eCommerce Web Analytics: Vanity vs. Actionable Metrics

You log into your computer and notice an increase in Facebook followers, which gives you a moment of satisfaction. But when you check your orders… there’s nothing. Despite your growing follower count, you’re not seeing the sales you expected.

As an eCommerce business, your focus should be on profit — not just follower numbers or other superficial metrics. So why spend time tracking numbers that don’t impact your bottom line. These are what we call “vanity metrics” — metrics that look good but don’t offer actionable insights.

In this post, we’ll focus on the key eCommerce metrics that really matter: actionable data that you can use to make informed decisions. These are the eCommerce web analytics that will help you evaluate whether your business is truly on the path to growth. Let’s dive in.

What Are eCommerce Web Analytics?

First of all, let’s clarify what we are talking about. “Web analytics” is collecting, processing and analyzing data in order to draw conclusions which will allow us to optimize our business strategy. This definition presents some key points:

• Collecting data: the first step for the analytics is finding the relevant data to weigh up the strategy’s evolution. We can use specific tools for that (we will take a look at some of them). 
• Processing: in most cases, these tools provide us with but the metrics, which give no useful information on their own. Because of that, processing is necessary (for example, finding a percentage by comparing two or more metrics).
• Analyzing: the heart of this process. Once you have the necessary data, they must be reviewed in order to confirm whether you are closer to accomplishing the goals set with your strategy. 
• Drawing conclusions: the last step is to encapsulate the information we drew about our strategy’s evolution in a document (a report) along with the actions to be taken next. For example, if you find your eCommerce’s average sales are low, you will need to find possible ways of improving it.

We will look more into this later. But first…

Why Are eCommerce Website Analytics Important?

Let’s be clear about one thing: if you don’t keep track of what is happening with your eCommerce, you are blinding yourself. A good analytics process allows you to:

• Better understand your ideal customer: what products they are interested in, why are they, or aren’t they, buying, how long does it take them to decide on a purchase, how many times do they abandon their cart, etc. It is similar to scanning their buyer persona.
• Optimize your marketing campaigns: with the previous information, you can choose acquisition channels to boost, which products to highlight, and what kind of promotions are most successful.
• Improve the buyer experience for your eCommerce: analyzing also allows you to learn if, for example, something on your website is hampering the purchase.

In short, thanks to web analytics, you can improve both your sales and your eCommerce’s profitability.

The Difference Between Web Analytics and Insights

Before you dive into analyzing your website’s data, it’s important to grasp a key concept:

Data on its own — regardless of how comprehensive or varied it is — doesn’t provide much value. The real power lies in knowing how to interpret that data and extract actionable insights from it.

Here’s an example to illustrate the point: imagine you see that the average bounce rate across different browsers is 60%. But when you look closer, you notice that Firefox has a bounce rate of 91%. At first glance, this figure doesn’t seem to tell you much. However, what it actually reveals is something critical: there might be a design or usability issue specifically affecting Firefox users, causing them to leave your site prematurely.

This is where web analytics come into play. Their job isn’t just to present raw numbers; it’s to dig deeper into the data to uncover the underlying issues or areas for improvement.

Once you understand the difference between raw data and actionable insights, you’re ready to explore which metrics are worth tracking and which ones are best avoided.

Vanity Metrics vs. Actionable Metrics

You can’t have too much of a good thing; it is normal to get excited when you see a spike on traffic. The problem is when we focus the whole analysis on just one of these metrics, that means nothing more than a pat on the back. This type of metric is known as a vanity metric in the eCommerce field. 

These are some examples:

• Number of followers of Twitter.
• Facebook likes.
• Number of visits to your website.
• Number of clicks on your products’ cards.

These metrics look awesome on paper, but don’t add any value to the analysis. What’s the point of knowing the number of visits to the shop, if we don’t know where they are coming from or the percentage that end up buying? On the other hand, there are important metrics that actually interest us.  The so-called actionable metrics:

• They help us make decisions.
• They have a clear cause-effect relationship.
• We have influence over the cause.
• They are relevant for our business.

We already know that the “vanity metrics” are dangerous and that what we really want to analyze is the information that gives us real value. Let’s find out then, what those metrics are.

