Key Metrics To Watch In Ecommerce Performance

We all say we’re “data-driven.” But if the only number you track is revenue…  You’re just revenue-driven. That’s like calling yourself a chef because you know how to eat. Revenue is the scoreboard. But to actually win the game, you need to track the plays that create it. Here are a few I watch closely: 1⃣ Customer Acquisition Cost (CAC) ↳ Protects margins and reveals if growth is truly scalable. ↳ Rising CAC without rising LTV = red flag. 2⃣ Customer Lifetime Value (LTV) ↳ Shows the real worth of a customer over time. ↳ Informs how much you can afford to acquire them in the first place. 3⃣ Conversion Rate by Funnel Stage ↳ Pinpoints exactly where prospects drop off. ↳ Optimizing here often costs less than buying more traffic. 4⃣ Retention Rate ↳ Growth gets easier when your base sticks around. ↳ Higher retention means compounding revenue without compounding spend. 5⃣ Attribution Quality ↳ Without reliable attribution, you’re guessing where sales come from. ↳ Bad data = wasted budget and wrong bets. Being data-driven is about having a full picture, not just the scoreboard. Revenue tells you the “what.” The rest tells you the “why” and “how.” What’s one non-revenue metric you’d never stop tracking? ♻ Share this to help more brands go beyond “revenue-driven.” Follow me, Francesco Gatti, for more on data, retention, and ecommerce growth.

Most eCommerce brands obsess over revenue and ROAS. But the real game is in the metrics no one talks about. Here are 10 overlooked KPIs that actually drive growth (and how to optimize them): ~~ 1. LTV:CAC Ratio (The Ultimate Health Check) LTV:CAC = Customer Lifetime Value ÷ Customer Acquisition Cost 1:1 = You’re bleeding money 3:1 = Healthy 5:1+ = Printing cash If you’re below 3:1, either: ✅ Lower CAC (better targeting, UGC ads, referrals) ✅ Increase LTV (subscriptions, upsells, memberships) == 2. 90-Day Repurchase Rate If a customer doesn’t buy again within 90 days, they probably won’t. Fix it by: • Winback campaigns with targeted incentives • Selling bundles that create habits • Building a loyalty program that rewards repeat buyers == 3. Contribution Margin (What’s Actually Left?) CM = Revenue – (COGS + Shipping + Discounts + Ad Spend) If your CM is under 30%, you’re scaling a business that won’t survive. Get margins up by: • Cutting discount dependency • Negotiating lower fulfillment costs • Adding Onward shipping protection == 4. Subscription Churn Rate (The Silent Killer) High churn = your brand is a leaky bucket Fix it by: • Adding pause & skip options via SMS (Skio for example) • Add more delivery options and product variety • Sending an email 7 days before renewal reminding them potential lost perks == 5. Time to Second Purchase (T2P) Track how long it takes for a customer to place their second order—then cut that time in half. Tactics to speed it up: • AI-based Email/SMS flows with hyper-targeted recommendations • Exclusive discounts for second-time buyers • Reorder reminders based on average usage time == 6. Gross Margin per Order (The Scaling Checkpoint) At scale, 40%+ gross margins keep you profitable. If you're below that: • Increase prices (test 10% bumps) • Reduce discounting, do Cashback instead (@ Onward) • Negotiate better supplier terms (carrier rates, 3pl, etc) == 7. Refund & Return Rate A high return rate = a CAC multiplier. Fix it by: • Charging for returns (but offering free exchanges) • Clearer product descriptions & sizing charts • Post-purchase emails on how to use the product == 8. Organic vs. Paid Revenue Ratio If 60%+ of your sales come from paid ads, you’re in trouble. Brands with real staying power win on organic channels. The fix? • SEO & content marketing • Affiliate & referral programs • Retention tactics (VIP, loyalty, subscriptions) == 8. SKU Concentration Risk If 80%+ of your revenue comes from one product, you’re vulnerable. Great brands expand without overextending. Turn one-time buyers into multi-SKU customers with: • Bundles • Exclusive add-ons • Subscription perks == 9. % of Revenue from Returning Customers A healthy DTC brand makes 40%+ of revenue from repeat buyers. If you’re below that, focus on LTV levers: • VIP memberships • Personalized email/SMS offers • Post-purchase nurture flows Follow Josh Payne for deep dives on DTC, SaaS, and investing.

