partner relationships.

Improvement Strategies

• Channel Analysis: Regularly analyze the performance of different traffic sources and optimize the mix.
• Content Marketing: Create high-quality content tailored to each channel to attract more visitors.
• SEO Optimization: Improve search engine optimization to increase organic traffic.
• Paid Advertising: Invest in high-performing ad channels and continuously test ad variations.
• Email Marketing: Use targeted email campaigns to drive traffic from existing customers.
• Partnerships: Develop and maintain strong partnerships to leverage their audiences.

Cart Abandonment Rate (CAR)

The cart Abandonment Rate measures the percentage of customers who add items to their cart but leave the website without completing the purchase. Understanding and reducing the cart abandonment rate is crucial for improving conversion rates and increasing sales.

The cart abandonment rate provides an opportunity for conversion rate optimization. By analyzing the reasons for abandonment, businesses can take measures to increase the completion rate of purchases. It serves as an indicator of user experience quality. Analyzing abandonment rates can help adjust marketing strategies, such as offering coupons or optimizing the checkout process.

Strategies to Reduce Cart Abandonment Rate

• Simplify Checkout Process: Reduce checkout steps and provide clear instructions.
• Transparent Fees: Display all costs early in the shopping process.
• Diverse Payment Options: Offer multiple payment methods, including popular online and mobile payment options.
• Build Trust: Show security badges, customer reviews, and certification marks to increase trust.
• Cart Recovery Emails: Send reminder emails to customers who abandon their carts, offering coupons or special deals.

Customer Lifetime Value (CLV)

Customer Lifetime Value, also known as Customer Lifecycle Value, measures the total revenue a customer brings during their relationship with a business.

Understanding CLV helps evaluate the return on marketing investment, especially in customer acquisition and retention. High CLV customer segments are worth investing in for retention and cultivation. CLV helps businesses consider customer value from a long-term perspective, not just single transactions. Analyzing CLV allows better management of customer churn risk and guides pricing strategies to maximize long-term revenue.

Strategies to Increase CLV

• Improve Customer Satisfaction: Enhance customer satisfaction with high-quality products and services.
• Increase Purchase Frequency: Boost purchase frequency through promotions, membership programs, etc.
• Raise Average Order Value: Increase per-purchase amount through cross-selling, bundling,etc.
• Extend Customer Relationship: Extend customer relationships through loyalty programs and personalized communication.
• Personalized Marketing: Use customer data for personalized marketing to enhance customer loyalty.

Customer Retention Rate (CRR)

Customer Retention Rate measures the percentage of loyal customers a business retains over a specific period. High retention rates typically indicate high customer satisfaction, strong brand loyalty, and sustained revenue.

Good customer retention can be a competitive advantage, protecting against competitor threats. Satisfied customers may become natural brand promoters. The cost of retaining existing customers is usually lower than acquiring new ones.

Strategies to Improve Customer Retention Rate

• Provide Quality Customer Service: Ensure timely and effective help when customers need it.
• Regular Customer Feedback: Collect customer opinions through surveys and feedback to continuously improve products and services.
• Personalized Marketing: Offer personalized recommendations and discounts using customer data.
• Loyalty Programs: Implement loyalty programs to reward repeat purchases and long-term support.
• Regular Communication: Maintain regular communication with customers through emails, social media, etc.

Churn Rate

Churn Rate measures the proportion of customers lost over a certain period. Churn rate indicates customer satisfaction and service quality, reflecting a lack of brand loyalty and potential service quality issues. Low churn rates often mean strong market competitiveness and brand loyalty, while high churn rates may indicate problems needing timely adjustment. Acquiring new customers usually costs more than retaining existing ones, so reducing churn rate can cut costs.

Strategies to Reduce Churn Rate

• Understand Churn Reasons: Analyze reasons for customer churn and take corrective measures.
• Enhance Customer Service: Provide excellent customer service to improve satisfaction.
• Regular Engagement: Maintain regular engagement with customers to build strong relationships.
• Improve Product Quality: Ensure high product quality to meet customer expectations.
• Offer Incentives: Provide incentives like discounts or loyalty programs to retain customers.

