Average Revenue per Visitor
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Revenue per visitor is a critical metric but not just for online retailers and advertising supported sites. Marketing sites can better understand their marketing efforts by estimating value based on conversion events and customer support sites can approximate revenue supported.
Definition
In general:
Sum of Revenue Generated / Visitors = Average Revenue per Visitor
Each business model will calculate revenue generated or supported differently:
• For retail sites the sum of revenue generated is easily calculated.
• Advertising-based sites can use the sum of advertising revenues generated or a calculation of average CPM times impressions served.
• Marketing sites focused on lead generation are encouraged to estimate the value of leads generated by comparing similar quality leads to past results.
• Customer support sites should ideally sum the amount of customer contract value supported by the site. For example, if you know that 100 people are getting support for a $100 product and 50 people are getting support for a $500 product, the sum of revenue supported would be 100 x $100 + 50 x 500 = $1,250,00
While the customer support case is obviously artificial it serves no less value for sites to track the value of visitors they support.
Presentation
As with other dollar-based KPIs, presentation should be fairly obvious. The only exception would be for the customer support model in which the indicator should be clearly titled “Average Revenue Supported per Visitor.”
Expectation
As you would expect, the more revenue per visitor you’re able to get, the better off you are. The obvious strategy for improving this performance indicator is to attract more valuable visitors to your web site. Consider using average revenue per visitor to critically examine each new visitor acquisition effort, segmenting as necessary, to determine whether different strategies are actually working.
Action
If this number drops off suddenly or precipitously likely the first call you should make is to your marketing department and the next to your operations group. Often times either a large group of unqualified visitors has been attracted to the site or something has gone wrong with your revenue realization path (e.g., your shopping cart is broken or your site is performing slowly, thusly reducing the number of advertising impressions you serve.)
This key performance indicator makes the list of “RED BUTTON” KPIs that, when they go wrong, should bring everyone to a screeching halt while the problem is diagnosed.
Posted Wednesday, July 13th, 2005 | 3 responses | Add a Comment | Share, Save or Email
