E-commerce performance analysis: 7 numbers every store owner should know
A performance analysis shows whether your marketing is creating profitable growth. The 7 key numbers are MER, nCAC, contribution margin, conversion rate, AOV, repeat purchase rate and LTV:CAC. Look at them together, not channel by channel.
What is a performance analysis?
A review of your store's marketing and sales data that shows where money is made and lost: ad accounts, the store itself, email and customer data.
The 7 numbers
MER (Marketing Efficiency Ratio)
Total revenue divided by total marketing spend. It's the most honest overview because it doesn't depend on each platform's attribution.
nCAC (new customer acquisition cost)
What it costs to win one new customer. If it rises every time you scale, you've hit a performance ceiling.
Contribution margin after marketing
What's left after cost of goods, shipping, fees and marketing. Revenue without margin isn't growth.
Conversion rate
The share of sessions that end in a purchase. Compare by device and traffic source.
AOV (average order value)
A higher AOV gives you room for a higher nCAC.
Repeat purchase rate
How many customers buy again within 90 and 365 days.
LTV:CAC
Customer lifetime value relative to acquisition cost. Use it to decide how much you can afford to pay for a new customer. A common investor rule of thumb is that LTV should be at least 3x CAC, measured on gross profit rather than revenue (Andreessen Horowitz). Treat it as a guideline, not a target: the ratio depends on how you calculate LTV and CAC.
How to run the analysis
- Pull 12 months of data from your store, ad platforms and email.
- Calculate the numbers month by month.
- Look for trends: does nCAC climb with spend? Is repeat purchasing falling?
- Prioritise the 3 actions with the biggest impact on contribution margin.
Why not just ROAS?
Platform ROAS overlaps between channels and often counts customers who would have bought anyway. See our article on what a good ROAS is.
Get a free analysis
Makerz offers a free analysis of your store. See also our framework and cases.
Try our free calculators for MER and break-even ROAS on the learning page.
What's the difference between ROAS and MER?
ROAS measures one channel's attributed revenue; MER measures total revenue against total spend.
How often should I run a performance analysis?
Track the numbers monthly and do a deeper review every quarter.
What data do I need?
Order data from your store, spend from every ad platform, email data and cost of goods.
What is a healthy LTV:CAC ratio?
A widely used rule of thumb is at least 3:1, calculated on gross profit rather than revenue.