Revenue Per Visitor (RPV)

Revenue Per Visitor measures the average revenue generated per website visitor over a specific period. This metric helps understand a website's monetization ability, i.e., how effectively traffic is converted into sales.

RPV is a key indicator of website monetization efficiency, reflecting site operation efficiency, including product display and shopping processes. It helps evaluate the quality of traffic attracted by marketing activities. High RPV indicates good user experience and effective sales promotion.

Strategies to Increase RPV

• Optimize Website Design: Ensure a user-friendly site with clear navigation and fast load times.
• Improve Conversion Rates: Boost conversion rates by optimizing product pages, increasing product recommendations, and improving checkout processes.
• Increase Average Order Value: Raise per-order amounts through cross-selling, bundling, and offering value-added services.
• Optimize Traffic Sources: Focus on acquiring high-quality, high-conversion potential traffic.
• Personalized Experience: Use customer data to provide personalized product recommendations and discounts.

Bounce Rate

Bounce Rate measures the percentage of visitors who leave the site without interacting further. Typically, it means the user visited one page and left without clicking on another page.

A high bounce rate may indicate issues in attracting and retaining user interest. Consistently high bounce rates can affect search engine evaluations and rankings.

Strategies to Reduce Bounce Rate

• Optimize Page Load Speed: Ensure quick page load times with caching and image compression.
• Provide Quality Content: Ensure content is valuable, relevant, and engaging.
• Improve Website Design: Create an intuitive, user-friendly site that is easy to navigate.
• Match Relevance: Ensure ads and promotions are highly relevant to the target page content.
• Mobile Optimization: Optimize the site for mobile devices to provide a good mobile user experience.

Average Session Duration

Average Session Duration measures the average time users spend on the website per session. This metric reflects user interest in site content and effectiveness in keeping users engaged.

Longer session durations usually indicate user interest in site content. High-quality content can attract users to stay longer, increasing interaction and conversion chances. Search engines might use session duration as a ranking factor.

Strategies to Increase Average Session Duration

• Optimize Content: Provide high-quality, engaging content that meets user needs.
• Improve Website Design: Create an intuitive, attractive site that is easy to navigate.
• Enhance Interactivity: Add interactive elements like social media integration, user reviews, and ratings.
• Personalized Experience: Offer personalized content recommendations based on user behavior and preferences.
• Optimize Page Load Speed: Use techniques like caching, compression, and content delivery networks (CDNs) to speed up page load times.

Page Views Per Visit

Page Views per Visit measures the average number of pages viewed by users during one session. This metric reflects user interest and engagement with site content, and the effectiveness of site navigation and user experience design.

More page views per visit indicate good user experience and navigation, increasing chances for users to learn about and purchase products, and boosting conversion rates.

Strategies to Increase Page Views Per Visit

• Optimize Site Structure: Ensure a clear hierarchy and intuitive navigation.
• Enrich Content: Provide diverse, high-quality content to meet different user interests and needs.
• Enhance Page Load Speed: Use technical optimizations like reducing HTTP requests and optimizing image sizes.
• Add Interactivity: Include interactive elements like comments, Q&A, and user-generated content.
• Personalized Recommendations: Provide personalized content recommendations based on user browsing history and preferences.

Correlating KPIs with Other KPIs

In a rapidly changing market, correlating KPIs helps businesses quickly adapt and make flexible adjustments. A single KPI might provide limited information, but correlating different KPIs offers a comprehensive view of business performance. Different KPIs offer various perspectives, helping businesses pursue one goal without sacrificing other important areas.

Some KPIs have causal relationships, such as improving customer satisfaction (one KPI) and potentially affecting customer retention rate (another KPI). Additionally, when a KPI performs poorly, analyzing related KPIs can help diagnose the cause.

Learn more about calculating KPIs ➡

How to Market Successfully on Facebook and Instagram？➡