Top 5 Performance Marketing Metrics For Ecommerce Brands

If you’re running an ecommerce brand, chances are you’re juggling a lot -  product, fulfillment, customer support, creative, and of course, marketing.

But when it comes to performance marketing, too many brands obsess over the wrong metrics. Vanity metrics like ROAS might make you feel good, but they won’t help you grow profitably & sustainably.

At BlendAI, we believe in data that drives decisions. In this blog, we break down 5 of the most important performance marketing metrics ecommerce founders should track - so you can scale profitably, confidently, and with clarity.

1. Customer Acquisition Cost (CAC)

What it is: How much you’re spending to acquire one customer.

Formula:

CAC = Total Marketing Spend / Number of New Customers

Why it matters: If you don’t know your CAC, you don’t know how much you can afford to spend to grow. It’s your north star for sustainable scaling.

💡 Pro tip: Monitor CAC across channels - Facebook, Google, TikTok - to spot what’s working and what’s burning cash.

2. MER (Marketing Efficiency Ratio)

What it is: A holistic view of your marketing efficiency across all channels.

Formula:

MER = Total Revenue / Total Marketing Spend

Why it matters: MER shows you how efficiently your entire marketing budget is driving revenue. Unlike platform-specific metrics or ROAS, it reflects real-world performance and takes all channels into account.

📊 Blend AI tip: We love MER for its simplicity and honesty. It cuts through attribution noise and shows real business impact. We recommend you measure it closely and consider it heavily when scaling.

3. Lifetime Value (LTV)

What it is: How much a customer spends with you over their lifetime.

Formula:

LTV - Average Order Value × Purchase Frequency × Retention Period

Why it matters: If your CAC is $60 but your LTV is $300, that’s a great trade. If your CAC is higher than LTV - you’re losing money and need to re-evaluate immediately. A high LTV means you can afford to outspend competitors to acquire customers and increase your brand’s profitability by influencing repeat purchases.

💭 Remember: You did all of that hard work acquiring the customer, make it easier for yourself and influence repeat purchases.

4. Conversion Rate (CVR)

What it is: The percentage of users who purchase after visiting your website or clicking on your ad.

Formula:

CVR = (Conversions / Sessions or Clicks)

Why it matters: You can have a great Link Click Through Rate (CTR) on your ads, but if your landing page or checkout is leaky, your funnel will underperform. By looking at your CVR and ad performance metrics separately you’ll be able to figure out where the improvement is needed. Either your ads are poor, your website is poor or your targeting is way off.

🛠️ Fix the funnel: Use heatmaps, A/B tests, and Conversion Rate Optimisation (CRO) tools to plug the leaks in your path to purchase. For a great free heatmap and screenrecording tool, try Microsoft Clarity.

5. Contribution Margin

What it is: The percentage of revenue that remains after covering variable costs, which contributes to covering fixed costs and generating profit.

Formula:

Contribution Margin (%) = [(Revenue – Variable Costs) / Revenue]

Why it matters: A healthy contribution margin is crucial for profitable growth. It shows how efficiently your business turns sales into actual profit, beyond just covering production and delivery costs. A strong contribution margin gives you more breathing room to invest in marketing, operations, and growth initiatives without sacrificing financial health.

💸 Efficiency matters: Focus on optimizing product pricing, reducing variable costs, and improving operational efficiency to maximize your contribution margin.

Examples of variable costs:

• Product costs (ingredients, packaging, manufacturing)
• Shipping and fulfillment costs
• Credit card/payment processing fees
• Customer discounts and refunds
• Commissions paid per sale

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Tracking the right performance metrics isn’t just about reporting - it’s about making smarter, faster decisions that actually grow your ecommerce business and being able to spot the areas of weakness along the customer journey. With tools like Blend AI, the guesswork is gone and the attribution is clean.