Ecommerce Diagnostic 3

Question 1

Customer lifetime value (CLV) is significantly lower than customer acquisition cost (CAC). What does this diagnose?

Accepted Answer

The business is losing money on each customer acquired

Answer

Spending more to acquire a customer than they ever return is an unsustainable, money-losing model.

Question 2

Organic search traffic drops 40% overnight with no site changes. What should you check FIRST?

Accepted Answer

Google algorithm updates or a manual penalty

Answer

A sudden overnight organic drop with no internal changes usually signals an algorithm update or penalty.

Question 3

A diagnostic shows 95% of refunds come from one product category. What is the best next step?

Accepted Answer

Investigate that category's quality, sizing, or descriptions

Answer

Refunds concentrated in one category point to a product, sizing, or description issue there.

Question 4

Which metric best diagnoses overall checkout efficiency for completed purchases?

Accepted Answer

Checkout completion (conversion) rate

Answer

Checkout completion rate directly measures how many who start checkout actually finish.

Question 5

Two ad campaigns have the same ROAS, but one has a much higher CAC. Which is generally the better signal?

Accepted Answer

The lower-CAC campaign, as it acquires customers more cheaply

Answer

At equal ROAS, the lower CAC means you acquire each customer for less, improving scalability.

Ecommerce Practice Test