The Difference between AOV, RPC and RPV

AOV, RPC and RPV - these metrics can give detailed results into the performance of your e-commerce store, but often that can be difficult to understand and interpret. 

This article aims to clarify what each metric is, and how they interact with each other to paint a picture of your e-commerce store's financial performance.

Average Order Value (AOV)

AOV is the average amount a visitor places in an order. 

Essentially, AOV = total revenue/no. of orders

A single user can place multiple orders and each of these will be recorded in Mida, and added together for the total revenue.

AOV tends to reflect customer spending behavior per transaction - this includes repeat purchases which is useful for optimizing pricing, upselling, or loyalty strategies.

A high AOV is positive but may indicate over-reliance on a small group of high-spending customers, posing a risk if they churn.

Revenue per unique conversion (RPC)

RPC is the average amount of revenue generated per unique conversion.

This is different than AOV as RPC only takes into calculation unique conversions, rather than all orders a visitor may place.

That is, RPC= total revenue/no. of unique conversions 

RPC is useful as it gives an indication of the average amount of revenue generated for every user that has converted (i.e., conversion rate).

As such, it is useful for assessing acquisition efficiency (e.g., cost-per-unique-conversion from ads, marketing efficiency). If RPC is low, this could be due to

• Inefficient Marketing Spend: High cost-per-acquisition (CPA) for low-value customers (e.g., broad ad targeting attracting one-time, low-spending buyers with weak customer loyalty or lack of incentives for repeat purchaaes).
• Low-Value Audience/Product: Targeting demographics or channels that yield small purchases or products that don't encourage a high initial spend.

Revenue per unique visitor (RPV)

RPV on the other hand, is the average revenue generated per unique visitor. 

What AOV is missing is in it's calculation, is the no. of unique visitors and the conversion rate. 

If AOV is increased, but overall revenue has decreased, this can be a problem too. This is a sign that less people are placing an order (or conversion rate has decreased).

RPV will allow you to gauge how much money is generated from each unique person who has visited your website (not just those who have placed an order, which is why conversion rate is a factor).

• RPV = total Revenue/total Unique Visitors
• RPV = (AOV x conversions)/total unique visitors
• And since (conversions/total Unique Visitors) = conversion rate
• RPV = AOV x Conversion rate 

RPV will give you an indication of how much each visitor orders, and the likelihood of each visitor converting. It gives a complete picture of revenue that AOV may miss.

Drop in RPV could suggest:

• An increase in number of visitors without any buying intent (drop in conversion rate). 
  • This could suggest lower quality traffic to the site (e.g., email, mismatch in messaging from ads, incorrect SEO keywords, etc.).
• Customers are buying less of high-value goods and more of low-value goods (drop in AOV). 
  • This suggests users are potentially not persuaded to buy high-value goods (i.e., the value of the product is not justified by the price) or there is not enough upselling done on high-value goods.

Other Potential Scenarios

• As RPC only measures unique conversions, RPC will usually be higher than AOV (RPC > AOV).
• AOV can also influence revenue per conversion. For example, increasing AOV through upselling can boost revenue per conversion (if conversion volume remains steady) and vice versa.