If you are looking for ways to grow your eCommerce business, consider RPV. RPV, or revenue per visitor, is one of the most important performance metrics to accelerate growth. A composite of conversion rate and average order value, RPV is critical to measuring the overall health of your site. RPV is also a useful metric for measuring the effectiveness of strategies to increase revenue. A positively trending RPV suggests that recently implemented strategies have been effective in increasing revenue. A negative RPV may indicate that a strategy needs to be modified.
Calculating your eCommerce site’s RPV is relatively simple. Divide the total amount of revenue earned in a time period by the total number of site visits in that period. For example, if your eCommerce site earned $20,000 in January and 4,000 people visited the site during that month, your RPV would be $5, or 20,000 divided by 4,000.
Average conversion rate, or the percentage of visitors who make a purchase divided by the total amount of site traffic, and average order value, the average amount a visitor spends when he or she makes a purchase, are also important metrics for optimization. However, the value of a customer’s cart can vary substantially. Therefore, measures that increase your conversion rate could inadvertently lead to a decline in revenues. Visitors may be spending less on average even if they are more likely to make a purchase.
Additionally, raising your average order value is not guaranteed to increase revenues, since fewer visitors may be making purchases. RPV therefore combines the best of both of these important metrics. RPV encompasses elements of both the proportion of site visitors who make a purchase and the average value of those purchases to produce a metric optimized to help increase revenue.
When strategizing how to improve your site’s RPV, think of two parts of the sales process: acquisition and conversion. Acquisition refers to where your website traffic comes from, while conversion measures the ratio of all site visitors who make a purchase. In order to raise your RPV, you can focus on three stages of acquisition and conversion: increasing your total number of site visitors, increasing the percentage of visitors who make a purchase, or increasing the amount of money that each visitor spends in total (or, ideally, all three).
First, tracking your conversion rate properly will allow you to measure the relative value of your customer acquisition channels, since some will perform better than others in producing actual sales revenue. Invest more in the best-performing channels, and consider cutting down on or rethinking customer acquisition channels that do not perform as well.
Second, to improve your conversion rate, think about ways to reduce friction along your sales tunnel. In other words, how can you make the process of making a purchase easier and more efficient for customers? Additionally, building trust in your brand and creating compelling marketing initiatives will help to increase the conversion rate.
Finally, tactics to raise the amount spent per visitor could include raising your prices, offering promotions for spending a certain amount (such as free shipping or future discounts), or having a more lenient return policy.
Different tactics will be the most effective for different eCommerce businesses. However, you should try a few key experiments to determine which tactics work best for encouraging your customers to increase their purchases. Such experiments can help optimize your site’s RPV.
Making the checkout process as efficient and painless as possible is one important way to optimize RPV. Offering multiple payment options such as PayPal, credit cards, and Apple Pay is one way to do so. Magento offers a number of different secure payment gateways to increase the efficiency of the checkout process for your customers and help lower the number of abandoned carts.
Shopping cart abandonment tests are another good way of getting at the potential sources of friction in your sales funnel. For example, a persistent cart — one that keeps its contents even if a customer leaves the site and returns later on — is one way to re-target a customer who is close to making a purchase.
Providing different avenues for customer service support, such as providing a phone number listed at checkout or a live chat option, can also facilitate customer completion of orders. Tools such as chat customer service bots or a frequently asked questions area on your site can also help you respond in a timely manner to customer questions and requests.
A Magento community project, the Mobile eCommerce Optimization Initiative, has allowed Magento system integrators to leverage the power of the community to analyze the best tactics for optimizing RPV for mobile eCommerce sites. These analytics have found that two Magento-enabled functions, PayPal Express buttons and a security icon at checkout, tend to increase RPV most dramatically.
Placing a PayPal Express button at various positions on a mobile page was found to increase RPV by 8.72% on average. The PayPal Express button facilitates easy and efficient checkout, with only two steps to complete a purchase. Likewise, adding a security icon to the checkout process, a relatively simple switch, allows shoppers to see that a site uses stringent security measures, which can increase their confidence in the site’s security. This shift yielded an average 17.37% rise in RPV for the mobile sites studied.
Additionally, a credit card auto-detect system, which offers optional auto-fill fields that automatically detect a customer’s credit card type based on the first four digits of the card number, can help convert customers into sales by making it easier to enter credit card information on a mobile screen.
Reach out to IronPlane’s Magento-certified team of experts to learn more about how we can help you develop and test strategies to optimize RPV for your eCommerce site. Schedule an appointment with our Magento development and programming team today to learn more.