Top 15 Growth Metrics for Ecommerce Businesses To Track

For many businesses, the road to profitability necessitates growth—new customers, new products, new sales channels. But how do you know if your growth is sustainable? And how do you know if your customers are loyal, and if you can count on them for future sales? 

When CEO Brad Charron took the reins of the plant-based protein brand Aloha in 2017, he looked carefully at the company’s existing customer base. Then he asked a critical question: How could Aloha operate differently so that customer relationships could keep growing over time? Starting over proved to be the right move because, today, Aloha is thriving, with well over $100 million in annual revenue. A lot of that revenue growth had to do with a growth-centric strategy. 

A growth strategy starts by charting metrics and key performance indicators (KPIs) that document your revenue, monthly spending, and entire relationship with your customer base. Most of these metrics draw from figures likely already in your existing bookkeeping systems, making them easy to calculate. 

What are growth metrics?

Growth metrics are key performance indicators that measure how well your business is scaling and achieving its strategic goals over time. Tracking growth metrics—like customer acquisition cost (CAC), revenue growth rate, customer churn rate, and user engagement—can help you monitor your business’s progress and chart a path toward future success. 

Why should ecommerce businesses track growth metrics?

As an ecommerce entrepreneur, tracking growth metrics is essential to gain valuable insights into trends, customer behavior, and the effectiveness of your strategies. For example:

• Customer acquisition costs and customer lifetime value (CLV) reveal whether your marketing efforts are cost-effective and sustainable.
• Revenue growth metrics and conversion rates empower you to adjust strategies to maximize profitability. 
• Your customer retention rate offers a window into the customer experience, showing whether existing customers stay loyal to your brand or turn to a competitor.

By tracking these metrics and using them to guide your strategy, you can optimize operations, make informed decisions aligned with your long-term goals, and stay competitive. At the same time, you may identify inefficiencies in your business strategies, which you can address to unlock your growth potential.

Top growth metrics for ecommerce businesses to track

• Customer acquisition cost (CAC)
• Customer lifetime value (CLV)
• Conversion rate
• Average order value (AOV)
• Cart abandonment rate
• Revenue growth rate
• Repeat purchase rate (RPR)
• Net Promoter Score (NPS)
• Bounce rate
• Customer churn rate
• Email open rate
• Customer retention rate
• Monthly recurring revenue (MRR)
• Annual recurring revenue (ARR)
• Monthly burn rate

When Brad took over Aloha, he had a simple mantra. “Instead of measuring return on ad spend, we started measuring return on profitability,” he says on an episode of the Shopify Masters podcast. “Because it’s not about being rich. It’s about being able to propel the journey forward.” 

You may take a similar approach in your own operations. Growth isn’t so much about wealth and glory as it is about keeping your business thriving for many years to come.

Here are important growth metrics to help you track your company’s performance:

Customer acquisition cost (CAC)

• How to use it. Use this key metric to evaluate the efficiency of your marketing efforts. For example, if your ecommerce store spends $10,000 on ads and acquires 500 new customers, your CAC is $20 per customer. Lower your CAC by optimizing your ad campaigns to better target potential customers.
• How to calculate it. Divide your total marketing and sales expenses by how many customers you’ve acquired.
• Formula. CAC = Cost of acquiring new customers / Number of new customers acquired

Customer lifetime value (CLV)

• How to use it. CLV helps you understand how much revenue you can expect from a single customer over time. For instance, if a customer spends $100 monthly for two years, their CLV is $2,400. When combined with other revenue metrics, CLV lets you flag high-value customers and budget for future revenue based on income from your current customer base.
• How to calculate it. Multiply the average purchase value of a customer by their purchase frequency, and multiply that by customer lifespan.
• Formula. CLV = Average purchase value × Purchase frequency × Customer lifespan

Conversion rate

• How to use it. Use your conversion rate to monitor the efficacy of your sales pipeline—especially its final stages. A low conversion rate may be due to poor website design or checkout flow issues. Understanding customer intent and improving your web pages to better align with those intentions can help boost your conversion rate and earn more revenue. 
• How to calculate it. Divide the number of conversions (sales) in your ecommerce store by the total number of visitors, and then multiply by 100.
• Formula. Conversion rate = (Conversions / Total visitors) × 100

Average order value (AOV)

• How to use it. Average order value is the average amount spent by customers per transaction. Knowing this can help you identify opportunities for upselling or bundling. For example, offering free shipping on orders above $50 encourages paying customers to increase their cart value. You have to eat the cost of the free shipping, but ideally, this will be outweighed by the additional revenue you generate. 
• How to calculate it. Divide your total revenue by the number of orders.
• Formula. AOV = Total revenue / Total orders

Cart abandonment rate

• How to use it. Cart abandonment occurs when a customer adds items to their shopping cart but does not complete the purchase. Use this metric to identify friction points in the checkout process. A high cart abandonment rate may indicate unpalatable shipping rates or overly complicated forms that deter potential customers. 
• How to calculate it. Divide the number of abandoned shopping carts by the total number of initiated checkouts, then multiply by 100 to obtain a percentage.
• Formula. Cart abandonment rate = (Abandoned carts / Initiated checkouts) × 100

