Average Revenue Per User (ARPU) is one of the most important metrics for tracking and maintaining sustainable ecommerce growth.

It lets you go beyond raw sales figures and delve into the revenue you generate from each customer. By zeroing in on this number, you can explore granular optimization opportunities down to the user level — from product recommendations to your pricing strategy.

In this post, we compiled the top actionable optimization strategies for increasing ARPU and maximizing your ecommerce revenue potential. 

Let's get started. 

1. Optimize Website Speed and Performance

Website performance is arguably the single most impactful factor that affects ecommerce conversions and revenue.

According to Deloitte, improving loading speed by 0.1 seconds increased retail conversions by 8.4% and Average Order Value (AOV) by 9.2%. Performance optimization is also shown to impact metrics like bounce rate and retention rate.

The better the user experience, the more likely customers will buy — and the more they're willing to spend. It's a much better online shopping environment all around for ARPU. 

Fortunately, optimizing website speed and performance isn't rocket science.

There are plenty of strategies you can use that can result in measurable performance improvements — even without the help of an external tool or agency. 

Here's a quick rundown of these strategies:

Use image compression or next-gen image formats

Visual-heavy ecommerce websites benefit greatly from well-implemented image optimization tactics. 

Some ecommerce platforms like Shopify automatically apply efficient image compression through their Content Delivery Network (CDN). If not, you can easily look for third-party tools and plugins like ShortPixel to compress your website images. 

Aside from image compression, consider serving images in next-gen formats like WebP and AVIF. These formats can retain sharp image quality while being smaller in size than traditional formats, like PNG. 

If your image tool doesn't have a native option for exporting in native formats, use tools like CloudConvert to automatically convert your images en masse. 

Minimize JavaScript and CSS files for faster load times

Next to images, your stylesheets and scripts also greatly impact your website's loading speed. 

Similarly, cutting these files down to size can lead to a noticeable performance improvement.

The objective is to remove unnecessary characters and whitespace, such as empty lines and comments, to reduce the file size. And since there's no practical way to do this manually, you'll need a tool like Minifier.org to get things done.

Of course, code optimization goes beyond just minification. 

Optimizing JavaScript, in particular, involves different steps like asynchronous loading and code splitting to ensure they don't block essential page elements. This allows customers to interact with your page sooner, creating a smoother user experience.

Use a CDN or edge delivery network to reduce latency

If you cater to a global audience, subscribing to a CDN or edge delivery network helps reduce latency for users. 

Edge delivery networks, however, generally provide better performance due to real-time data processing and storage near the "edge" of the network — closer to users. This is ideal for interactive website experiences, like online shopping.

Cloudflare is a popular CDN service that works well with big-name ecommerce platforms, like Magento and BigCommerce. If you're looking to equip your ecommerce website with the power of edge delivery, consider turnkey solutions like Nostra AI's Edge Delivery Engine.

Reveal more optimization opportunities with performance testing tools

We've barely scratched the surface of performance optimization with CDNs, code minification, and image compression.

There is so much more to unpack when it comes to the factors that affect website speed. To identify the specific issues that plague your ecommerce website, use a performance testing tool like PageSpeed Insights.

Just enter your website or page URL and click 'Analyze.' 

Within seconds, PageSpeed Insights will create an in-depth report of your website's Core Web Vitals — a set of performance metrics that bridge the gap between page speed and the user experience.   

PageSpeed Insights also detects the specific performance issues affecting your site. In the diagnostics section, you'll find each issue along with your potential time savings and a list of the affected website assets. 

2. Enhance Product Page Experiences

After focusing on site-wide performance, it's time to drill down into page-level experiences. 

You might be surprised at the number of factors that influence how customers interact with online stores. In some cases, one element on your product page can make the difference between a high-value transaction and a lost customer. 

Below are the things you should investigate if you want to enhance the product page experience:

Create concise yet comprehensive product descriptions

In ecommerce, great product descriptions make customers feel confident about their purchase fast. 

