How Changes In Conversion Rates Affect Flyer Delivery
How Small Changes in Conversion Rates Create Massive ROI Shifts
In marketing campaigns, particularly flyer distribution, conversion rates are the make-or-break factor. Even a seemingly small improvement in conversion rate can lead to exponential growth in profits, completely altering the return on investment (ROI). Let’s dive into an example to understand how.
The Power of Conversion Rate Optimization
Consider a flyer campaign with the following assumptions:
Customer Acquisition Cost (CAC): $100,000.
Lifetime Value (LTV) per Customer: $300.
Net Service Cost per Customer: $50.
Flyers are sent to 100,000 prospects.
Case A: 2% Conversion Rate
To achieve a profit of $100,000, the campaign must cover CAC and service costs while generating sufficient revenue:
Customers Acquired: 2,000 (2% of 100,000 flyers)
Total Revenue: 2,000 customers × $300 = $600,000
Service Cost: 2,000 customers × $20 = $40,000
Total Costs (CAC + Service Costs): $100,000 (CAC) + $40,000 (Service Cost) = $140,000
Net Profit: $600,000 (Revenue) - $140,000 (Total Costs) = $460,000
Case B: 4% Conversion Rate
Now, let’s double the conversion rate to 4% and see the impact on profits:
Customers Acquired: 4,000 (4% of 100,000 flyers)
Total Revenue: 4,000 customers × $300 = $1,200,000
Service Cost: 4,000 customers × $20 = $80,000
Total Costs (CAC + Service Costs): $100,000 (CAC) + $80,000 (Service Cost) = $180,000
Net Profit: $1,200,000 (Revenue) - $180,000 (Total Costs) = $1,100,000
A campaign that converts twice as well as another campaign will make more than double the money, especially if your service costs are small. In other words, increased conversion rates flow disporportionately higher to bottom line profits. The example here showed an increase in conversion rate of 100% resulted in an increase in the campaigns profit by 139%.
How to Maximize Your Flyer Campaigns:
I’m going to be honest: the best way to see results is let us handle it for you. Many clients come to us after struggling with subpar flyer campaigns — trying to save money on cheap designs while spending thousands on ineffective distribution that make a fraction of what they could. We consistently deliver 4-5x better results then these case studies. We have a team of ex-Fortune 500 designers and two dedicated data-analysists always determining what leads to maximum conversions. It’s why we’re trusted by most major brands across Canada; we produce flyers that perform multiples better than anyone else, and have the largest dataset and past work to prove it.
