Our beloved tech folk like to throw around a lot of TLA’s (Three Letter Acronyms) especially when it comes to eCommerce, but when it all boils down… you ultimately want to know if the site is profitable.
Typically we talk about terms such as AOV (Average Order Value) and CR (Conversion Rate) but these alone don’t give you an accurate indication of site profitability.
In a nutshell, RPV measures the revenue that your site generates per visit. Simple, right?
While many merchants continue to rely on conversion rate (CR) as their primary eCommerce site metric, revenue-focused eCommerce should focus on RPV as the most reliable yardstick for how well a site performs.
RPV is a composite metric that combines conversion rate (CR) and average order value (AOV) into a single metric.
In essence, CR and AOV are best viewed as factors that contribute to the growth or decline of RPV. By looking at them as forces that interact, you can find combinations that may contribute to CR or AOV in different ways but ultimately create lift in revenue… which is what matters most.
Sometimes these forces work together as you would expect, as they did with this merchant who experienced across-the-board positive results:
Sometimes you might increase your site CR (Conversion Rate) but experience a loss in overall revenue which is why RPV is so important as it takes into consideration the AOV (Average Order Value).
In the same respect, if you are purely measuring a customers AOV (Average Order Value) you aren’t seeing the whole picture. AOV does not look at how many purchases were made, so it doesn’t give you the full story of how your revenue grows (or shrinks).
As in this example, AOV dropped but overall revenue increased due to a conversion rate increase, which is positive for overall site profitability.
To calculate RPV, simply divide the total revenue earned during a determined time period by the number of visitors during the same period.
RPV is one metric you want to pay close attention to, and something we at Online Visions focus on strategically with our eCommerce A/B optimisation tests.
If you want to take a look at some of the exciting new tests we are unveiling for new clients, head on over to https://www.onlinevisions.com.au/holiday-bundle/ and enter your details or simply email firstname.lastname@example.org to setup an introductory call.
You’ll get all the details you need to see if you qualify for site optimisation experiments under the new MOI initiative.
To find out more about the initiative, visit the website here → https://mobop.org/onvisli3
As your local partner agency, we can help you get started and on your way to higher conversions and more revenue.