Don't beat around the bush and hammer down the aspects of your product that make it worth buying. We're talking about its unique features, use cases, and benefits your customers stand to gain.

Take a page out of Remi's book — mention the product's main value proposition in a single phrase, include a statistic, and then jump straight to the unique benefits: 

Only use high-quality images and videos

Use real, high-definition images and videos that show what the product looks like in customers' hands.

This is especially important in cosmetics, accessories, and fashion items. If you need to pack additional information like application instructions, include a simple diagram or tutorial video that showcases the product. 

Leverage word-of-mouth marketing

Fun fact: 98% of customers rely on product reviews to make sound purchase decisions.

If you've been in business for a while, you're bound to have a handful of positive reviews from happy customers. Don't let them get all moldy and dusty — use them as a selling tool when creating your product pages. 

Also, consider including star ratings and user images to make reviews more credible.

Sprinkle in some product recommendations

Now that the majority of your product page is on point, make sure to include cross-selling and upselling elements to really drive up your ARPU. 

A popular strategy is to include product recommendations in a "frequently bought together" list. Get creative with how you present these recommendations and make sure they're visible without being disruptive to the shopping experience.

3. Personalize the Shopping Experience

Speaking of product recommendations, a great way to push for higher transaction values is to incorporate personalization. 

The fastest route is to leverage AI-powered product recommendation solutions like Dynamic Yield. Using its proprietary Machine Learning (ML) system called "AdaptML," the platform automatically analyzes real-time user behavior to present recommendations that are more likely to generate higher transaction values.

Dynamic Yield's personalization affects the following touchpoints:

• Web pages
• Mobile app screens
• Paid ads
• Emails

Speaking of AI, companies like Amazon also use advanced algorithms to implement dynamic pricing. This works by automatically optimizing product pricing strategies based on datasets like real-time demand, seasonality, and stock levels. 

If you're looking for a simple personalization strategy, use an email marketing platform Mailchimp and Mailmodo to create customer segments based on preferences, past activity, and other categories. 

To give you an idea, beauty brand Jones Road kicks off the shopping experience with a question about the customer's skin type. This adds the user's email to the appropriate group, sending them personalized product recommendations tailored to their needs. 

4. Fine-Tune Your Customer Acquisition Channels

Efficient customer acquisition means lower costs and higher-quality customers who are more likely to spend big. 

Depending on your niche, some of the proven channels are: 

• Social Media Ads — Launching social media ads, particularly through Facebook ads, is proven to get positive reviews for ecommerce businesses. Its main advantage includes precise audience targeting, automated optimization using Meta Pixel data, multiple placement options, and easy budget control. 
• Paid Search — Showing up on search engine results through paid placements can give you an instant lift in conversions. Just be sure to optimize your campaign targeting, bidding, and landing page strategies to turn more clicks into sales. 
• Search Engine Optimization (SEO) — SEO may not bring short-term results unlike Facebook Ads or paid search, but it's the backbone to sustainable, long-term ecommerce growth. Done right, it can passively funnel organic visitors with high purchase intent to your website.

Remember, there's a reason why the most successful ecommerce brands go for a diverse customer acquisition strategy. Putting your eggs in multiple baskets mitigates risks, maximizes your online store's traffic potential, and unlocks customer groups you might've missed.

5. Reward Customer Loyalty

ARPU and Customer Lifetime Value (CLV) go hand in hand. 

The bigger your CLV, the more revenue you get out of each customer. That's why there's a lot of overlap between CLV and ARPU optimization in terms of strategies. 

One example is implementing loyalty programs to drive up order values. A traditional model involves rewarding loyalty points for purchases, which can be redeemed for discounts, free shipping, and other exclusive perks. 

You can also roll out subscription offers that unlock additional benefits — or conveniently automate reorders on your customer's behalf. Either way, this will help squeeze more conversions out of your existing customers and directly improve your ARPU.

