marketing social media

Revenue = Traffic x Conversion Rate x Purchase Frequency x Average Order Value

Business revenue depends on four things, Traffic, Conversion Rate, Frequency, and Average Order Value. The ultimate combination of Traffic (T), Conversion Rate (CR), Purchase Frequency (F) and Average Order Value (AOV) results in more revenue.

Increasing T, CR, F and AOV should be your only aim if you want significant revenue growth. Other than this elementary formula, there’s no magic equation that will lead you to extraordinary results. This formula is the holy grail to achieve exceptional revenue.

Working on Traffic, Conversion Rate, Purchase Frequency & Average Order Value

Focus on attaining stable Traffic attracts viewers you can convert into customers. This will increase the Conversion Rate of your business. Furthermore, think about strategies and tactics to shoot up Purchase Frequency and Average Order Value.

And that’s it, you don’t need to worry about anything else.

For example:

  • You can improve traffic by working on UI/UX of your website
  • Better landing pages and consistent A/B testing will boost conversion rate
  • Strategies like product placement and upselling are ideal for average order value
  • Working on your customer services may better the purchase frequency
Revenue & conversion rate

The Outcome of Ignoring T, CR, F & AOV

If we’re talking just about revenue, then nothing comes close to the T x CR x F x AOV formula. Many business owners ignore this formula and opt for other hard & confusing aspects.

Businesses that don’t follow this killer-combo are often found lost. If you want revenue flowing in like a river, then you must concentrate on T, CR, F & AOV.

Track Traffic, Conversion Rate, Frequency, & Average Order Value when you are setting up your business. Give these metrics the importance they deserve and you’ll thank us in the future.

Write A Comment