Revenue tracking is a technique that lets you track revenues generated from traffic back to the source of your traffic.
Clearly if you are advertising is it important that you track which campaigns are generating the most revenue for you so that you can focus your marketing budgets to best effect. But to do this you need to know not just how well that traffic converts, you also need to know what revenue it generates.
So for example, if you sell two products called A and B with A costing $10 and B costing $100, assuming your margins are the same for each product you would rather sell 5 Bs rather than 5 As. If you don’t track revenues, you wouldn’t be able to attribute the revenue to each traffic source, only the fact that a sale was made.
Of course it’s not just advertising you need to track. It could be that your website gets a lot of referral traffic from other sites. If you find out that one or two of these sites are generating a significant amount of revenue for you, you can reach out to these sites to see if you can get more traffic from them.
So how does revenue tracking work?
The process involves placing some conversion tracking code in the thank you page of your shopping cart into which you need to inject the sales value of each transaction. This is relatively straightforward if you are using one of the off-the-shelf shopping carts like Shopify because they know how important this process is and so provide lots of online “how to” support.
If you want to get sophisticated, you can decide whether to include delivery charges as part of the sales revenue and similarly whether you wish to include sales taxes too. The best thing you can do though is to inject the gross profit generated by yours sales because profits are what matters, not revenue.