An e-commerce company hired a new marketing agency. Traffic to the website skyrocketed, and the Average Order Value (AOV) increased. The agency claims a massive success, yet total revenue actually dropped! In this challenge, students will use a three-factor retail model (Revenue = Traffic × Conversion Rate × AOV) to expose the hidden truth about the website's performance and calculate the exact financial cost of a poor user experience.

Roadmap to Solution:

Step 1: The sequence for e-commerce is: Traffic (Volume) → Conversion Rate (Efficiency) → Average Order Value (Price).

Step 2: We need to calculate the impact of the Conversion Rate. This is the second factor in our chain.

Step 3: Apply the cascade rule for the factor preceding Conversion. Since Traffic comes first, use its new, actual value (Traffic₁).

Step 4: Apply the cascade rule for the factor succeeding Conversion. Since AOV comes last, keep it frozen at its baseline value (AOV₀).

Step 5 (Conversion Impact): Multiply the actual traffic by the change in conversion rate, and then by the baseline AOV: Traffic₁ × (Conversion₁ - Conversion₀) × AOV₀. Hint: Use decimals for percentages (e.g., 0.02 for 2%).