Actionable Web Analytics for eCommerce

In order to be able to have the data on everything that we are going to explain, you need to have Google Analytics.

a. Basic metrics

Every online shop that sells products should monitor and analyze, at least, the following data:

Web Traffic Analysis for eCommerce

eCommerce relies on traffic. The more visits you get, the more likely you are to attract new clients and improve your sales. But look out. The goal is not getting views indiscriminately, but to find qualified traffic.

That means bringing to your eCommerce users with a profile akin to your ideal client’s, who, therefore, could have an interest in your products.

Web traffic can be classified in two main categories:

• Organic traffic: views you don’t have to pay for. These are obtained through acquisition channels such as SEO or content marketing (which offer results in the long term, but are very profitable).
• Paid traffic: that means that you pay a certain amount per each view your web gets. The most obvious example is that of on-line advertising. The best thing about this strategy is that it lets you improve sales in a short term, but in exchange for profitability.

A healthy eCommerce strategy seeks a balance between both types of traffic.

Important Note: As we mentioned earlier, the number of visits alone is a vanity metric. By itself, it doesn’t tell you if your business is succeeding. However, when combined with other metrics, it becomes part of a bigger picture that provides valuable insights. It’s like building a house: you can’t do it with just bricks, but you need the bricks to get started.

Lead Capture

Imagine 1,000 people visit your eCommerce site each day. While some may make a purchase, many others will leave without buying anything. Maybe they just wanted to read a blog post or compare products. If visitors leave without providing their contact details (such as subscribing to your newsletter), there’s no guarantee they’ll return. This is where lead capture comes into play.

Leads (also known as potential clients) are visitors to your web who left their contact information. Like their e-mail or phone number. Once they are in your database, you can use different strategies like e-mail marketing in order to get those potential clients to make a purchase.

However, a person typically will not just give you their e-mail. Because of that, it interests them if you offer some kind of lead magnet.

Conversion Rate

The main metric for eCommerce is the percentage of visits that end up buying. As we have seen, vanity metrics on their own don’t add any value, but when crossed with another, they do (in this case, visits/sales).

In Spain, the average conversion rate is about 1%, depending on the field. That is to say, one out of a hundred visitors ends up making a purchase. We often spend too much effort on increasing traffic when the actual key factor is optimizing the conversion rate.

Average checkout price

How much money does a person spend on average when buying from your eCommerce?  This is a piece of data that not many people take into account, but it is crucial. For example, we need it to measure the return of marketing actions.

By crossing the average checkout price with the conversion rate and the cost of every campaign we can optimize the cost on advertising. 

Customer Acquisition Cost (CAC)

This is what we pay, on average, to get a new client. It is obtained by adding all the SEO, SEM, content marketing, and advertisement expenses and then dividing the figure by the number of new clients obtained through those strategies.

Acquisition expenses/New clients = CAC

Notice that all these metrics are even more valuable when combined. If we know both the average checkout price and the CAC of every traffic source, we can optimize the attraction expenses. Let’s see an example so you can understand it better: Imagine that the CAC for every new client that comes from Facebook Ads is €15 and the average checkout price is €20. 

It will depend on your profit margin and taxes but it seems like this is not the best traffic source since the clients are costing you more money than what they spend. 

On the other hand, if the CAC for Google Adwords is €5 and the average checkout price is €20… it seems pretty obvious that you should invest more in Adwords than in Facebook Ads. We want every cent we invest to generate as much as possible!

Retention rate

Everyone always talks about getting more views and attracting new clients, but what about the ones you already have? How many of them make another purchase? That is exactly what the retention rate measures: a metric that lets you know whether you are managing to retain your client’s loyalty over a given period.

Because a recurring buyer is much more profitable than a new one. A person you already attracted, who is familiar with your business and buys from it over and over. That way you gain back what you spent in order to make them your client. This has a lot to do with our next item.

Customer Lifetime Value (CLV)

Customer Lifetime Value is the net economic value contributed by a person to your eCommerce during the period of time in which they buy from you.

That is to say, this metric tells you the average benefit a client leaves you (deducting the investment needed to attract and keep them or even get them back). The more time a client spends being loyal to your business, the more profitable they will be and the higher their CLV.

Cart abandonment rate

A buying process that takes too long or has hidden costs normally turns into an abandoned cart or, in other words, in a non-completed sale. Even though the checkout is becoming easier and easier, there will always be someone who will not complete the purchase. We can’t avoid it, but we should know the percentage. An abandoned cart rate that is too high may mean that the buying process is too difficult or that there are distracting elements in the way. 

