Understanding key metrics in ecommerce .


To run a successful Ecommerce business, it is vital that you are able to use and understand various metrics, which will help you to determine just how successful the business (and more so, your online store) is. Data driven decision-making is based around facts rather than gut reactions, and this practice is what has produced high Return on Investment (ROI) for many large online retailers, especially the likes of Amazon et al.

To be able to make data driven decisions you need to know the key metrics to measure. Below you will find our top Ecommerce metrics you need to know to build a successful online store.

Customer Acquisition Cost (CAC)

This metric measures the cost of where you have to start – by driving traffic to the website and then converting those visitors. Ultimately, this costs money. CAC shows how much money you spend throughout the acquisition funnel from promoting a post on social media or another form of advertising, to the visitor coming to the site, all the way through to them finding the product they want to buy and finally going through the checkout process. In other words, CAC is the amount of money you have to spend to get one customer. The lower the CAC the better. As an example, your CAC is £40 if you need to spend £200 to get five visitors to buy on your store.

Conversion Rate (CR)

Once your online store gets traffic, it’s important to be able to measure how many visitors are actually buying from your store. Conversion rate shows you this as a percentage. The higher the conversion rate, the better and so ideally you want it to be always increasing. As a quick example, your conversion rate is 2% if 2 out of 100 visitors buy from your store.

There is so much emphasis on conversion rate because it directly affects your business’s bottom line. Regardless of how much effort you spend on driving traffic to your online store, if most visitors don’t end up buying, it’s all wasted. It’s really important to make sure you know what your conversion rate is at all times and keep tabs on whether it’s improving, and if it isn’t then to search out some further advice for how you can improve the funnel journey and check out process. Our blog ‘Simple Steps to improve your conversion rate optimisation’ explains further.

Shopping Cart/Basket Abandonment Rate

If you find that your conversion rate is low, you need to understand how many visitors had an inclination to buy. To do this, you’ll need to examine your abandonment rate.

This metric indicates the percentage of visitors who added products to their shopping basket but did not complete the checkout process and, once again, the lower the abandonment rate, the better. As an example, your abandonment rate is 50% if 50 out of 100 visitors leave/abandon the basket and do not complete their purchase.

With Abandonment rate you also need to consider just how much it cost to get those customers to your site in the first place, and whereabouts in the purchase journey the baskets are being abandoned. For example, if there are 4 steps in the checkout process, and 8/10 of the abandonments occur in step 1, then you need to analyse the page that step 1 is on, and look at it from the customer’s perspective. What is putting them off on that page? If you’re asking for credit card details, is that too soon? Are you showing online purchase security to make the end user feel safe about giving their credit card details over? Making sure your basket abandonment rate is low is key to improving your conversion rate.

Average Order Value (AOV)

AOV simply tells you how much, on average, a purchase at your online store is – i.e. how much revenue you are generating.

The higher the average order value, the better. For example, your AOV is £35 per order if you made £140 from 4 orders (even if one of the orders was over £35).

Monitoring AOV allows you to figure out how much revenue you can generate from your current traffic and conversion rate. Being able to predict revenue is necessary for any business. If most of your orders are small it means you have to get a lot more people to buy in order to achieve your target. It’s important to have at least a few high value orders so that your overall average is on the higher side.

Customer Lifetime Value (LTV)

A customer will generate this projected revenue during their lifetime. The simplest way to estimate it is:

(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer)


If your LTV is low, it could be that many of your customers buy once and never return. This is measured by what is referred to as “churn.” The lower the churn, the better. For example, a churn rate of 80% means 80 out of 100 customers do not come back to buy from your store. Ideally churn rate needs to be low so that once you acquire a customer, they continue to come back and purchase again and again. Lower churn means higher LTV and a healthier business overall.

Mobile/Tablet User Conversion Rates

It’s also important to watch the proportion of mobile users and mobile conversion rates. If your mobile conversion rate is low, and if/or your basket abandonment rate is high this will mean that you need to investigate and improve the mobile checkout process. Maybe your checkout process isn’t mobile optimised or the buttons are too small which makes the end user struggle. A low mobile conversion rate and/or high abandonment rate shows that something isn’t right in the mobile/tablet checkout journey.

You will of course need to make sure that you have ECommerce tracking set up in your Google Analytics accounts. Ecommerce can be found under ‘Conversions’ on the left panel options.

