Double your revenue through conversion impact
Posted: Wed Jan 22, 2025 5:54 am
An example of determining the amount of the advertising budget to obtain a given revenue
Unit economics allows you to understand how much money to invest in an advertising tool to earn the required amount
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Evgeny Letov , founder of the Promo Expert agency
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Why calculate unit economics?
Why do we need unit economics and what tasks does it solve? Let's talk in the language of numbers. Let's take the initial version of calculating unit economics: advertising budget 50,000 ₽, revenue - 1,260,000 ₽.
We haven't looked at the numbers inside the marketing funnel before. Now let's look at them:
CTR (click-through rate of an advert) — 1.5%
Cr in application (website conversion) - 5%
Cr in sales (manager conversion) - 40%
We will change the numbers one by one and evaluate the result.
The table shows how revenue will change when one of the indicators changes by 2 times. We see that in each case revenue increases by 2 times. What will happen if we increase all 3 conversions at the same time? Obviously, revenue will increase by 8 times.
The model used a 2-fold increase in conversion. In reality, it is not always possible to increase the value so much. But even a 10-15% increase will lead to an increase in revenue by a similar amount.
In addition to conversions, you can bc data india phone number other numbers in the marketing funnel:
Number of ad impressions (depends on the cost per 1,000 impressions - CPM)
Average bill
Advertising budget
Each of these indicators affects the final result.
So, unit economics allows you to solve business problems:
Evaluate the sales funnel as a whole.
See the impact of a single unit (in this case, an advertising campaign) on revenue.
Find revenue and profit growth points in funnel indicators.
Plan revenue growth through scaling—increasing the advertising budget.
Talk to the investor in the language of numbers and justify the necessary financing.
Compare the efficiency of different advertising channels in order to correctly distribute the advertising budget.
Make decisions about the advisability of investing funds in a new advertising campaign or direction.
Unit economics allows you to understand how much money to invest in an advertising tool to earn the required amount
Subscribe to a useful newsletter
Once a week I will send materials on internet marketing: cases, expert articles, checklists and instructions, invitations to webinars, reviews of Friday humor.
Evgeny Letov , founder of the Promo Expert agency
By clicking the button, you agree to the personal data processing policy
Why calculate unit economics?
Why do we need unit economics and what tasks does it solve? Let's talk in the language of numbers. Let's take the initial version of calculating unit economics: advertising budget 50,000 ₽, revenue - 1,260,000 ₽.
We haven't looked at the numbers inside the marketing funnel before. Now let's look at them:
CTR (click-through rate of an advert) — 1.5%
Cr in application (website conversion) - 5%
Cr in sales (manager conversion) - 40%
We will change the numbers one by one and evaluate the result.
The table shows how revenue will change when one of the indicators changes by 2 times. We see that in each case revenue increases by 2 times. What will happen if we increase all 3 conversions at the same time? Obviously, revenue will increase by 8 times.
The model used a 2-fold increase in conversion. In reality, it is not always possible to increase the value so much. But even a 10-15% increase will lead to an increase in revenue by a similar amount.
In addition to conversions, you can bc data india phone number other numbers in the marketing funnel:
Number of ad impressions (depends on the cost per 1,000 impressions - CPM)
Average bill
Advertising budget
Each of these indicators affects the final result.
So, unit economics allows you to solve business problems:
Evaluate the sales funnel as a whole.
See the impact of a single unit (in this case, an advertising campaign) on revenue.
Find revenue and profit growth points in funnel indicators.
Plan revenue growth through scaling—increasing the advertising budget.
Talk to the investor in the language of numbers and justify the necessary financing.
Compare the efficiency of different advertising channels in order to correctly distribute the advertising budget.
Make decisions about the advisability of investing funds in a new advertising campaign or direction.