We need campaigns and channels with low conversion cost and high conversion rate.
Conversion Rate
- percentage of potential customers who take a desired action out of the total number of prospects:
– making a purchase
– signing up for a newsletter
– filling out a contact form - 1,000 leads => 200 of them make a purchase= 20% conversion rate
- critical indicator of how well marketing and sales strategies are working to engage and convert leads
- higher conversion rate = marketing and sales tactics effectively resonate with the target audience and drive them to take the desired actions
- Monitor to:
– optimise customer journeys,
– refine messaging
– improve touchpoints further.
Conversion cost
- average cost of converting a lead into a customer
- $20,000 on a campaign => 200 conversions, the conversion cost = $100
- low conversion cost = > maximum ROI
- high conversion cost=reassess = > to reduce spending without compromising conversion rates
– campaigns,
– target audiences
– marketing channels
- conversion rate = effectiveness
- conversion cost = efficiency
- allocate resources to the most effective campaigns and channels = with a low conversion cost and high conversion rate
- high conversion rate paired with a low conversion cost = highly successful and cost-effective marketing campaign
- high conversion cost or low conversion rate = marketing tactics need refinement: reduce waste, improve lead-to-customer conversion rates.
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