Revenue growth rate

• How to use it. Your revenue growth rate reflects your business’s financial health, indicating success or stagnation. For instance, a 20% revenue growth suggests successful product launches or marketing campaigns. Negative revenue growth, on the other hand, may indicate that you need to reevaluate your business model.
• How to calculate it. Subtract the revenue of the previous period from the current period’s revenue. Next, divide this amount by the previous period’s revenue, and multiply by 100 to obtain a percentage.
• Formula. Revenue growth (%) = [(Current revenue − Previous revenue) / Previous revenue] × 100

Repeat purchase rate (RPR)

• How to use it. RPR helps you understand how many customers are returning to your product after making a first purchase. This is particularly useful for businesses with quick repeat buys, like consumer packaged goods. Use this metric to understand whether customers have returned to your product or moved on to a competitor. High RPR indicates satisfied customers who have developed an affinity for your product.
• How to calculate it. Divide the number of repeat customers by your total number of customers.
• Formula. RPR = Customers who make repeat purchases / Total number of customers

Net Promoter Score (NPS)

• How to use it. NPS measures customer satisfaction and the likelihood of referrals. Many businesses rely on word-of-mouth referrals to attract new customers, making your NPS a valuable metric for assessing marketing efforts.
• How to calculate it. Using customer survey data, subtract the percentage of detractors (scores 0–6) from promoters (scores 9–10).
• Formula. NPS = % Promoters − % Detractors

Bounce rate

• How to use it. A bounce rate measures how many website visitors leave after visiting a single page. A high bounce rate indicates poor user experience or irrelevant content in your ecommerce store. High bounce rates often run hand-in-hand with poor sales performance. To correct this, optimize your landing pages and pepper them with calls to action (CTAs)—like “Add to cart” or “Sign up now.”
• How to calculate it. Divide the number of single-page sessions by total website visits and multiply by 100 to obtain a percentage.
• Formula. Bounce rate = (Single-page sessions / Total website visits) × 100

Customer churn rate

• How to use it. Churn rate measures how many customers you’re losing in a particular period. A high churn rate means you’re losing customers—too many to be offset by the number of customers acquired during the same period. High churn is particularly problematic for subscription-based services that often have high customer acquisition costs with the expectation that customers stick around. Identifying churn causes, such as poor customer support or unmet expectations, can help you reduce customer loss.
• How to calculate it. Divide the number of customers lost during a period by the total customers at the beginning of that period.
• Formula. Churn rate = Customers lost during a specified period / Total customers at the start of that period

Email open rate

• How to use it. Your email open rate tracks the effectiveness of email campaigns, and subject lines and targeting influence this. This email marketing metric can provide valuable insights about what messages and products resonate with customers.
• How to calculate it. Divide the number of opened emails by the total number of emails sent and multiply by 100 to get a percentage.
• Formula. Email open rate = (Opened emails / Total emails sent) × 100

Customer retention rate

• How to use it. Customer retention rate measures the percentage of customers who stay over a given period of time. A high retention rate indicates strong user engagement and a pricing model that works for your core customers. If your rate is low, you can experiment with new business tactics—such as holding more sales or employing a customer success team—and track progress over time.
• How to calculate it. Subtract the number of new customers acquired from the total number of customers at the end of a period. Then, divide that amount by the total number of customers at the beginning of the period. Finally, multiply by 100 to obtain a percentage.
• Formula. Customer retention rate = (End customers − New Customers) / Starting number of customers

Monthly recurring revenue (MRR)

• How to use it. If you run a subscription-based business, use MRR to track how much profit you generate over a given period for a snapshot of your financial stability. For instance, a monthly subscription box service with 1,000 customers paying $20 each generates an MRR of $20,000. To boost your MRR growth rate and generate more revenue in the same timeframe, increase your number of subscribers or raise your average revenue per user.
• How to calculate it. Multiply your total number of active subscribers by your average revenue per user (ARPU) per month.
• Formula. MRR = Active subscribers × ARPU

Annual recurring revenue (ARR)

• How to use it. ARR is particularly useful for companies where customers sign annual contracts like SaaS licenses. If your subscriber base remains the same between the beginning and end of the year, you can calculate ARR by multiplying your MRR by 12. However, if you have subscriptions for varying durations, and lose or gain new customers mid-year, you may want to adjust for that. An increase in MRR and ARR can be key indicators of increased customer loyalty, which is crucial for potential investors analyzing your business performance over time.
• How to calculate it. Multiple your active subscribers each year by the average revenue per subscriber for the year. If you have a stable subscriber base, multiply your MRR by 12
• Formula. ARR = MRR × 12

Monthly burn rate

• How to use it. Your burn rate measures how much money you’re losing every month. Burn rate is a critical metric for ecommerce startups monitoring their financial health and runway. Say your business spends $50,000 monthly but earns $40,000. This means your burn rate is $10,000, requiring you to dip into existing cash reserves or borrow from a bank or investors. A high monthly burn rate signals the need for operational cost reduction or revenue growth.
• How to calculate it. Subtract your total monthly expenses from your monthly revenue. 
• Formula. Burn rate = Monthly revenue − Monthly expenses