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Update transactional revenue metrics
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Add more details to the report to make it easier to migrate from revenue app
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nsquare92 authored Nov 21, 2024
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Expand Up @@ -9,10 +9,19 @@ Whether you have a transactions based business model or a subscription based bus

### Metrics Definitions

1. ARPU aka Avg revenue per user: Total Revenue/ Total Number of Users
1. Total Revenue: Sum of revenue made across all purchases
- The below report shows you overall revenue over time
![image](/revenue.webp)
2. AOV aka Avg order value: Total Revenue/ Total Number of Purchases
3. Life Time Value: what is the cumulative spend we expect from a user in the overall time they spend on this platform. Often defined as ARPU in the first 30 (or XX) days x Avg life-time (in months) of a user
4. CAC aka Customer Acquisition Cost: i.e how much money do we have to spend to acquire a user (do I have to spend 5$ on marketing spend or $20 etc). A good acquisition strategy would mean LTV/ CAC > 1
3. LTV aka Life Time Value: Cumulative spend from users in the time they spend on this platform. Often you look at spend in the first 30 or 60 days x expected life-time (2 years, 3 years etc)
- The below report shows you cumulative revenue of new users (identified by signup) by joining cohort over their lifetime (5 days, 30 days, 60 days). It leverages property sum in retention to look at retained users cumulative spend
![image](/ltv.webp)
4. ARPU aka Avg revenue per user: Total Revenue/ Total Number of Users. Often you want to look at ARPU within the first 30 or 60 days of joining the platform
- The below report shows you ARPU within first 30 days of sign-up. It leverages property average in retention to look at 30 day retained users spend
![image](/arpu.webp)
5. CAC aka Customer Acquisition Cost: i.e how much money do we have to spend to acquire a user (do I have to spend 5$ on marketing spend or $20 etc). A good acquisition strategy would mean LTV/ CAC > 1

The ![following FAQ](https://docs.mixpanel.com/docs/features/revenue_analytics#what-should-be-the-shape-of-the-data-to-analyze-these-metrics) explains what the shape of the data should be to build the above revenue metrics.

NOTE: You can look at how to build these metrics in Mixpanel by leveraging our [Ecomm template](https://mixpanel.com/project?show-template-selector=true) on either your data or our public demo data set. Here is a [public dashboard](https://mixpanel.com/p/DnjPvUbyke46TtZ9AeCGCs) to give you a view on the metrics you can build

Expand Down Expand Up @@ -68,7 +77,7 @@ We also have the ability for you to look at the latest value as of time-period,
Only customers using the MP Warehouse Connectors get access to these features
#### What should be the shape of the data to analyze these metrics?
Please ensure once you setup the Warehouse Connectors, you have Mirror Mode turned on to ensure your data is 100% in sync with the WH even if the WH data is updated
- For Transactions based models - Please send purchase value as a event property on every purchase event
- For Transactions based models - Please send purchase value as a event property on every purchase event. Example: `(Event: Purchase completed, {item: clothing, price: $100})`
- For Subscription based models -
- Please send a monthly snapshot of the revenue per user/ account as a historical profile property. More details [here](https://docs.mixpanel.com/docs/data-structure/user-profiles#importing-historical-profile-values)
- If a user/ account is not active, please set the revenue data to zero for the immediate month following so we can tag this as a churned user/ account.
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