Potential ROIThe potential ROI for an online shop helps to evaluate the effectiveness of a particular advertising strategy. It provides an understanding of which type of advertising, which source (website, social networks, targeted advertising, etc.) or which advertising campaign has produced the greatest result.
Potential ROI = (profit - cost) / cost x 100%,
where profit is the income generated by the investment (e.g. sales) and costs are the expenses for marketing campaigns, advertising and promotion.
For an online store, potential ROI can be calculated for a specific marketing campaign or strategy, as well as for the overall investment in marketing and business development.
Conversion rate (conversion metric)This is the percentage of completed actions or steps in the buying process. In the fast-paced world of sales and business, every action and decision needs to make sense. It is easier to track metrics such as
- Number of users who have completed the onboarding process (e.g. created an account)
- Percentage of orders paid and confirmed