E-commerce Revenue Optimization Framework

The framework looks at revenue optimization as a broader concept than just conversion rate optimization.
Optimization framework that we use involves 3 step process:

 
 
 
 

Quantitative Drivers


 

Optimization for online business is process of using analytics to generate opportunities for increase in revenue. Optimization involves testing different ideas that affect major drivers/ levers of revenue.

These are 4 major drivers of revenue for e-commerce business:

 
 
 

Google Analytics or Adobe Sitecatalyst data is easily transferable to above metric where we can understand contribution of each lever to the local revenue.

 

If any optimization method that can impact any of the above metric, it will impact bottom line or top line of the business and will remain as +ve ROI project

 
 
 

Qualitative Drivers


 

Generation of successful ROI projects require understanding of business from qualitative & quantitative standpoint. When we understand revenue drivers above, we are essentially understanding the quantitative drivers of business.

 

We however have to couple it with the qualitative understanding of business. The best method to achieve quick & easy understanding of business is to use following framework namely Business Model Canvas.

 
 
 
 

This part of process aims to understand business from structural standpoint in form of interview with the Key Team members within core functional team.

 

Once key quantitative & qualitative information is available, hypothesis generation and A/B testing can start.

 
 
 

Hypothesis generation & A/B Testing


 

Hypothesis generation is based on the information collected using qualitative & quantitative feedback to decide on levers priority.

 

Changing ____________ into ____________ will ____________

 

An example of Hypothesis & suggested A/B test is shown below:

 
 
 
 
 
 
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