Top Metrics Every #Ecommerce Company Should Answer - Average Order Value of First Order vs. Recurring Order: Since e-commerce usually struggles with retention, use the Average Order Value (AOV) of the first order to calculate the ROI on ads. Focus on making that first transaction count! - Likelihood to Order Again by Order Occurrence: Measure the probability of a customer making a second purchase and the likelihood of a fifth order after a fourth, etc.... This helps identify where the drop-offs are and determine when customers become loyal. If it takes four orders to hook a customer, then focus on getting to 4 orders and ignore the rest. - 3-Month, 6-Month, and 9-Month LTV by First Product and Order Size: Track the Lifetime Value (LTV) over time based on the initial product purchased and order size. This helps assess the combination of order value and retention, revealing which products drive the highest LTV. Ensure that initial spending isn't too low (risking negative marketing ROI) or too high (which can decrease LTV). - Media Mix Percentage for First Buyers: Determine if your first-time customers are influenced by multiple ads, whether they return organically, or if they switch platforms. This insight is crucial for fine-tuning performance marketing strategies for new customers. (Also can save your data teams months on building a complex media mix attribution that is not needed) - Spend on Converted Customers: With cookies constantly being reset, keep updating your list of converted customers. Despite the promises of Meta and Google, converted customers often still see ads. Ever wonder why you keep seeing ads for products you already bought? These metrics provide significant insights quickly, offering the biggest impact for your e-commerce strategy. What metrics do you find helpful? What am I missing? React with 💡 if you like this kind of content, and I'll share more insights across different industries. #ecomm #data #metrics #bestpractices #ltv #roi

CMOs call marketing an engine for growth. CFOs call it a primary lever of enterprise value creation. One speaks in brand equity, customer acquisition, engagement, and monetization.  The other speaks in margins and profitability. When these departments don’t align,  ↳ Investments get slashed,  ↳ Performance stalls,  ↳ Growth suffers. But when marketing and finance work with UNIFIED language and data.   Companies make smarter investments. Here are four key metrics that help CMOs and CFOs speak the same language: 1. Customer Acquisition Cost (CAC) Formula: Total marketing spend ÷ New customers acquired CFOs ask, “How much are we spending per new customer? Can we lower it?” CMOs ask, “Which channels bring most efficiency, can we shift our budget?” CFOs want cost control, CMOs want better-performing channels.  ↳ Tracking CAC aligns both executives. 2. Customer Lifetime Value (LTV) Formula: (Avg. Purchase Value × Purchase Frequency × Margin Rate × Activity Rate) CFOs ask, “Are we making enough long-term revenue to justify CAC?” CMOs ask, “Should we increase LTV through engagement or monetization?” A CFO sees it as profitability over time, A CMO sees opportunities. ↳ Higher LTV justifies marketing investment. 3. Cash Payback Period Formula: CAC ÷ Gross Margin per Customer per Month CEOs ask, “How long before we earn back what we spent?” CMOs ask, “Which channels pay back fastest?” CFOs want liquidity, CMOs want reinvestment speed. ↳ A shorter payback period means faster growth cycles and less financial risk. 4. LTV:CAC Formula: Customer Lifetime Value ÷ Customer Acquisition Cost. CFOs ask: "Our financial plan requires a 3x ROI in 3 years-can you deliver?" CMOs ask: "Should I optimize for faster payback or a 3-year LTV:CAC target?" CFOs want financial justification, CMOs want strategic growth. ↳ A shared LTV:CAC view aligns investment decisions. CFOs and CMOs don’t need to agree on everything,  but they do need to align on the data that drives GROWTH. Start with blended performance, Then look at leading indicators for Paid. The last thing you want is debating attribution with a CEO or investor, When you're not even aligned on the core metrics above. Don't manage marketing as an expense,  Manage it as an investment. Track the right numbers, speak the same language, and watch your business grow. Which of these metrics does your company focus on the most? Drop a comment below. * * * I talk about the real mechanics of growth, data, and execution. If that’s what you care about, let’s connect.