Using KPIs for E-Business Success

The term E-business covers the complete sphere of departments …

SimpleKPI Icon By Stuart Kinsey

2 Minute Read
KPIs icons on retail labels

What is E-Business?

The term E-business covers the complete sphere of departments, activities and actions needed to sell goods or services online, such as marketing (both online and offline), stock control, SEO, finance, customer services and more. The term differs from E-Commerce which is really used to describe any kind of selling that uses the internet as the main means of exchange.

Most E-businesses fall into a specific profile based on their target customers, for example the most common are business to consumer and business to business models, however there are four distinct models that are associated with E-Business:

  • B2B. This model focuses on the selling of products or services from one business to another, hence the B2B, offering primarily other services or materials that other companies need in order to operate.
  • B2C. or Business to consumer is used to refer to the business model of selling from a business to a consumer. Originally a catch all phrase for any type of transactions, both online and offline – it's now more commonly associated with online retail transactions to customers.
  • C2B. In contrast to B2C models, Consumer to business relies on consumers creating value and businesses consuming that value. For example, bloggers, vloggers, review sites offering advertising, or a designer offering stock photos through an intermediary.
  • C2C. Customer to customer environments allow for customers to interact with each other for goods and services, normally through an intermediary website. A good example of this model would be eBay where an online auction hooks up potential sellers and buyers.

What are E-Business KPIs?

E-Business KPIs or Key Performance Indicators are designed to cover the complete spectrum of actions, interactions, departments and supporting activities that all contribute to the success of your E-Business. E-Business KPIs are designed to track and monitor the performance of these overlapping areas in one simple to measure set of performance metrics.

Why are KPIs important for E-Businesses?

With online models the conversion rates can be quite staggering, according to BigCommerce the average conversion rate is between 1% to 2% , and even with every element of your product or service running smoothly, breaking through a 2% conversion ceiling is tough.

That's why measuring E-business KPIs is so important. They are a crucial element that show how your business is doing, how it's achieving success, and more importantly where you need to improve and where you need to track your performance using KPIs.

Measured correctly, KPIs can provide an E-Business with valuable insights that can improve conversions, increase revenue and spot opportunities for growth. Here are just a few ways:

  1. Increase conversion rate: Increasing conversion rates will inevitably increase the number of sales you make. It's a simple metric to track and one that provides real tangible cash in the bank.
  2. Increasing average order value: Encouraging your customers to spend more or up-selling based on their purchase choices is another great way to add to the bottom line.
  3. Reducing Customer Complaints: Bad press, particularly in an unforgiving world of Social Media has the capability to sink an E-business, fast. Reducing Customer Complaints not only reduces the risk but improves the chances that the same Social Media will endorse your products, win win.

Focusing on E-Business KPIs

To say E-Businesses generates lots of data is somewhat of an understatement. The sheer volume is staggering. When dealing with such an endless amount of data it's best to break it down into manageable categories and from there focus on a limited number of key areas within each. For example, the following list of KPIs for each category has been designed to focus on aspects of performance that cover the majority of E-Businesses.


Average Order Value (AOV)

Average Order Value (AOV) measures the total value of every order or subscription by the total number of customers over a given period. This KPI is important to measure not just to increase revenue but it's also a key metric that helps in deciding marketing budgets and advertising initiatives.

Unique Website Visitors

Tracking Unique visitors will help you understand visitor volumes, trends and more importantly where they come from. Enabling you to plan promotions, increase advertising or provide insights into potential opportunities.

Bounce Rate

Traditionally seen as a Bad metric, bounce rate simply addresses the percentage of visitors that stay on the same page they landed before leaving. Bounce rate varies widely per industry, however tracking this KPI can offer indications as to both good or bad content or user experience.

Sales Volume

Volume of your sales or services is clearly key to your success. More volume more revenue. But monitoring Sales volume using segmentations such as location can help you both unlock opportunities for growth and focus your marketing messages more effectively.

Cart Abandonment

The percentage of visitors who add items to the shopping basket but abandon the process before completing the transaction. This KPI acts as an important early warning system for problems with the payment process but also wider design and usability problems that need addressing. Aiming to investigate and improve this rate will simply generate more revenue.

Customer Acquisition Cost

Customer Acquisition Cost (CAC) is the total costs or expenses it takes to acquire a customer. This KPI is made up by calculating every cost associated with sales and marketing divided by the number of customers. This KPI is sometimes tracked as a Ratio. It is an essential KPI for E-Businesses to understand the relationship between costs and customers.


As with any business, keeping a grip on expenses is an ongoing battle between speculative investment and realistic cashflow. Viewing Expenses as a KPI with a target and goal will help keep outgoing costs in focus alongside a clear financial plan.

Customer Lifetime Value

This KPI is designed to calculate the projected revenue that a customer will generate during their lifetime relationship with your business. Within SaaS and subscription-based models CLV is an important metric that can help indicate the stickiness and continued evolution success of your product. Calculating this KPI is vital in marketing budget planning and providing a glimpse into the financial future to spend more confidently in product investment.

Learn more about how to track KPIs for your business on Dashboards and Reports.

Stuart Kinsey portrait

by Stuart Kinsey

Stuart Kinsey writes on Key Performance Indicators, Dashboards, Marketing, and Business Strategy. He is a co-founder of SimpleKPI and has worked in creative and analytical services for over 25 years. He believes embracing KPIs and visualizing performance is essential for any organization to strive and grow.

Get started with your KPI Software

Get started for free