What is a Landing Page?
A landing page is a web page that is expressly designed to get visitors to a take a desired action.
Landing Pages Boost Conversions
A well designed landing page can significantly boost conversion rates for your desired calls-to-action (CTA). As you will see, even a small increase in conversion rates can make a big difference for your business. In this post we will model how even just a 2% increase in conversions can lower client acquisition costs by a whopping 25%.
Analyze Your Sites Current Conversion Rate
Let’s use an imaginary muffler shop, Joe’s Mufflers in Podunk, Iowa as our fictitious business. Joe wants to increase the number of muffler replacements his shop performs each month so he has decided to use Google AdWords to increase his site traffic by bidding on keywords for muffler replacement and paying per click.
Before you begin any digital advertising campaign you need to look at your current web analytics and compute conversion percentage and customer acquisition percentage. These are important numbers that will enable you to make informed campaign decisions.
Here are Joe’s Mufflers web analytics:
- 1000 website visitors per month
- 40 inquiries per month
- 4% CTA conversion rate (40/1000 = 4%)
- 20 muffler replacements per month (50% close rate)
From the above you can see that Joe’s shop does 20 muffler replacement each month but Joe has the capacity to replace 50 mufflers per month. Joe wants to use Google AdWords to get an additional 30 muffler replacement each month and he knows he needs to increase site traffic which in turn will increase the number of inquiries and customers appointment for muffler replacements.
Scenario One – No Landing Page
As stated previously, Joe’s site gets 1000 visitors per month and he receives 40 inquiries for muffler replacements, a 4% conversion rate. Half or 50% of those who inquire sign up for the muffler replacement. If the average cost per click for the muffler replacement keyword is $2.40, how much does Joe need to invest each month to get 40 more muffler replacements each month? Since we know his current analytics we can estimate the required Adwords investment required so lets do the math.
Based on a 4% conversion rate where 50% sign up for a muffler replacement, Joe needs to drive an addition 1,500 visitors to his site per month to reach his goal of 30 additional muffler replacements each month.
- Average cost-per-click (CPC) is $2.40 X 1,500 Clicks = $3,600 per month on clicks.
- The cost per inquiry is $60 derived as follows: 1,500 clicks x 4% inquiry rate = 60 inquiries
- The cost per customer acquired is $120 derived as follows: $3,600 / 30 customers = $120 per customer acquired
Joe needs to determine if the cost of acquiring a muffler replacement customer is worth $120 and if that will work for his business.
Scenario Two – With a Landing Page
A landing pages sole purpose in life is to get a visitor to take action, while your home page has to be more multi-purpose and is therefore less conversion focused and will typically convert less often than a landing page.
As stated earlier, Joe’s conversion rate is 4% on his website and in this exercise we will show how even a small increase in the conversion rate through the use of a landing page with a strong call-to-action can significantly lower your AdWords costs thus ultimately your client acquisition cost.
Using our formula from earlier, if Joe were to increase his conversion rate from 4% to 6% by creating a landing page would he lower his customer acquisition cost by 25%? (See Table Below)
If he were to double his conversion rate by using a landing from 4% to 8% (not at all unheard of) he would lower his customer acquisition cost by 50%.
If he were to increase his conversion rate from 4% to 10% by using a landing page he would lower his customer acquisition by 60%
You may download the Excel spreadsheet here and run your own cost models.
As you can see, even a small increase in your conversion rate will have a big impact on customer acquisition cost so investing in the creation of landing pages optimized to convert often makes good business sense.
In our next post on Landing Pages we will discuss how retargeting or showing ads to visitors who didn’t convert on the first visit can juice a campaigns overall conversion rate even more.
Rick Hogan, CEO & Co-Founder – Bleevit Interactive
Rick possesses over 20 years of digital marketing experience and started Bleevit Interactive with the primary mission of helping local businesses succeed online. When he is not working he can often be found hiking Great Falls, Virginia with his Labradoodle Lily, or sailing the Chesapeake Bay.