(This is a guest post from our friends over at, 121eCommerce, a seasoned Magento Professional Partner and web development agency specializing in B2B and B2C eCommerce.)
If you run an online store, chances are you have your eyes on a lot of KPIs. From return rates to bounce rates, cart abandonment, conversion rates, AOV and more – there’s a lot to keep track of.
So what’s the most important KPI to keep your eye on?
It’s none of the above.
It’s RPV. Revenue Per Visitor.
Measuring and optimizing this metric is one of the best ways to grow a better eCommerce business. To help you understand what RPV is and why you should care, we’re going to cover:
- What is RPV?
- Why does RPV matter?
- How do you measure RPV?
- How RPV can help you track the success of your eCommerce store.
- How RPV can help you discover areas to improve upon in your eCommerce store.
Let’s dive in!
What Is RPV?
RPV is a metric that combines both the Conversion Rate (CR) and Average Order Value (AOV) for more precision. Essentially, it combines two of the most commonly-used eCommerce metrics:
- Conversion rate (CR), which measures the percentage of visitors to your website who “convert” into customers by making a purchase.
- Average order value (AOV), which measures the average value of every order placed on your website within a specified period of time.
By combining both of these metrics, you can address the shortcomings of each one – and get a better idea of the overall health of your eCommerce store.
Why Does RPV Matter?
So, why use RPV at all? Why does it matter, and why shouldn’t you just rely on CR and AOV to measure your store’s success?
The problem with just relying on the CR and AOV metrics to measure the success of your eCommerce store is that both measurements have some critical limitations.
Conversion rate, for example, is usually calculated by the number of total visitors divided by the total customer purchases. If 100 customers visit your website and 5 make a purchase, your conversion rate is 5%, for example.
Sure, this measurement is good at tracking purchases – but it weighs all purchases equally. It doesn’t let you dig more deeply into how much revenue each customer is providing for your store.
In other words, if a customer “converts,” and buys a product, each conversion is treated equally for the purposes of measuring CR – whether it was $10 purchase or a $1,000 purchase. This can make it hard for you to track how much customers are actually spending.
Average order value can help address this issue, by measuring the average amount spent on each purchase at your website. AOV is calculated by dividing your dollar value of sales by your total number of purchases.
As an example, if you sell $150,000 of merchandise in a month across 775 purchases, your AOV is about $193 – that’s how much is spent, on average, on a purchase at your store.
But AOV has its limitations, too. It doesn’t track conversions from each visitor – so while it can complement CR, it can’t replace it entirely.
How Can I Measure RPV?
By using a composite of both your CR and AOV metrics, which are both relatively easy to collect, you can address the limitations of each KPI – and you get RPV, which is a great, at-a-glance indicator of the health of your store.
To calculate RPV, you need to take the total revenue you earned in a specific period – say, a month – and divide it by the total number of visitors who came to your website.
For example, if you made $200,000 in sales in June, and you had 7,500 visitors to your website during that month, your RPV would be about $27.
Essentially, this shows you the correlation between your AOV and your CR – and puts a monetary value on each visitor to your website, eliminating the limitations of both of those KPIs, and providing you with a better overall “at-a-glance” method of measuring your performance.
How RPV Helps You Track The Success Of Your eCommerce Website
One of the best uses of RPV is as a general “canary in the coal mine” for your website. If you implement a new feature or redesign your website, for example, a corresponding rise in RPV may indicate that your efforts were a success – and that you are bringing in more customers.
Similarly, a boost in RPV can indicate that your sales and marketing efforts, such as paid online ads, SEO, and other such marketing campaigns, are bringing in qualified buyers.
Using RPV To Determine Areas Of Improvement For Your STore
On the other hand, a drop in your RPV can also indicate serious issues. Perhaps your marketing efforts are bringing in unqualified buyers, who visit your website and then leave immediately – reducing your RPV.
Another common reason for a drop in RPV is website performance issues. If your website is loading slowly, your bounce rates and cart abandonment rates will both soar – resulting in a lower RPV.
Whenever you notice a drop in your RPV, that’s a sign that something is wrong – and it’s up to you to figure out the cause, and get your online store back on track.
Start Tracking RPV In Your eCommerce Store Now – Keep Your Finger On The Pulse Of Your Store!
While RPV is not the “be-all, end-all” of eCommerce KPIs, it is a powerful metric which can help you track the overall success of your online store.
A steadily-rising RPV means that you’re becoming more competitive in your eCommerce niche and that you are making the right moves towards growth – while a decreasing RPV may indicate that it’s time to take another look at your website, your marketing efforts, and the overall health of your online store.
About the Author
Ben Chafetz is CEO of 121eCommerce, an eCommerce web development agency specializing in B2B and B2C. They are a Magento Certified Professional Partner with a proven track record of M2 launches, project rescues and complex website builds. With a knack for quick communication, detailed reporting, and a friendly staff, they offer a full stack of Magento services to drive your online growth.