An algorithm for the transformation rate

Recently, a variety of reporters and colleagues often asked me about the "Mushroom Street transformation" problem, sorted out, and we share.

Like our mushroom Street This solves the user "to buy what" the question, and for the electricity merchant to lead the transaction the website, is very important one income, is comes from the Electricity Merchant website Commission. In other words, I bring the dealer's website to deal, they will give me a split. This income is often referred to as "CPS (cost per Sale) revenue".

Now, Taobao Taobao guest system, also known as "Taobao Alliance" is the largest partition platform. In fact, Mushroom Street is now mostly divided into income from the Taobao Alliance.

Here is the simplest conversion process:

In the diagram we will focus on three parameters:

Conversion rate of the whole station: is to enter the site of the UV, into the downstream of the electrical business site of the UV, in order to convert the "whole station purchase conversion rate." About this I last article "Talk about conversion rate" has detailed, here does not unfold. Mushroom Street at the end of March, a few data is, stop UV220 million, outbound (into Amoy) UV is 750,000, orders more than 60,000, so "the whole station purchase conversion rate" is about 3%.

Taobao Customer order ratio: is all to Taobao transactions, only a part of the support of the split. The proportion and Taobao sellers set up the situation, the current total Taobao-related categories of support for the proportion of 50% or so, Mushroom Street did not support Taobao customers to do weighted (also can not do), so this value will be consistent with Taobao, is about 50%.

Average Commission ratio: is to support Taobao customer's merchandise, the average set of Commission ratio. The proportion and the class head has a lot to do with the category of Mushroom Street, we generally calculate according to about 5%.

Usually, we combine "Taobao customer order ratio" and "average commission ratio", called "Split Commission ratio", so mushroom Street This number is about 2.5% (50% x 5%).

Well, we're starting to decompose the formula. (Every time I split the formula will feel very good fart, occupational disease?)

Does that make any sense? When we split the Commission income formula into "UV, whole-station conversion rate, support share ratio, customer unit price, average commission ratio", we found that each number can be calculated and can be checked. In other words, we can calculate. This is much more practical than in many industries.

At the beginning of April, I posted a new data on Mushroom Street, and soon investors "criticized" me, saying why I was so "really" saying so many real numbers, and I said, "It may seem to me that all numbers are counted, and I would rather have said it better than to let everyone count." From the existing number backwards, that is, to solve a one-yuan equation or two-yuan equation of the matter, I Junior high school will be.

So April 15 Taobao announced that "Mushroom Street Taobao divided into daily income has reached a hundred thousand of Yuan, is currently the largest third-party E-commerce platform", I am very happy, because it is calculated against the count we can be right.

The idea in our bones is integrity. And because there are formulas, we must be honest.

Then, on the formula above, we can see that if we want to pursue more commission, it will be easy to break down the operation and marketing direction.

The arrival of UV must become larger. This is the most elastic part of the equation, and the other changes are limited. In other words, the UV increases by one times, my income doubles.

The conversion rate of whole station is the core of operation. The last article was detailed, and it was not said. 3% of the value of the increase in space is relatively large, but the ceiling is also very obvious, can not double it?

Support the proportion of partitioning and positioning. If Mushroom Street is a pure Taobao guest site, that can be made 100%, but we are not, we are addressing the "user buy what" problem, so we must maintain "not utilitarian", that proportion will not change.

Customer unit price can be improved. For example, Taobao comprehensive customer unit price often according to 150 yuan, that Mushroom street there is a lot of space, Taobao Alliance announced that the average price is 89 yuan, there is still room. Ways to improve, such as improving quality, such as trying to expand the crowd and category ...

The average commission ratio varies little. May even be reduced, but I think Taobao is an ecosystem, the best way to maintain system stability is to maintain a variety of proportional stability. This is like a forest in the proportion of snakes can not be exceeded, nor too low.

The pink stars in the picture are our operational direction and important level. The formula is broken down to this extent, the other is not a good thing to hide.

......

have been trying to find an example of the inverse, but how the example is afraid of being said to be malicious. Never mind.

To sum up:

1. The number depends on the unreliable, the formula decomposition, anyone can calculate.

2. To enhance the income of CPS, we must learn to decompose the formula.

3. Find measurable factors that can be changed to try and never brag about the parameters in someone else's hand.