6. Optimize the Checkout Experience

According to Baymard Institute, a whopping 70.19% of online shoppers leave during checkout.  

That's a huge chunk of your paying customers walking out the door when they should be putting money into your pocket. 

The good news is, we already know the main reasons why customers abandon their virtual shopping carts. 

Addressing these issues lets you streamline the checkout experience and encourage customers to push through with their purchases. 

Here's a checklist to get the ball rolling:

• Enable guest checkout to encourage first-time buyers. Alternatively, implement Single Sign-On (SSO) and enable customers to register using their social media to simplify the process.
• Try to support as many payment options as possible. Consider third-party payment processors like PayPal and Stripe for customers who are uncomfortable sharing their credit card information.
• Become transparent with fees. Itemize extra costs and make sure they're visible early on in the shopping experience. 
• Don't forget upselling and cross-selling recommendations. At the end of checkout, suggest add-ons like priority shipping, extended warranties, and complementary products.
• Automate cart abandonment recovery emails. Use tools like Mailchimp or Bloomreach to automate SMS and emails that remind customers about the products in their carts.

7. Leverage Analytics to Track Your ARPU Strategies Over Time

Finally, remember that there's no such thing as a one-size-fits-all blueprint for improving your ARPU.

In ecommerce, it's different strokes for different folks out here. And your stroke should be based on your actual performance data — not hunches or guesstimates.

Start by understanding the key metrics you should track alongside your ARPU, such as:

• AOV
• Customer Acquisition Cost (CAC)
• Monthly Recurring Revenue (MRR) 
• Conversion Rate (CVR)
• Cost Per Click (CPC) 

Ecommerce, advertising, social media, and analytics platforms can track these metrics natively. But it can be tricky to stay on top of your data with a fragmented approach (tracking multiple reports independently).

Consider consolidating and visualizing your datasets with a dashboarding tool like Looker Studio. This will give you a single source of truth while making it easier to turn data into clear, actionable insights.

Before we wrap things up, here are a few parting tips for using analytics for ARPU optimization: 

• Use A/B testing. A/B or multivariate testing in a nutshell is running different versions of the same asset — be it a landing page or ad copy — at the same time. This significantly reduces the time it takes to gather performance data and make the necessary adjustments.
• Track historical data. Chances are, you launched marketing campaigns and special promotions before. Use historical data to identify which of your previous strategies worked and double down on them.
• Establish a customer feedback loop. Use tools like Typeform or SurveyMonkey to automatically gather feedback from customers post-purchase or upon exit. Focus on questions about the parts of the shopping experience they liked, their suggestions, and how they found out about your brand. 

Conclusion

Remember that every single aspect of the customer journey can have a profound impact on ARPU — from acquisition all the way to checkout. 

To get the most returns with the least amount of work, begin your optimization with something that affects all touchpoints. 

By improving website performance, you affect the quality of pretty much every customer experience and interaction. Your landing pages will convert better, customers can breeze through the checkout process, and your website assets will deliver game-changing information quicker. 

That's where we come in. 

With Nostra AI's Edge Delivery Engine, your website can achieve near-instantaneous loading speeds without spending days or weeks on optimization. Our turnkey solution can be activated in as little as 30 minutes and show measurable performance gains on the same day. 

But don’t take our word for it. Read a real life case study from Birdies to find out how the popular footwear brand uses Nostra’s Edge Delivery Engine to dramatically reduce page load time, leading to a meaningful increase in revenue per user.

“We like to meet the customer where they are on their journey, and it has to happen when they're ready to shop. If they're waiting for a site to load or if the page’s images are broken, or if any part of that experience is just iffy, they're not going to trust the website, and they're not going to wait around to shop.”

-Marisa Sharkey, Co-founder and President, Birdies

To see Nostra in action, click here to book a demo today. 

Cheers!