Noibu’s ROI comes through the annual revenue saved by fixing an issue. Every issue tracked through Noibu is assigned an Annualized Revenue Loss (ARL) value. This refers to the amount of money your company stands to lose if the issue goes unresolved for a full year, based on the issue's current impact. An issue's ARL may change as Noibu collects more data, but it's best to investigate and resolve issues with high ARL as soon as possible.
To calculate an issue's ARL, Noibu considers several metrics:
- Total users impacted by the issue over the past 90 days. This refers to unique user sessions where the issue occurs, including sessions where the user successfully completed a transaction.
- Conversion drop-off due to the issue. We calculate this value by considering how many users impacted by the issue were able to progress through the purchase journey, compared against the domain average. Rather than by percentage, we consider the conversion drop-off by number of leads lost. For example, if 325 users were impacted by the error, and this caused a drop-off of 77.7%, we multiply these values to get 252 lost leads.
- Note: We only show revenue loss if the difference is greater than 10%. The one exception is the On Site step, where the threshold is 0.5 X the domain's maximum variance. This value must be at least 4%.
- The average order value. You must configure this value manually for each domain in the Domains module.
- The number of days the error has been present. Noibu considers the average daily revenue loss the issue has caused so far, and multiplies this value by 365 to get the annual value.
Based on these data points, Noibu calculates ARL using the following formula:
[users impacted] × [conversion drop-off] × [average order value] ÷ [days present] × 365
You can see this formula in action in the image below.
The Funnel also reports the Sessions Lost and Transactions Lost at each stage. These totals are calculated as follows:
Sessions Lost = Total Sessions X Drop in Conversion
Transactions Lost = Sessions Lost X Domain Average Conversion Rate for the remaining steps up to Checkout Started
Note: Transactions Lost and Sessions Lost are only distinct values at the On Site and Add to Cart steps. At later steps, Transactions Lost accounts for organic drop-off due to errors experienced at earlier steps.
You can view many of the metrics used to calculate an issue's ARL in the Funnel Impact section in the issue's User Impact tab.