E-commerce Metrics Glossary
Comprehensive definitions of essential e-commerce metrics. Understand AOV, CLV, ROAS, and other key metrics that drive online retail success.
Revenue Metrics
Total Revenue
Definition: Sum of all sales over a specific period
Formula: Sum of all order values
Why it matters: Primary indicator of business growth
Average Order Value (AOV)
Definition: Average amount spent per order
Formula: Total Revenue ÷ Number of Orders
Why it matters: Indicates customer spending behavior and upselling success
Benchmark: $50-150 for most e-commerce stores
Customer Lifetime Value (CLV or LTV)
Definition: Total revenue expected from a customer over their lifetime
Formula: Average Order Value × Purchase Frequency × Customer Lifespan
Why it matters: Helps determine customer acquisition costs and retention strategies
Revenue Per Visitor (RPV)
Definition: Average revenue generated per website visitor
Formula: Total Revenue ÷ Total Visitors
Why it matters: Measures overall site effectiveness
Conversion Metrics
Conversion Rate
Definition: Percentage of visitors who complete a purchase
Formula: (Number of Purchases ÷ Total Visitors) × 100
Why it matters: Primary measure of site effectiveness
Benchmark: 1-3% for most e-commerce sites
Cart Abandonment Rate
Definition: Percentage of shoppers who add items to cart but don't complete purchase
Formula: ((Add to Carts - Purchases) ÷ Add to Carts) × 100
Why it matters: Identifies checkout process issues
Benchmark: 60-80% is typical (opportunity for improvement)
Checkout Completion Rate
Definition: Percentage of checkout starts that result in completed purchases
Formula: (Completed Purchases ÷ Checkout Starts) × 100
Why it matters: Measures checkout process effectiveness
Customer Metrics
Customer Acquisition Cost (CAC)
Definition: Total cost to acquire a new customer
Formula: Total Marketing Costs ÷ Number of New Customers
Why it matters: Determines marketing efficiency and profitability
Best Practice: CAC should be less than 1/3 of CLV
Returning Customer Rate
Definition: Percentage of customers who make repeat purchases
Formula: (Returning Customers ÷ Total Customers) × 100
Why it matters: Indicates customer satisfaction and loyalty
Purchase Frequency
Definition: Average number of purchases per customer in a time period
Formula: Total Orders ÷ Total Customers
Why it matters: Measures customer engagement and retention
Marketing Metrics
Return on Ad Spend (ROAS)
Definition: Revenue generated for every dollar spent on advertising
Formula: Revenue from Ads ÷ Ad Spend
Why it matters: Measures advertising campaign effectiveness
Benchmark: 4:1 (4x return) is considered good
Cost Per Acquisition (CPA)
Definition: Average cost to acquire one customer through a specific channel
Formula: Channel Marketing Cost ÷ Customers Acquired from Channel
Why it matters: Compares efficiency of different marketing channels
Email Open Rate
Definition: Percentage of recipients who open marketing emails
Formula: (Emails Opened ÷ Emails Sent) × 100
Why it matters: Measures email campaign engagement
Benchmark: 15-25% for e-commerce
Email Click-Through Rate (CTR)
Definition: Percentage of email recipients who click links
Formula: (Email Clicks ÷ Emails Sent) × 100
Why it matters: Measures email content effectiveness
Benchmark: 2-5% for e-commerce
Product Metrics
Product Conversion Rate
Definition: Percentage of product page views that result in purchases
Formula: (Product Purchases ÷ Product Page Views) × 100
Why it matters: Identifies best-performing products
Product Views
Definition: Number of times product pages are viewed
Why it matters: Indicates product interest and discoverability
Add to Cart Rate
Definition: Percentage of product views that result in add to cart
Formula: (Add to Carts ÷ Product Views) × 100
Why it matters: Measures product appeal and pricing effectiveness
Quick Reference Table
| Metric | Abbreviation | Category |
|---|---|---|
| Average Order Value | AOV | Revenue |
| Customer Lifetime Value | CLV / LTV | Customer |
| Customer Acquisition Cost | CAC | Customer |
| Return on Ad Spend | ROAS | Marketing |
| Cost Per Acquisition | CPA | Marketing |
| Revenue Per Visitor | RPV | Revenue |
Track What Matters
Understanding these metrics is the first step. Implement tracking and start making data-driven decisions.