Imagine a business selling eco-friendly home products through an online store. The business wants to measure its performance and identify areas for improvement using the following KPIs.
In the Ecommerce website we need to track the visitors who are comming into the website and purchasing the product that determines the conversion value . Conversion rate is the no of users visited /No of purchases
Conversion Rate=(Total Website VisitsTotal Purchases)×100
For Example ,
- Total Website visiters is 10000
- Total Purchase is 500
So the Conversion rate is *500/10000) *100 = 5% ,Which means the lowest conversion rate and so we need to identify the lowest conversion . We Investigate the same in the lowest conversion reasons . The below are the Insights of lowest Conversion
- The website speed and poor user experience
- Improve website speed, add trust badges, or offer limited-time discounts.
Customer Life Cycle Value
Customer Life time value is the The total revenue a business can expect from a single customer throughout their relationship.
CLV=AOV×Average Purchase Frequency×Average Customer Lifespan
Example ,
AOV = 10000, Purchase Frequency=5 times a Year, Customer Life Span = 2Years then CLV = 10000*5*2= 100000
Actionable Insights : Increase the cutomer loyality program or provide the offers to the customers .