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Opinions on Reporting on Revenue vs. Value

by StatCentric
7 replies
I was hoping that some analytics gurus out there could give me their opinions. I'm trying to design a software interface to report on revenue from purchases, leads, demo views, etc. I want to make something that internet marketing can understand and relate to and figured this would be the best place to ask for advice.

Most interfaces I've seen always treat ecommerce purchases as revenue and everything else as "value". I've always disliked this for some reason and have tried to use a single metric "revenue" combined with revenue types such as "virtual revenue", "hard revenue", etc. My thinking is that a lead for instance might generate a potential revenue so to speak, or an ad click (you could assume an certain amount of revenue, although it' not cash in hand yet), etc.

Nothing seems to feel right. There doesn't seem to be any standard terminology as far as virtual vs. true revenue, or hard vs. soft revenue? Does anyone have any opinions on this subject (revenue vs. value) and how they prefer to value and track different types of conversions? Should ecommerce revenue has it's own distinct terminology? I've always disliked the goals vs. conversions and revenue vs. value distinction.. I just like to think of conversions and revenue.

I have an icon site for instance where I track demo views, downloads, leads, and actual purchases, which got me down this path of trying to figure out out how to keep the reporting of all conversion types together using the same terminology.

So to summarize would something like this be totally confusing:
All Revenue
Virtual Revenue
Hard Revenue, etc.

Or does it just make more sense to say:
Revenue
Value
Revenue + Value

And just lump any non-ecommerce conversions into value?

All advice is greatly appreciated.
#opinions #reporting #revenue
  • Profile picture of the author Victor Edson
    I'm not sure what you mean by soft revenue and hard revenue.

    All revenue is revenue to me. Whether it comes instantly or in 2 weeks, it's still revenue.

    If I were looking for metrics from revenue analytics software I'd like to know what my average person to the site is worth(EPC, estimated per click) and most importantly what my customer lifetime values are.

    If that person on my list clicked an ad their first visit, bought something their 8th visit.. I wanna know how much I'm earning on average and how much I can spend on traffic to get more buyers to my site.

    I'd also be more interested in my income metric than my revenue
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    • Profile picture of the author StatCentric
      Originally Posted by Victor Edson View Post

      I'm not sure what you mean by soft revenue and hard revenue.

      All revenue is revenue to me. Whether it comes instantly or in 2 weeks, it's still revenue.

      If I were looking for metrics from revenue analytics software I'd like to know what my average person to the site is worth(EPC, estimated per click) and most importantly what my customer lifetime values are.

      If that person on my list clicked an ad their first visit, bought something their 8th visit.. I wanna know how much I'm earning on average and how much I can spend on traffic to get more buyers to my site.

      I'd also be more interested in my income metric than my revenue
      Well for instance.. Let's say you tracked both leads and a purchases of an e-book... The e-book is definitely going to bring you in $15.00 but the lead is 'probably' worth $100.00 for your consulting services or whatever is you sell. Would you consider these both revenue or would you consider the lead "value" and the e-book as revenue?

      When I said virtual, I meant that it's not real revenue but it could be in the future so to speak... Sort of like potential revenue, but the word potential wouldn't always make sense. To me it's all revenue as well but I would still need to distinguish between confirmed revenue and estimated additional revenue you might get from leads, etc.
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  • Profile picture of the author ChrisDouthit
    I am not sure I understand what you mean either. Revenue is any money that comes into your business. So if you make a sale the money you received on the sale is revenue.

    Maybe you're talking about revenue verses profit?
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    • Profile picture of the author StatCentric
      Originally Posted by ChrisDouthit View Post

      I am not sure I understand what you mean either. Revenue is any money that comes into your business. So if you make a sale the money you received on the sale is revenue.

      Maybe you're talking about revenue verses profit?
      I'm talking about conversion types that don't have an exact dollar amount associated with. Let's say you tracked banner ad clicks and you estimated you would get .10 from each click. Would you want this reported as revenue or value?

      The interface for example would allow you to track different types of conversions and you can assign a dollar amount each time the conversion type occurs:
      - Downloads, demo views, signups, ad clicks, purchases, leads, etc...

      If you were tracking all these types and some of them had definite dollars amounts that went with them (such as purchases..) and some of them didn't (leads) would you want them all to be reported under the word revenue? Most tools report anything that is not ecommerce under "value" and not revenue and this has always bugged me so i'm wondering if people like this distinction.
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  • Profile picture of the author Victor Edson
    I see. I wouldn't count it as any type of revenue until it was actual revenue.

    If my average optin is worth $20, I wouldn't just assume that every optin would spend $20. Especially when you're tracking different traffic sources. Some traffic may convert at $24 per optin while another converts at $9 per optin.

    Those are the metrics that really matter.
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    • Profile picture of the author StatCentric
      Originally Posted by Victor Edson View Post

      I see. I wouldn't count it as any type of revenue until it was actual revenue.

      If my average optin is worth $20, I wouldn't just assume that every optin would spend $20. Especially when you're tracking different traffic sources. Some traffic may convert at $24 per optin while another converts at $9 per optin.

      Those are the metrics that really matter.
      What you are explaining would be classified as potential or virtual revenue (or some other term yet to be determined) and confirmed revenue (cash in hand) would be classified under hard revenue or something like that... but I think you are saying even using the word revenue or having this lumped into total revenue would be confusing. Thanks for the advice
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    • Profile picture of the author StatCentric
      Originally Posted by Victor Edson View Post

      I see. I wouldn't count it as any type of revenue until it was actual revenue.

      If my average optin is worth $20, I wouldn't just assume that every optin would spend $20. Especially when you're tracking different traffic sources. Some traffic may convert at $24 per optin while another converts at $9 per optin.

      Those are the metrics that really matter.
      What would you classify the $20.00 under though if not revenue...? Would you call it value, opportunity value/income,, etc.?
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