Resources
Growth Metrics, in plain English.
The numbers we use to see what is really happening in an e-commerce business: what each one means, why it matters and how to work it out.
Business metrics
The numbers your finance team already cares about. These decide whether marketing is working.
MER
Marketing Efficiency Ratio
- What
- Total revenue earned for every unit of marketing spend, across all channels.
- Why
- One blended figure that no single platform can inflate or double-count.
Total revenue ÷ total marketing spendnCAC
New Customer Acquisition Cost
- What
- The average cost of winning a first-time customer.
- Why
- Separates real growth from repeat orders you would have received anyway.
Total marketing spend ÷ new customersCAC
Customer Acquisition Cost
- What
- The average cost of winning any paying customer, new or returning.
- Why
- A useful baseline, though it flatters accounts that lean on existing customers.
Total marketing spend ÷ customersAOV
Average Order Value
- What
- The average revenue from a single order.
- Why
- Raising it lifts revenue without a single extra visitor.
Revenue ÷ number of ordersLTV
Customer Lifetime Value
- What
- The revenue a customer is expected to bring over the whole relationship.
- Why
- Sets the ceiling on what a new customer is worth paying for.
AOV × orders per customerLTV:CAC
Lifetime Value to Acquisition Cost
- What
- How many times over a customer repays the cost of acquiring them.
- Why
- Shows whether acquisition is building value or buying revenue at a loss.
LTV ÷ nCACPayback
Payback Period
- What
- How long it takes for a new customer’s gross profit to cover what it cost to win them.
- Why
- Tells you how quickly acquisition spend comes back as cash.
nCAC ÷ gross profit per customer per monthCM
Contribution Margin
- What
- What is left of revenue after product, delivery and marketing costs.
- Why
- The clearest test of whether growth is worth having.
Revenue − variable costs − marketing spendStore metrics
What happens between the ad and the order.
CVR
Conversion Rate
- What
- The share of visits that end in an order.
- Why
- A lift here makes every channel more efficient at once.
Orders ÷ sessions × 100RPV
Revenue per Visitor
- What
- The average revenue earned from each visit.
- Why
- Combines conversion rate and order value, so a test cannot win on one while losing on the other.
Revenue ÷ sessionsATC
Add-to-Basket Rate
- What
- The share of visits in which something is added to the basket.
- Why
- An early sign of whether the product page and offer are doing their job.
Sessions with an add-to-basket ÷ sessions × 100RCR
Returning Customer Rate
- What
- The share of customers who have ordered before.
- Why
- Shows how much revenue depends on an audience you already own.
Returning customers ÷ total customers × 100Platform metrics
Useful for day-to-day steering inside an ad account. Never the final scoreboard.
ROAS
Return on Ad Spend
- What
- The revenue a platform credits to itself for each unit of spend.
- Why
- A directional signal only. Platforms over-claim, so read it next to MER.
Platform-reported revenue ÷ platform spendCPA
Cost per Acquisition
- What
- What the platform says each conversion cost.
- Why
- Helps compare campaigns inside one platform.
Platform spend ÷ platform-reported conversionsCPM
Cost per Thousand Impressions
- What
- The price of a thousand ad views.
- Why
- Shows how expensive attention is, before creative has had any say.
Spend ÷ impressions × 1,000CTR
Click-Through Rate
- What
- The share of impressions that lead to a click.
- Why
- Indicates whether creative is earning attention from the right people.
Clicks ÷ impressions × 100Freq
Frequency
- What
- The average number of times each person has seen your ads.
- Why
- Rising frequency with flat reach is an early sign of fatigue.
Impressions ÷ reachiROAS
Incremental Return on Ad Spend
- What
- The return on sales that would not have happened without the ads.
- Why
- The honest version of ROAS, taken from a controlled test.
Incremental revenue ÷ spend
Want these numbers for your own store?
Tell us where you are and we will show you what yours look like.
Book a growth diagnostic