The 2 Formulas For eCommerce Growth You Need To Know

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If you are an owner of an eCommerce business or perhaps you are an eCommerce manager, there are two formulas that you need to know for proven eCommerce growth.


Ecommerce Growth Formula:


L x C x M x F = GP (Leads x Customers x Margin x Frequency = Growth Potential)


If you double any of the variables in the formula above, you will essentially double your revenues.


Setting Out A Strategy to Achieve Growth

To increase your eCommerce revenues, you will need to focus on:

  • increasing leads from your website
  • increasing customers
  • increasing margin
  • Increasing the frequency of customer purchases


Increasing leads and customers can be achieved through proper marketing of you eCommerce business through:


Increasing the margin is something that you as an eCommerce manager will have to negotiate with your suppliers. Striking a deal that will give you an increased margin will help you to leverage price promotions and remain competitive with your competitors.

You can also increase your margin through using a payment gateway provider that offers better value.


Increasing the frequency of customers can be achieved by adopting CRM, email marketing and remarketing.


The second Formula For eCommerce Growth

The other proven formula for eCommerce growth is:

Visitors X Conversion Rate X Average Order Value = Increased Revenue


As with any business trading online, the number of visitors that land on your eCommerce store is key.

Whether those visitors come from social media, SEO, PPC or from any other traffic source, it is essential that they convert at a high ecommerce conversion rate.

By increasing the average order value through add-ons and promotions, you will increase your revenues.

By increasing any of those variables your eCommerce business will grow.


If you are an eCommerce manager looking to grow your online revenues for your business, applying either of the two formulas will increase your eCommerce revenues.


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