There are numerous metrics to track and measure the performance of your eCommerce business. We understand that it can sometimes be difficult to know what metrics to monitor, especially the ones that show revenue.
Paying attention to your website’s Revenue Per Visitor (RPV) is useful as a starting point. RPV gives you the full picture of how much revenue each visitor generates for your business. RPV helps you understand the behavior of potential shoppers visiting your website.
What is Revenue Per Visitor (RPV)?
Revenue per visitor (RPV) is an important business metric used by eCommerce companies to measure the amount of revenue your business generates each time a customer visits your website.
It is calculated by dividing the total revenue by the total number of visitors to your website during a period of time.
RPV = Revenue / Visitors
For example, if your revenue from July to September is $30,000 and your site receives 5,000 visitors during the quarter, your RPV would be
Revenue Per Visitor (RPV) = $30,000 / 5000 or $6.
Why is Revenue Per Visitor Important?
RPV tells you if your eCommerce strategy is actually working especially, in terms of sales growth. By understanding how much revenue value each visitor brings, you can fully understand where to direct your efforts.
Although other important ecommerce metrics help to track your online store’s revenue, RPV is more insightful and helps check the blind spots created by crucial metrics like conversion rate and average order value (AOV).
Conversion rate and AOV provide accurate but incomplete data. Plus, analyzing each metric in a silo can lead you to make poor business decisions.RPV helps you complete the picture.
Let’s look at how these metrics work.
Conversion Rate
The conversion rate is calculated by dividing the number of visitors to your website who complete a purchase in a specified period of time.
Conversion Rate (CR) = Total number of conversions / Visits * 100
If your website gets 1000 visitors in one day and 20 visitors checkout after buying products, then the conversion rate is 2%.
Ideally, tracking conversion rate alone would not be a problem if the product (or products) sold were of the same price. But most ecommerce sites are selling different products of unique value.
For example, the French luxury goods conglomerate, Cartier, sells a wide mix of products across different price points; the website gets daily traffic of 1000 visitors.
| Product Type | Price | Conversions | Revenue | CR |
| Fragrances | $33 | 10 | $330 | 1% |
| Watches | $2610 | 1 | $2610 | 0.1% |
A conversion rate of 1% for a deodorant spray worth $33 is poor, but for a watch worth thousands of dollars, a one percent conversion rate is highly desirable.
Although fragrances have a higher conversion rate, increasing the number of conversions further won’t guarantee revenue growth.
In an effort to boost the conversion rate, you decide to offer a 15% discount on fragrances. This might convert more customers but will cause overall less revenue.
The conversion rate treats every purchase the same, which is myopic. You could negatively affect AOV and lower overall revenue.
Learn how we helped Cartier achieve a +10% conversion rate lift
Another crucial ecommerce metric – average order value (AOV) can underpin the value conversion rate by measuring your website’s performance.
Average Order Value (AOV)
AOV tracks the average dollar value each time a shopper places an order on your website. To calculate the AOV, divide the total revenue by the number of orders.
Average Order Value (AOV) = Revenue / Orders
For example, your online sales for the month of August were $25,000, and you had 1000 orders. $25,000 divided by 1000 orders = $25; Augusts’s AOV (or the average order made per visitor) is $25.
It is a key performance indicator that online retailers measure to understand customers’ purchasing habits and how much a business earns per visitor.
Tracking conversion rate alone does not accurately demonstrate your website’s business performance. A website with a lower conversion rate but higher AOV could drive more revenue. The inverse is also true for tracking AOV independently.
| Fragrance ($33) | Watch ($2610) | Fragrance ($33) | Watch ($2610) | |
| AOV | $1100 | $1210 | ||
| Conversions | 110 | 80 | ||
| Revenue | $121,000 | $96,800 | ||
Why Use Revenue Per Visitor?
Ecommerce businesses need to see conversion rate and AOV together to understand what is working and not working for the company’s overall sales.
Conversion rate and AOV are closely related, although they may seem different and distant. Conversion rate reveals the ‘number of sales’ and AOV shows the ‘dollar value behind each sale’. Both are key to understanding the total revenue earned by your business.
Revenue Per Visitor is a composite metric that couples conversion rate and average order value to create a singular value – breaking down silos between the two eCommerce metrics.
We know that
RPV = Total revenue / Total number of unique visitors
Total revenue = conversions x AOV
RPV = (conversions x AOV) / Total number of unique visitors
And, conversions / total number of visitors = conversion rate
RPV = conversion rate x AOV
The revenue per visitor helps you to evaluate your conversion efforts and see which strategies are working.
A positive RPV indicates that your marketing efforts are in the right direction, while a decrease in RPV can show an inflow of unqualified traffic or a problem in the customer journey.
It can be competitor ads on your website redirecting your visitors to competitor websites, coupon extension abuse, cart abandonment issues, or any performance issue with the website.
How to Increase RPV?
We can increase the revenue per visitor by either increasing the number of visitors to your website (conversion rate) or by increasing the amount spent by each visitor (AOV). Popular methods of increasing AOV include:
- Bundling, cross-selling, and upselling additional products and services.
Suggesting popular items that pair well with items in the shopper’s cart. For example, a pair of socks for a pair of shoes.
- Providing free shipping. This motivates higher purchase amounts while creating goodwill among price-conscious customers.
Experiment with ways to boost AOV through a free shipping threshold (not too high but nearby your AOV to ensure you can afford to ship items for free).
- Recognizing shopper hesitation and offering real-time one-to-one messages to encourage shoppers to complete their purchase.
BrandLock’s one-to-one messaging solution, Engage, understands users’ onsite behavior to deliver the right message to the right shopper at the right time.
This helps brands entice shoppers with a reason to spend more, increasing AOV. Engage holistically understands each shopper’s intent in real-time along with prioritizing company goals such as increasing AOV or protecting margins.
Our client, a leading footwear and apparel company, increased its AOV by 20% by using one-to-one messages.
- Apply a set discount on minimum order values. This not only helps you increase the AOV but also helps to ensure the cost of shipping the order is worthwhile for your business.
To improve the conversion rate, evaluate options for reducing the friction in the sales funnel. In other words, think of ways that will create a seamless on-site experience and make the customer journey efficient for customers.
Obtaining more conversions from existing web traffic will also help marketers ease their efforts in managing their acquisition channels.
To optimize your website for RPV, schedule a free consultation with our experts and learn how we can increase your website’s revenue by 5% to 10%.
