Ecommerce KPIs: fewer of them, each one tied to a decision
A number you've agreed to run the business by. Plenty of shops track dozens of metrics and call them all KPIs, which is how none of them change anything.
- 071KPI (Key Performance Indicator)
- A measurable value that demonstrates how effectively a company is achieving key business objectives.
- Stands for
- Key performance indicator
- Differs from a metric
- A KPI has an owner, a target and a decision attached to it
- A good set
- Short enough to read on a phone, worked out the same way every month
A metric becomes a KPI when somebody acts on it
Your Klaviyo account reports dozens of metrics. Shopify reports dozens more. A KPI is the handful you've agreed matter, each with a definition, an owner and a decision it can change.
Here's a quick test. If a number moved sharply last month and nobody did anything differently, it wasn't a KPI. It was decoration.
Leading and lagging KPIs, and why you need both
Revenue lags. By the time it's down, the reason happened weeks ago. Leading numbers move first: clicks per send to your engaged segment, sign-ups from the site, the first-time buyers who come back for a second order.
| KPI | What it tells you | Leads or lags |
|---|---|---|
| Revenue per recipient | Whether sending more is earning more | Leads |
| Email's share of shop revenue | How much the business leans on email, against the shop's own total | Lags |
| Second order rate | Whether new customers come back | Leads |
| Customer lifetime value | What a customer is worth over a fixed window | Lags |
| Complaints and unsubscribes | Whether the list is being looked after | Leads |
Five is plenty for a monthly report. We'd put revenue per recipient at the top for email and customer lifetime value at the top for the business.
The vanity numbers that keep getting called KPIs
- List size, which grows fastest when nobody's cleaning it
- Open rate, which Apple's privacy feature inflates for you
- Total attributed revenue, with no window and no shop total beside it
- Followers, impressions and anything else nobody can spend
Each of those has a use. None of them belongs at the top of a report, because each one can rise while the business gets worse.
Write each KPI down before anyone reports it
One line per KPI: what it is, how it's worked out, over which window, from which tool, and who owns it. Then the target, set from your own last year, not from a benchmark built on somebody else's shop. An afternoon's work that saves a monthly argument.
It's also the quickest way to judge an agency. Ask for their KPIs and how each one is worked out, and listen to how long the pause is. Choosing an agency covers what a straight answer sounds like.
Related terms
FAQs
How many KPIs should an online shop track?
Fewer than you think. A founder needs a handful at company level, and each team a handful of its own that feed into them. If the monthly report doesn't fit on one screen, some of those numbers are metrics wearing a KPI badge.
What are the most important KPIs for email marketing?
For a shop, revenue per recipient, email's share of total revenue, the second order rate among new customers, and complaint and unsubscribe rates as the health check. Opens and list size belong further down, as warning lights, not as the numbers anyone gets judged on.
Should KPI targets come from industry benchmarks?
Rarely. A benchmark averages shops with different prices, products and list ages, so it can't tell you what's achievable for yours. Set targets from your own last year, adjusted for what you're changing, and use benchmarks as a sanity check at most.
Rather we explained it on your own account?
Bring your Klaviyo account to a growth consultation. We'll walk through what this means for your numbers, in plain English, and what we'd fix first.
Half an hour with Theo, our founder.
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