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Home > Articles > A/B Testing: Transaction Testing with AB Tasty’s Report Copilot
Transaction Testing with AB Tasty’s Report Copilot
Jul 18, 2024 | 4 min read
By Hubert Wassner
Transaction testing is a key strategy to increase your website’s revenue by focusing on boosting purchase rates. To begin with, it’s crucial to understand the difference between conversion rate (CR) and average order value (AOV) since they offer different insights into customer behavior. Knowing these metrics allows you to make meaningful changes to enhance transactions.
This article dives into analyzing transaction metrics and introduces our new tool, the “Report Copilot,” which simplifies report analysis.
Transaction Testing
To grasp how test variations impact total revenue, focus on two essential metrics:
– Conversion Rate (CR): This metric shows whether sales are up or down. Ways to improve CR include simplifying the buying process, adding a “one-click checkout” feature, using social proof, or creating urgency with limited inventory.
– Average Order Value (AOV): This measures the spending of each customer. Strategies to boost AOV include cross-selling or promoting higher-priced products.
By analyzing CR and AOV separately, you can identify which metrics are affected by your variations and can make well-informed decisions before implementation. For instance, creating urgency with low inventory might boost CR but could decrease AOV by reducing the time users spend browsing for more items. After analyzing these metrics individually, consider their combined impact on your overall revenue.
Revenue Calculation
The following formula shows how CR and AOV influence revenue:
Revenue = Number of Visitors × Conversion Rate × AOV
The first part (Number of Visitors × Conversion Rate) calculates how many visitors turn into customers, while the second part (× AOV) computes the total revenue from these customers.
Consider these scenarios:
– If both CR and AOV go up, revenue increases.
– If both CR and AOV go down, revenue decreases.
– If one goes up while the other remains stable, revenue rises.
– If one goes down while the other remains stable, revenue falls.
– Mixed changes in CR and AOV result in unpredictable revenue outcomes.
The last scenario, where CR and AOV move in opposite directions, is particularly complex due to AOV’s variability. Current tools struggle to provide precise insights on AOV’s overall impact due to significant random fluctuations. For a deeper understanding, refer to our article “Beyond Conversion Rate.”
While these concepts may seem complex, our aim is to simplify them. Recognizing the difficulty of this analysis, we created the “Report Copilot” to automatically gather and interpret data, offering valuable insights.
Report Copilot
The “Report Copilot” from AB Tasty automates data processing, eliminating the need for manual calculations. This tool helps you determine which tests are most beneficial for boosting revenue.
Here are a few examples from real use cases:
– Winning Variation: The left screenshot offers a detailed analysis, aiding users in drawing conclusions about their experiment results. Experienced users might prefer the summarized view on the right, also available through the Report Copilot.
– Complex Use Case: The screenshot above shows a scenario where CR and AOV have opposite trends, requiring a deeper understanding of the context.
It’s important to note that the Report Copilot doesn’t make decisions for you; instead, it highlights the most critical parts of your analysis, allowing you to make informed choices.
Conclusion
Transaction analysis is intricate, demanding the breakdown of components like conversion rate and average order value to better understand their overall effect on revenue. We’ve developed the Report Copilot to assist AB Tasty users in this process. This feature utilizes AB Tasty’s extensive experimentation dashboard to offer comprehensive, summarized analyses, simplifying decision-making and enhancing revenue strategies.