You’ve started measuring the Completion Rate of your web visitors. You’ve overlaid intent with your Google Analytics. But now how do you estimate the impact to your business? Let’s take a look at a some simple formulas you can use to estimate increase in revenue and decrease in costs for moving the Completion Rate needle as little as 1%.

Let’s find the approximate magnitude (in dollars or your local currency) of a change in a single percentage point of your Completion Rate for a given time period.

First, let’s assume a few things. These assumptions can be tuned based on how you want to analyze your data.

- We’ll look at data over a Year
- We’ll be using US dollars
- You’ve measured Completion Rate (this is critical as we need to segment your numbers into revenue-generating potential or cost-generation potential!)

Now, some basic definitions. Let:

- N [visitors] — number of visitors to your website intending to purchase
- A [US$] — average order value

If we want to find the value created by 1% of our revenue generating visitors :

Let’s take an example. Let’s say you run a travel booking site and receive 1M visitors a year. You’re measuring completion rate and can identify that (of those 1M visitors) 400,000 annually come to your site to book a travel package. Looking at your books, you’re current average order value is $200 per reservation.

In this example, that would mean:

Our business’s ΔR is computed as follows:

Assuming we maintain constant traffic and average order values (i.e. not changing our marketing or merchandising strategies), we can expect to generate $800,000 annually for ever percent we can raise the completion rate, year over year.

Let’s pretend we’re still in charge of a hotel booking site. How do we apply ΔRto cost or overhead? It’s easy! We just keep the equation the same, but we look at a different type of value for A.

Instead of *average order value*, we need to look at the average cost of customer service, which might be a bit tricky to figure out.

Let’s look at a pure cost-centric task our customers might perform: checking reservation status. If customer can’t check the reservation online for whatever reason, chances are they’ll pick up the phone and call. Now instead of low-cost self-service, the interaction becomes a high-cost agent-based interaction.

Whenever you’re working with agents, the common metric to use is average handle time. Let’s call this H: the average time a human agent spends servicing a customer.

Now let’s assume you’ve calculated an estimate of your annual overhead for your call center operations. Commonly, business will approximate a time-based measurement of this cost down all the way to the minute. Let’s define this as C and say it’s the cost per minute the business incurs.

For A , we can use some approximations. Let’s say the we look at our call center metrics and find our definitions of Average Handle Time and Call Center.

H [minutes] — 6 minutes for the average call

C [$/minute]— $2.50 / min overhead for our call center

So let's define A as:

In other words, our Average Handle Time A is fifteen dollars.

Let’s revisit our base formula. We now have an A that allow us to plug into our equation.

For N let’s say we get an even 1 million visitors per year to our site that intend to check reservation status. (We can easily pretend that if we get 1M visitors per the previous example trying to book a room that each person will try to check their reservation status once.)

Since ΔR is really just a magnitude, we use the same formula as before, but with our new value for A:

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Wow. $150,000 for every percent annually!Now imagine the value from both increasing Completion Rate for bookings as well as checking reservations!
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First, we start with the definition of total revenue for a time period. We can say our total revenue R is equivalent to the number of customers that came to our site with intent to buy, N, times the Completion Rate Cᵣ, times the average order value A:

If we want the revenue when we increase the Completion Rate R by 1%, we simply add 1:

To find the change in revenue, ΔR, we simply take the difference of R₂ and R₁ :

Voilà, we have our definition for the value of a change in Completion Rate!

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