An ecommerce founder can drown in dashboards. Ad platforms, web analytics, Shopify, email, each tool spits out dozens of numbers at you. In the end you look at many and understand few. The problem is almost never a lack of data, it is not knowing which ones genuinely tell you whether the business is healthy.
The good news is that the metrics that matter are few, and they answer two questions: am I making money on each customer? and am I growing sustainably? Here are the ones you should review, grouped and explained.
The golden rule: measure in profit, not revenue
Before the list, the most important thing. Revenue, the platform's gross ROAS, is a metric that looks good in a screenshot, but it does not tell you whether you make money. You can invoice a lot and lose on every order. That is why, at STRAT, we measure in profit, with POAS as the focus instead of ROAS, and we look at every number through the margin.
With that lens on, the metrics stop being a wall of figures and become a dashboard that tells you what is happening and what to do.
The profitability metrics, the ones that really rule
They are the heart of the business. If you could only look at one group, it would be this one:
- POAS. It measures the profit on ad spend, so it tells you whether a campaign genuinely makes you money, not just revenue. We develop it in what POAS is.
- Contribution margin. The basis of everything. It is what is left of each sale after the variable costs, and without this figure no other profitability metric can be interpreted well.
- CAC (customer acquisition cost). What it costs you to acquire a new customer. Your maximum profitable CAC depends on your margin and your LTV.
- LTV (customer value). What a customer leaves you across their whole relationship with you. Measure it in margin, not revenue, as we explain in how to calculate LTV.
- LTV:CAC ratio. The health metric par excellence. The usual reference is 3 to 1. Below that, you pay too much to acquire; far above it, you may be underinvesting and leaving growth uncaptured.
The acquisition metrics
They tell you how efficient your acquisition of traffic and sales is:
- ROAS. Useful as an operational day-to-day filter, but with two cautions. Always read it against your break-even ROAS (1 divided by your margin), and remember it measures revenue, not profit. We explain it in depth in what counts as a good ROAS and in how to improve it.
- CPA. What you pay for each order obtained. It makes sense when you read it alongside the AOV and the margin, not on its own.
- CPM (cost per thousand impressions). What it costs you to reach a thousand people. It is a thermometer of how expensive the auction is, so a rising CPM warns you of more competition, of audience saturation, or of high season, before the problem reaches the ROAS.
- CTR (click-through rate). The percentage of people who click on your ad. It mainly measures whether your creative connects, so a falling CTR is usually the first signal of creative fatigue, or of a message that no longer grabs.
Your store's metrics
They measure what happens when the traffic reaches your website:
- AOV or average order value. How much a customer spends on average per order. Raising it improves your ROAS and your LTV without needing more traffic, as we see in what AOV is and how to increase it.
- Conversion rate. What percentage of visits ends up buying. An improvement here raises the ROAS without touching a euro of spend, because you make better use of the traffic you already pay for.
- Purchase frequency. How many times a customer buys from you in a period. It is the bridge between acquiring and retaining, and a direct driver of LTV.
The retention metrics
The most ignored, and among the most profitable, because retaining is cheaper than acquiring:
- Repeat-purchase rate, or returning customers. What share of your sales comes from people who had already bought from you. A healthy brand does not depend only on acquiring new ones every month.
- Churn. The rate at which you lose customers. Its inverse (1 divided by the churn) estimates the customer's average lifespan, which is exactly what feeds the LTV calculation.
Do not look at metrics in isolation
This is the mistake that costs the most money. A metric on its own almost always lies. A high ROAS without looking at the margin can hide losses, an AOV that rises through discounts can eat the profit, and an LTV that ignores the CAC says nothing. The strength is in the relationships: LTV against CAC, POAS over ROAS, ROAS against your break-even.
And a second warning: do not stop at the average. Look at the metrics by cohort and by segment, not just the global figure, because the average mixes very different realities into a single misleading number. What matters is not each stray figure, it is reading the whole system.
How often to review them
Not all metrics are looked at with the same frequency, and obsessing over the daily noise of the strategic ones is a mistake:
- Daily, the operational pulse: spend, sales, the day's ROAS or CPA. To spot whether something has broken, not to make deep decisions.
- Weekly, the creative, the conversion rate and the AOV, which move with your actions and are worth watching closely.
- Monthly, the strategic ones: POAS, CAC, LTV:CAC ratio and retention. They are the ones that genuinely tell you where the business is heading, and they need time to be read well.
Frequently asked questions
What are the most important metrics in an ecommerce? The profitability ones: POAS, contribution margin, CAC, LTV and the LTV:CAC ratio. They are the ones that tell you whether you make money on each customer, not just whether you invoice. The rest of the metrics serve to understand and improve these.
Which metric should a founder look at first? The contribution margin, because it is the basis of all the others. Without knowing what is left of each sale, you cannot properly interpret ROAS, LTV or CAC, nor decide how much you can pay to acquire.
ROAS or POAS, which should I follow? POAS as the star, because it measures the profit and takes your margin into account. ROAS serves as an operational day-to-day filter, always read against your break-even ROAS, but not as the main metric, because it measures revenue, not profit.
How often should I review the metrics? The operational ones (spend, sales, CPA) daily, only to spot problems. The strategic ones (POAS, LTV:CAC, retention) once a month, because they need time to be read well. Obsessing daily over the strategic ones leads to rushed decisions.
What is a good LTV:CAC ratio? The usual reference is 3 to 1. Below that, you are paying too much to acquire. Far above it, you may be underinvesting and leaving growth uncaptured. It is a reference, not a law, and it depends on your model and your margins.
Why is it not enough to look at revenue? Because revenue does not see the margin. You can invoice more than ever and be losing money on every order. That is why it is worth reading every metric in profit, with POAS, the margin and the LTV:CAC ratio as your real compass.
If you get lost among so many metrics and do not know which ones genuinely move your profitability, we will sort it out with you. At STRAT we define your real dashboard and connect each figure with the decision it triggers, both in paid media campaign management and in the email and retention programme, where the criterion is the profit left at the end of the month and not the figures that only look good in a dashboard.
