KPI stands for a key performance indicator. While a metric is any quantified measurement, a KPI is an important metric. These are the numbers that you track for growth. While site visits may be important, orders could be your KPI. Usually, a handful of critically important numbers is how you’re being evaluated. These are your KPIs.

1. Organic acquisition traffic

In the long run and in a blue sky, you hope to attract people to your site without paying for them. It follows that it’s important to measure how many of your visitors reach the site organically, which is commonly available in all analytics platforms.

2. Average Order Value (AOV)

The AOV is a measure of how much your customers typically spend on a single order from you. You calculate AOV by dividing total revenue for a period by the total number of orders completed during that same period. If you sell $50,000 of products today and that revenue was created by 250 orders placed by customers, then your AOV is 50,000/250 or $200 per order.

3. Conversion Rate (CR)

Probably the most important among all e-commerce metrics. Conversion rate is calculated by this formula: CR = (Total number of customers / Total Unique Visitors) * 100. This is how many visitors convert into customers. One of the most common problems of e-commerce entrepreneurs is getting tons of traffic and no sales at all. Driving traffic to your site isn’t everything. Once people land there, they need a lot of persuading to place an order. The product and price, the experience, the payment security, and the return options should all feel right — as well as the brand, of course. Conversion is basically how successfully you turn visitors into customers. The process of improving this metric is called conversion rate optimization (CRO). Regularly check your sales funnel, the visitor behavior on site, page views, and exit pages to identify where the problem is and hopefully fix it.

4. Monthly Revenue

Denote the total amount of money that is being received by the company after trading its products or service with its customers.

5. Average Purchase Frequency (AFP)

Average Purchase Frequency is the number of times that a customer makes a purchase in a given period of time. In research, understanding how often a consumer purchase within a given category gives a sense of their engagement.

6. Gross Margin (GM)

Gross margin is net sales less the cost of goods sold (COGS). In other words, it's the amount of money a company retains after incurring the direct costs associated with producing the goods it sells and the services it provides. The higher the gross margin, the more capital a company retains, which it can then use to pay other costs or satisfy debt obligations. The net sales figure is gross revenue, less the returns, allowances, and discounts.

7. Customer Lifetime Period (CLP)

Average retention time is The Retention Rate is the percentage of people who continue to use your app over a given period of time (week, month, or quarter).

8. Customer Lifetime Value (CLV)

One of the biggest marketing mistakes you can make is to view your customer base through the lens of one sale only. The CLV metric takes a big-picture approach. It views customers through the lens of how much revenue they will produce for your company over the entire course of your relationship with them. To find the CLV, multiply the average order value by the average purchase frequency rate and the average customer lifespan. If your customers spend an average of $200 per order, place five orders per year, and continue to order from you for ten years, then your average CLV is 200 x 5 x 10 = $10,000. Remember, you’re seeking an average number, not an exact number.