Revenue per session (RPS) is often an overlooked metric in the ecommerce world, yet it holds significant potential for driving business improvements.
We are going to bring RPS to the forefront of your analytics strategy, show how it can be used to measure and enhance the effectiveness of your ecommerce site.
What is Revenue Per Session?
Revenue per session calculates the average revenue generated per session on your websiteβ¦. I know (basically what it says)
It provides a clear picture of how effectively your site converts visits into revenue, making it a valuable tool for assessing overall site performance and guiding optimization efforts.
👀 Here you can see Year over year, this site is nearly twice as efficient
Why Revenue Per Session Matters More Than You Think
RPS is particularly useful for:
- Comparing Performance Over Time: By tracking RPS over different periods, you can assess whether your site is becoming more effective at generating revenue.
- Evaluating Marketing Campaigns: RPS helps in determining which traffic sources are most profitable, allowing you to allocate marketing budgets more effectively.
- Guiding Split Testing and Iterative Improvements: RPS can serve as a benchmark for testing new site features, layouts, and offers to see if they enhance revenue generation.
Calculating Revenue Per Session
Example Calculation
Let's walk through a practical example. Suppose your ecommerce store generated $100,000 in revenue from 10,000 sessions in a month. The RPS would be:
SELECT
100000.0 / 10000 AS revenue_per_session; -- Result: 10.0
This means that, on average, each session generated $10 in revenue.
Using RPS for Strategic Decisions
- Breakdown by Traffic Source:
- Weekly and Yearly Comparisons:
- Comparing RPS on a weekly or yearly basis helps track performance trends over time. Hereβs an example query:
- Optimizing Marketing Spend:
- By maintaining a consistent RPS, you can ensure that your marketing spend is efficient. For example, if your RPS from Facebook ads is $10, you should aim to keep your cost per click (CPC) below this threshold to ensure profitability.
Enhancing RPS
To improve RPS, consider the following strategies:
- Upsells and Cross-Sells: Introduce upsell and cross-sell opportunities to increase the average order value.
- Site Efficiency: Optimize the user experience to make it easier for visitors to complete purchases.
- Targeted Offers: Use targeted offers and promotions to encourage immediate purchases within sessions.
What do you do about it?
By understanding and optimizing RPS, you can make informed decisions that enhance profitability of your store as a whole!.
Whether you're comparing performance over time, evaluating marketing campaigns, or guiding site improvements, RPS should be a key component of your analytics toolkit.