E-Commerce Metrics – Page 2

Customer Acquisition Cost (CAC) is the cost a business incurs to acquire a new customer. This includes the fully loaded costs associated with sales and marketing to attract a potential customer and to convince them to purchase, divided across all new customers.

Customer Lifetime Value (LTV) represents the total net revenue a business can reasonably expect to generate from a single customer account throughout the entire duration of their relationship. This metric goes beyond simple transaction analysis by incorporating customer retention patterns, purchasing frequency, and profit margins to provide a comprehensive view of customer economic value. LTV serves as a cornerstone metric for strategic decision-making, enabling businesses to optimise acquisition spending, prioritise retention efforts, and identify high-value customer segments that drive sustainable growth.

Customer Retention Rate is the percentage of existing customers a business keeps from one period to the next, excluding newly acquired customers.

The number of sessions where the user was meaningfully active. A session counts as engaged if it lasted longer than 10 seconds, included a conversion event, or had at least 2 page or screen views. This metric represents GA4's approach to measuring quality engagement rather than simply counting all sessions regardless of user behaviour. By filtering out sessions that show minimal interaction, Engaged Sessions provides a clearer picture of sessions where users demonstrated genuine interest in your content or offerings, making it a more reliable indicator of successful user experiences than total session counts.

Engagement Rate is a key metric used in web and app analytics to measure user interaction and the quality of user sessions. It is a modern alternative to the traditional Bounce Rate metric, particularly in Google Analytics 4 (GA4). Engagement Rate is calculated as the percentage of engaged sessions out of the total number of sessions. An "engaged session" is defined as a session that lasts longer than 10 seconds, has a conversion event, or has two or more page views or screen views. This metric provides a more nuanced view of user behaviour than Bounce Rate, helping businesses to understand how effectively their content or platform holds a user's attention and drives meaningful interaction.

Fill rate is the percentage of customer orders fulfilled immediately from available stock, without backorders or lost sales. It measures inventory efficiency, demand forecasting accuracy, and supply chain reliability, and is a key indicator of customer satisfaction and operational performance.

GMROI is a retail and supply chain metric that measures how much gross profit a business earns for every dollar invested in inventory. It combines profit margin and inventory turnover into a single number, helping retailers identify which products and categories generate the strongest return on their inventory investment.

Inventory Turnover measures how often a business sells through its entire inventory within a given period. It is a key efficiency metric used to evaluate pricing strategy, product demand, and purchasing decisions, and is especially critical for businesses handling perishable goods.

Net Profit Margin shows net profit as a percentage of total revenue. It gives the net profit earned for every dollar of revenue generated and is a good indicator of profitability and operating expense management.

On-Time In-Full (OTIF) delivery rate measures the percentage of orders delivered both on the promised date (or within the agreed time window) and complete with all requested items in the correct quantities. It combines punctuality and completeness into a single metric that reflects successful order fulfilment from the customer's perspective.

Payment Refund Rate is the percentage of successful payments that are refunded within a given time period. While refunds and chargebacks both result in money being returned to the customer, they are fundamentally different: refunds are voluntary and merchant-initiated, whereas chargebacks are involuntary, initiated by the customer’s bank, and typically incur additional fees and risk penalties.

Perfect Order Rate measures the percentage of orders that are delivered without any errors, such as missing items, incorrect quantities, or damaged goods. It reflects the overall accuracy and quality of order fulfillment. The Perfect Order Rate (POR) is an essential supply chain metric that measures the effectiveness of an organization’s order fulfillment process. It is calculated by determining the percentage of orders that are executed flawlessly, without any errors or issues. Considered from a customer's perspective, a perfect order is one that arrives on time, contains the right items in the correct quantities, is delivered to the right place, and is accompanied by the correct invoicing.