Revenue Per Visitor (RPV): The Most Valuable Ecommerce Metric
You may have always kept a sharp eye on your key performance indicators (KPIs) but did you know that optimizing your revenue per visitor (RPV) can accelerate the growth of your ecommerce business?
If you’re looking for ways to improve RPV for your ecommerce site, read on and we’ll share some key changes you can make on your site today.
In this RPV ecommerce guide:
- What is RPV?
- Why is RPV important?
- Blind spots in conversion rate
- Blind spots in average order value
- How to calculate RPV
- Optimize your ecommerce site for RPV
- Keep optimizing your site for RPV
- Frequently asked questions
What is RPV?
RPV stands for Revenue Per Visitor. It’s a measure of each unique visitor who enters your ecommerce site, and their spend. RPV is considered the ultimate test of the health of your ecommerce shop.
Why is RPV important?
Revenue Per Visitor is a composite of two top ecommerce metrics – conversion rate (CR) and average order value (AOV). The combination of the two metrics shows you what’s driving revenue and eliminates the common blind spots associated with CR or AOV.
Using RPV gives you a better picture of how your ecommerce site is faring, as it provides interesting insights into customer behavior. Most visitors to your store might not buy anything – so measuring purchases made means you won’t be taking non-purchase visits into account.
By measuring the average spend per visitor you can try to raise that figure through optimization and testing – and perhaps some adjustments to your sales funnel.
Are there any drawbacks of RPV?
While many people can find it useful to measure RPV, it’s not always the most appropriate metric. This is largely because most website visitors will probably not make a purchase, therefore contributing a high proportion of 0 values to the revenue per visitor score. Many users find it more valuable to measure AOV (average order value) instead for, this reason.
Blind spots in conversion rate.
Conversion rate measures the percentage of visitors who make a purchase from your site.
The simple calculation is: total purchases divided by total customer visits.
This measurement tracks all purchases equally, regardless of the purchase price—which is where the blind spot of CR lies.
By weighing all purchases equally, CR falsely attributes the same conversion value to every customer (for example, a $2 purchase is considered the same as a $500 purchase), leading to incomplete sales data on a customer’s actual spend.
Blind spots in average order value.
Average order value fills some of the gaps of CR by measuring the average amount per purchase made on your site.
AOV is calculated as: the dollar value of sales divided by the total purchases.
It doesn’t, however, track purchases (conversions) made per visitor – therefore, AOV can’t entirely replace CR.
And that’s where RPV comes in.
How to calculate RPV.
To calculate RPV, simply divide the total revenue earned during a determined period by the number of visitors during the same period.
Say, for example, you earned $10,000 during the month of April and had 5,000 visitors during the same month. Your RPV for April would be $2 (or $10,000/5,000).
By accounting for both revenue and visitors, RPV provides a healthy pulse of your ecommerce business by uniquely taking into consideration both the number of visitors and spend in one metric.
Tracking RPV ecommerce metrics.
Use Conversion Rate Optimization (CRO) software to track RPV and other ecommerce metrics, so you can determine the best way forward for your customers – and your business.
Optimize your ecommerce site for RPV.
In the Mobile Optimization Initiative, a Magento Community Initiative, Magento System Integrators have been performing optimization experiments to uncover ways to improve mobile conversions.
By leveraging the power of community we can collectively and continuously test and optimize, at a pace and volume that individual merchants simply could not achieve. It’s uncovered some interesting findings related to RPV, and we encourage you to give some of them a try.
For instance, working with 12 System Integrators performing tests across over 60 merchant sites, we have found that two experiments, Security Icon on Checkout and PayPal Express Buttons, have presented the most dramatic RPV lift so far.
Top experiments for RPV lift:
- Security Icon on Checkout: +17.37% RPV lift
- PayPal Express on Mini Cart +8.72% RPV lift
Security icon and RPV.
Sometimes the simplest changes yield big results. In this case, we simply traded out the shopping cart icon for a security icon. Added to the checkout process, a Security Icon shows shoppers that the site they’re using follows stringent encryption security measures.
The use of the Security Icon had an enormous lift on mobile RPV. Given the pressing concern of security amongst mobile shoppers, the security icon appears to increase shopper confidence when making mobile purchases.
If your mobile RPV could use some help, this simple optimization experiment could decrease shopping cart abandonment and boost your revenue.
PayPal Express and RPV.
On mobile devices, ensuring a fast checkout process is critical. The application of the PayPal Express button had a positive lift on RPV when placed at various stages (cart, mini cart, and even higher up on the product details page) of the checkout process.
The PayPal Express button appears to address consumer desire for quick (and secure) shopping by simplifying the payment process and requiring only two steps to complete the purchase.
Keep optimizing your site for RPV.
Effective optimization strategies for ecommerce sites will vary from merchant to merchant. Look at all stages of the shopping experience and identify ways to improve conversions. Focus on RPV to measure your efforts and keep on experimenting.
Zee Aganovic is a serial technology entrepreneur and CEO of HiConversion. He thrives on solving onerous, real-life problems through innovative technology to help global brands transform their digital business. Zee co-invented one of the world’s first ASP-specific patents and holds both a master and doctoral degree in optimization theory from Rutgers University. The HiConversion ecommerce experience platform offers merchants the ability to pivot in the moment to drive results along the path to purchase.
Through integrated analytics and adaptive algorithms, we empower brands to uncover rich, actionable data about their sites and visitors—regardless of device—and act on what they learn in real time.
Our uniquely perceptive experimentation generates measurable results with less risk while uncovering valuable data insights that can guide brands along the path of continuous improvement. Find us on Facebook, LinkedIn, and Twitter.
Frequently asked questions.
How do I monitor ecommerce performance?
Monitoring performance is about deciding how your business defines success, how to accurately measure that, and working on improvements. To that end, the three steps involved are:
- Choose your key performance indicators (KPIs)
- Track your KPIs using analytics tools
- Analyze results and adjust where you can to monitor for potential improvements
How is ecommerce measured?
Ecommerce metrics can be revenue-driven, such as Conversion Rate or Revenue Per Visitor, or take a more analytical look at the site itself with measurements like Bounce Rate or shopping cart abandonment rate. Taking the logical steps to determine how you can try to bring up (or lower) performance based on the stats you’ve measured is key to raising revenue.
What are KPIs in ecommerce?
Key Performance Indicators are the metrics you use to assess the success of a store or a campaign. They help you define what tactics to try next in order to grow your business or shift more units of a particular product. Watch our guide to balancing competing KPIs.