Join Patrick Rauland for an in-depth discussion in this video Understanding customer lifetime value (CLV), part of WordPress: Ecommerce.
- There are two very important numbers in ecommerce.…As we've discussed, the cost of acquisition, or CoA,…refers to the cost of getting someone to make a purchase.…Once you start getting customers,…you will want to focus on CLV,…or customer lifetime value.…The CLV is an estimate for how much profit…you will make from each customer.…To have a profitable business,…you will want to lower your acquisition costs…and increase your customer lifetime value.…If your CLV is higher than your CoA,…you're more likely to be profitable.…To determine your CLV, we first need to calculate CoA.…
CoA is calculated by dividing the cost per visit…by your conversion rate.…Let's say you're selling a chocolate flavored protein bar,…and you've decided that advertising…is the best way to get your business moving.…If you pay $1.00 a click, and have a 20% conversion rate,…that means one out of five people that click on an ad…actually go through the checkout process.…Your acquisition cost in this case is $5.00.…That means for you just to break even,…
To start, you need to understand the market for your product or service so you can build your website around it. So Patrick Rauland kicks off with some key questions that will help you define your audience and organize your products. He'll then help you set up a payment gateway with PayPal or Stripe, ship orders, collect taxes, and secure sensitive data. And if you weren't convinced already, Patrick reviews the benefits of WordPress ecommerce tools as well as a selection of third-party tools that integrate beautifully with WordPress. Plus, get bonus tips on marketing your new website: attracting and retaining customers and increasing the value of the average order.
- Defining your audience
- Organizing your products
- Marketing your WordPress site
- Increasing average order value
- Getting paid
- Checking out with PayPal or Stripe
- Managing and shipping orders
- Collecting tax
- Protecting sensitive data
- Using WordPress or third-party platforms for ecommerce