Performance Metrics (FAQ)
PERFORMANCE METRICS
Performance metrics are measures that evaluate the performance of your advertising and website strategies. Also called “key performance indicators”, performance metrics form a dashboard to gauge the effectiveness of your current advertising and website strategies. They identify the “gap” between where you are today and where your business goals require you to be tomorrow.
Q: How to determine your Sales per Visit?
A: Use the following formula to calculate your Sales per Visit amount. Obtain the number of visits from the Visits Report for the same time period as the sales amount you use.
Sales per Visit = Total Amount of Money generated through Sales / Number of Visits
For example, if your sales for a specific week was $1,000 and your site received 200 visits that week, your sales per visit is $5.00.
$1,000 / 200 = $5.00
Q: What is ROI?
A: ROI comes from “Return on Investment”. To determine your ROI for an advertising campaign, multiply the Sales per Visit number by the number of visits generated by the advertisement and divide by the cost of the campaign.
ROI = (Sales per Visit x Visits from Newsletter Sponsorship) / Cost of Newsletter Sponsorship
Q: What is the Conversion Rate?
A: Your conversion rate evaluates: (1) the quality of the visitors attracted by your advertising strategies and (2) how satisfied your visitors are interacting with your website.Your conversion rate is calculated as follows:
Conversion Rate = Number of Sales / Total Number of Visitors
For example, if last month 1,000 visitors visited your website and 10 purchased your product, your “sales” conversion rate is 1.0%. For every 100 visitors to your website, 1% is satisfied.
Q: What is the Cost per Action?
A: Your “cost per action” is the advertising cost you pay for one completed action. As with your conversion rate, an action may be generating an email opt-in or producing a product sale.
Cost per Action = Advertising Cost / Total Completed Actions
For example, if last month you spent $1,000 on advertising to generate 2,000 visitors and 20 of them subscribed to your newsletter, your cost per action for a newsletter subscription is …
$1,000 ad cost / 20 subscriptions = $50.00 Cost per Action