In addition to detecting this kind of problem, it allows us to implement remarketing actions. This is about sending or showing the clients a new offer to incentivize them to complete the purchase. It is sometimes more profitable to invest in remarketing than in getting new clients.

”No Results” Searches

A high “no results” rate in your site search means users are looking for products you don’t show—whether due to missing inventory or poor tagging. Fixing this helps recover lost sales and improves user experience instantly.

Return On Investment (ROI)

One of the most important metrics for an eCommerce. Return On Investment tells you what benefit you have obtained thanks to a specific marketing action at a given point in time.

Ideally, when calculating this, you should also consider the Customer Lifetime Value, in order to weigh up the profitability of your marketing strategies over a period of time. This is explained in depth in this article.

b. Web Analytics Metrics depending on the eCommerce maturity

Although all the metrics that we have seen are very important, you will have to value some of them more than others depending on your eCommerce’s stage.

1. Young eCommerce

A newborn shop is unknown. There are no sales without traffic, therefore it is time to grow and gain visibility. Growing strategies will mean social networks, content marketing, and so on. Therefore, these are the metrics that you should take into account:

• Number of visits: we are looking for constant growth (always prioritizing qualified traffic).
• Subscribers: if we offer that option. Remember the advantages of sending a newsletter in an eCommerce.
• Shared content: here are different options. In this post, for example, there are ideas to create a Facebook course (a very interesting strategy to gain visibility) and, in this one, we talk about different strategies to attract followers and sell through Instagram.
• Opinions and evaluations: social proof for eCommerce is especially important when you are still unknown.

Don’t forget that most of them are vanity metrics. We have to work on them at the beginning, but the actionable metrics remain just as important.

2. Intermediate maturity

Once we have generated some good traffic, we have some sales, and we are tracking and analyzing the basic metrics, it’s time to add some new ones that will allow us to grow faster:

• Navigation flow: are the visitors landing on the Home page or in the categories? What’s the path followed up until the sale completion? Would an exit pop-up or some kind of push notification be useful?
• Duration of the session: how long do users stay in your shop? Which are the most read pages?
• New traffic vs. Recurrent traffic: it is important to know if the sales are coming from new visitors or users who had already visited the shop. That way, you will know if your strategies to attract and maintain clients are working.
• Bounce percentage: what is going on to make users leave so fast? Low loading speed? Is the product cards copywriting unclear or not persuasive enough?

As always, by using Analytics we will monitor all these metrics with the different traffic sources, devices, or even browsers. This way we will be able to get all the information hidden behind the data.

3. Consolidated eCommerce

Once our shop is already up and running and the sales funnel is working, we should focus on optimization. These are the metrics for this stage:

• Client satisfaction: through surveys or a follow-up after the sales (read this post). Take these customer service metrics into account too.
• Lifetime value: it is used to calculate the total value of a client over time.
• Return on investment time: it allows us to know how long it takes to recuperate the money invested on a new client (CAC).

Google Analytics lets you analyze and combine hundreds of metrics, but don’t forget that you should first define which ones are relevant for your business. If you don’t, you will be wasting your time. 

c. Cohort analysis 

Last, but not least, we are going to take another step forward when analyzing an eCommerce by analyzing cohorts. A cohort is a group of clients that have some characteristic in common. For example, those who bought the same day, during a sale, on Black Friday…

The cohort analysis is about carrying out a follow-up of that group of clients during a period of time:

• What did they do during the following months?
• Did they buy again?

Although this is just in the Beta phase, Analytics allows you to analyze cohorts by date of acquisition. It is really useful to evaluate the offer you gave them. 

Imagine that you offered a 40% discount on Black Friday, selling almost without a profit. The cohort analysis will let you know if the sales on that day brought new sales during the following year. If the income obtained through those new clients is bigger than what you lost that Black Friday, it was worth it.

Conclusions: Why Tracking Web Analytics is Essential

Running an online business without tracking web analytics is like navigating without a map. Without understanding the data, you won’t know what’s working and what’s not.

By measuring key eCommerce metrics like conversion rates, customer acquisition costs, and lifetime value, you can make data-driven decisions that lead to growth and profitability. Without tracking these metrics, you’re essentially spending money without knowing if you’re making any. Make sure to track the right metrics to grow your eCommerce business efficiently and effectively!