5 Metrics Every Shopify Merchant Should Track to Boost Revenue
Apr 1, 2025
Running a successful Shopify store requires more than just listing products and driving traffic. To maximize revenue and profitability, merchants need to focus on the right key performance indicators (KPIs) to track, analyze, and optimize their store’s performance. By keeping an eye on these critical metrics, you can make data-driven decisions that lead to higher conversions, better customer satisfaction, and increased revenue.
Here are five essential metrics that every Shopify merchant should monitor to boost revenue and enhance customer experience.
1. Average Order Value (AOV)
Average Order Value (AOV) measures the average amount a customer spends per order. It's a key metric that helps merchants understand customer purchasing habits and identify opportunities to increase revenue without acquiring new customers.
How to Calculate AOV:
Why AOV Matters:
Increases Revenue: A higher AOV means you're generating more revenue from each transaction.
Reduces Acquisition Costs: Since acquiring new customers can be costly, increasing AOV helps boost revenue from existing customers.
How Account Editor Can Help:
Account Editor boosts AOV by allowing merchants to add post-purchase upsells on the Thank You and Order Status pages. By showcasing complementary products after a purchase, you can encourage customers to add more items to their order, increasing their total spend.
2. Conversion Rate
Conversion Rate measures the percentage of visitors who complete a desired action on your Shopify store, typically making a purchase.
How to Calculate Conversion Rate:
Why Conversion Rate Matters:
Indicates Store Performance: A higher conversion rate means that more visitors are turning into paying customers.
Identifies Bottlenecks: A low conversion rate could signal friction in the buying process or issues with product pages.
Tips to Improve Conversion Rate:
Optimize product pages with clear descriptions and high-quality images.
Offer limited-time promotions to create urgency.
Enable post-purchase editing with Account Editor to give customers confidence in modifying their orders if needed.
3. Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) estimates the total revenue a customer is expected to generate over their lifetime. It’s an essential metric for determining how much you should invest in customer acquisition and retention.
How to Calculate CLV:
Why CLV Matters:
Informs Marketing Spend: Knowing your CLV helps you decide how much you can spend to acquire new customers.
Encourages Retention Efforts: Retaining high-value customers can significantly impact overall revenue.
Pro Tip: Use post-purchase upsells and smart cancellations through Account Editor to extend the customer’s lifespan and increase repeat purchases.
4. Refund & Return Rate
Refund and Return Rate indicates the percentage of orders that are returned or refunded. High return rates can erode profits and indicate customer dissatisfaction.
How to Calculate Refund & Return Rate:
Why Refund Rate Matters:
Highlights Product Quality Issues: A high return rate may signal problems with product descriptions, quality, or customer expectations.
Affects Profit Margins: Frequent returns can cut into your bottom line.
How Account Editor Helps:
With Account Editor’s Smart Cancellations, you can reduce returns by allowing customers to cancel or modify their orders post-purchase. You can also apply restocking fees to reduce unnecessary refunds and cancellations.
5. Cart Abandonment Rate
Cart Abandonment Rate tracks the percentage of users who add items to their cart but leave before completing the purchase.
How to Calculate Cart Abandonment Rate:
Why Cart Abandonment Rate Matters:
Identifies Friction Points: High cart abandonment could signal problems with your checkout process.
Directly Impacts Revenue: Lowering cart abandonment leads to more completed purchases and higher revenue.
Pro Tip: Reduce cart abandonment by enabling order edits and self-service modifications using Account Editor to give customers more confidence when placing orders.