Once you start measuring your Ecommerce store performance and using data to drive your business decisions and strategies, you’ll be on the way to huge success. So remember to monitor your metrics to make the most of your time and money in order to build a successful online brand.

If you would like to talk to us about your digital ecommerce objectives, please call 01233 467800, email hello@sagittarius.agency or event visit our ecommerce calculator and understand how your business can achieve digital ecommerce success!

Whatever your business, be it a regional or global brand, the content you produce plays a vital role in your success. You know that… hence you’re reading this.

A well formulated and executed content strategy not only drives more traffic, at the core, it defines what your business is and helps build a strong connection between you and your audiences.

So let's quickly look at why developing a coherent content strategy is important and how setting clear goals and understanding your audience will elevate your online performance. 

What is a Content Strategy?

It's basic right? Content is at the core of how you define the way your business presents itself and an effective strategy should look to ensure that tone of voice, messaging and the core values are surfaced across all channels, from service or product pages on your website, to blog posts, through social media updates blah blah blah.

But let's keep it simple - your content strategy should be a clear roadmap that connects your marketing activities to your business goals. Align to your customer’s wants and needs and engage them at every interaction point and boom, you're in business. 

Who are my Audience?

You likely start all your projects with this chalked on the wall because your business knows “exactly” who its customers are right? Sounds obvious but we often find its not been done forensically enough (not based on data), is too old (more than 12 months ago - forget it) or its a spin off from some brand work that was legitimately aspirational but doesn’t face the reality of who you your business is actually engaging today.

So start (or circle back) with audience research, building out those personas to understand their ambitions, their lifestyle, their pain points or concerns, and crucially their wants and needs - in your context. 

Do I need to tailor content?

As part of your research find out where your audiences spend their time online and how they interact with content: Some may spend time thoroughly researching a product or service, whereas other audiences may want their content to be quick, snappy or easily digestible in the form of a video, infographic or short blog posts.


Ultimately, the key is to produce a strategy that creates the type of content your customers want to see:

  • What are the problems that your product or service will help them solve?

  • Who are they most influenced by?

  • What voices influence their behaviour?

  • What type of content do they consume?

  • Where do they consume content and engage with brands?

Different Content, Different Objectives

 All content is not born equal: When producing your strategy, it is important that the objectives for each individual piece are defined, that these fulfil your marketing objectives and tie to the overarching goals for your business.

There are various content frameworks that exist to aid content development in this way, but one that is popular and effective is Google’s hero, hub and hygiene method: It provides a framework on developing content to achieve different goals and gives guidance on the effort needed to create each type of content.

Hero Content

Hero content is essentially campaign content, it is big splash ideas designed to appeal to a large audience with the aim of telling your brand’s story at scale. 

Ways of measuring hero include the amount of PR mentions or links from authoritative domains plus social interactions and mentions of your brand across all channels. 

Considering the scale of hero campaigns, this content is not regularly produced and is reserved for peak promotional times where it’s important for a business to stand out from their competitors.

Hub Content

Hub content is the stuff that keeps your audience engaged, it expands on the themes of product or service level content, educates users and helps create a connection between themselves and your brand.

Hygiene Content

Hygiene content is the bread and butter of any website, it is the BAU content for products and services, it is SEO focused and targets important keywords at a product, service or guide level.

How do I manage all this?

Content development is only one part of the ongoing work needed when working with an effective content strategy. We call it “feeding the beast” because it really is the fuel in your brand vehicle and once you start you really can’t stop (if it’s delivering results) but that’s where performance measurement comes in.

Your greatest gift in managing the outputs from your hero/hub/hygiene style efforts is to understand If your content is working. To truly deliver results your business must first understand the objectives and goals of each piece of content to effectively measure its success. That as a guiding light from day 1 will let you slow down, speed up, stop or start new content briefs and projects.

Remember - content strategies are not set in stone. They are living breathing things and should adapt and pivot as insights become available and your brand naturally evolves.

If ever you want to chat content and explore new initiatives we’re always here to help.

want to speak to one of our experts?



05 Jan 2017 - 5 minute read
share this

stay in the know, stay ahead.

Get the latest from the agency, including news, events and expert content.
explore services in the article
find out what we can do for you
read some of our case studies