Strategy Centre

IRP Statistic Definitions

 
  
09 September 2014 13:00
  

Here are definitions for some of the most commonly-used statistics in IRP World.

Average Order Value

This is defined as the average monetary value of all orders in a single month. For each month, the AOV is calculated using the formula: Total Revenue (£) / Number of Orders. Growth is calculated using the formula: (Difference between Most Recent Month & Earlier Month / Earlier Month) * 100.

AOV can be analysed separately by device – Desktop, Mobile and Tablet.

Average Sale Price of Item

This is defined as the average price that products are sold for within a particular market or across all markets. For each month, the Average Sale Price is calculated using the formula: Total Revenue (£) / Number of Units Sold. Growth is calculated using the formula: (Difference between Most Recent Month & Earlier Month / Earlier Month) * 100.

Bounce Rate

This is generally defined as the percentage of visitors who click on an ad or a search engine result, get through to a website, but then leave after viewing only a single page. Google defines this as “the percentage of single-page sessions (i.e. sessions in which the person left a site from the entrance page without interacting with the page)”.

In email marketing campaigns, this statistic can also be defined as the number of emails that are undeliverable for some reason (for example, an invalid email address, a recipient’s inbox was full and so forth).

Checkout Abandonment Rate

Sometimes referred to as ‘Shopping Cart Abandonment Rate’, this is the number of visitors that leave a website during the checkout process. It is generally calculated as: (Number of Abandoned Shopping Carts / Number of Initiated Transactions (or Number of Completed Transactions)) * 100. Or more simply: 1 - (Number of Orders / Number of Shopping Carts Created) * 100. This can be further broken down into the different stages of the checkout process.

Click Through Rate (CTR)

This is calculated as (Read Emails / Sent Emails) * 100. In other words, the percentage of times that a recipient opens an email and clicks the link to get through to a website. This could also be the (Number of Clicks on an Ad / Number of Impressions of the Ad (sometimes 100 impressions)) * 100. More simply, this is sometimes defined as the number of times that a person clicks on an ad, or link, and gets through to a website.

Conversion Rate

This is defined as the percentage of visitors who become customers or, more precisely, the percentage of sessions that result in a sale. For each month, the Conversion Rate is calculated using the formula: Total Transactions / Total Sessions * 100. Note that sessions are used in this calculation and not visitors. Growth is calculated using the formula: (Difference between Most Recent Month & Earlier Month / Earlier Month) * 100.

Conversion Rate can be analysed separately by device – Desktop, Mobile and Tablet.

Cost Per Acquisition

This indicates how much it costs companies in terms of marketing spend to acquire a customer, expressed as a percentage. For each month, the CPA% is calculated using the formula: Total Marketing Cost / Total Revenue (£) * 100. Growth is calculated using the formula: (Difference between Most Recent Month & Earlier Month / Earlier Month) * 100.

Customer Lifetime Value

This is defined as the current average revenue generated by a customer over their lifetime of making purchases, up to the month in question. CLV is calculated using the formula: Total Revenue up to the month in question (£) / Number of Distinct Customers during that time frame (from the start of their IRP trading). This does not include customers who have signed up but never purchased – it includes only purchasing customers. Growth is calculated using the formula: (Difference between Most Recent Month & Earlier Month / Earlier Month) * 100.

Orders Fulfilled %

This is simply the percentage of orders fulfilled: (Total Number of Orders Made / Total Number of Orders Fulfilled) * 100.

Return Rate %

This is the percentage of returned orders: (Total Number of Orders / Total Number of Orders Returned) * 100.

Sales Growth

This is the percentage difference (positive or negative) between the Total Revenue (£) for the months selected for comparison. Growth is calculated using the formula: (Difference between Most Recent Month & Earlier Month / Earlier Month) * 100.

Total Discounts

This is the total monetary value of items sold at a discount in a single month. It is calculated as: (Discount Item 1 (£)) + (Discount Item 2 (£)) + (Discount Item n (£)). Also useful is Percentage Discounts – the percentage of all items sold that were sold at a discount in a single month (Total Discounts for Month / Total Sales for Month) * 100)). This provides an indication of how great a contribution discounted items make to overall sales.

Total Domestic Revenue

This is the total revenue generated from within a company’s home country.

Total International Revenue

This is the total revenue generated from outside a company’s home country.

Total Number of Sessions

This is simply the total number of sessions on a website. Conversion rate can be calculated off this value. A session is recorded when a visitor stays on a site (active or inactive) for up to a set period to time (often defined as 30 minutes).

Total Online Marketing Spend

This is the total amount of money spent on digital marketing. This is used when calculating the CPA% per channel and the overall CPA%.

Total Revenue

This is the total revenue figure for all the items sold. This is generally calculated as: Total price of all units sold * Total quantity of units sold. (This is separate from total profit which is: Total Revenue - Costs.) This can be analysed separately by device – Desktop, Mobile and Tablet.

Total Transactions

This figure represents the total number of purchases or orders that have taken place on a website. This can be analysed separately by device – Desktop, Mobile and Tablet.

Total Units Sold

This is simply the sum total of units sold to customers via a website. A ‘unit’ is generally defined as any single item that can be priced and ordered by a customer. If bundles or ‘kits’ are sold containing multiple individual items, the whole bundle might be considered to be the unit. Items that come in pairs (such as shoes) would be counted as one unit. This statistic is not the same as the number of orders as evidently an order can consist of multiple units.

Total Visitors

This is the total number of visits to a website. Also used is Total New Visitors (as opposed to returning visitors) to a website measured over a set period of time. For example, if person A visits a website every Monday, Wednesday and Friday for 4 weeks, this would be categorised as 1 unique visitor, but 12 visits. This can be analysed separately by device – Desktop, Mobile and Tablet.

Traffic Channel Contribution to Overall Sales

The percentage contribution of each traffic channel to overall sales is calculated using the formula: Revenue from Traffic Channel (£) / Total Revenue (£) * 100 .

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