1. Typology of Conversion Rates Ted Mitchell

2. A conversion rate is the ratio of the Output to the Input Conversion rate, r = (Output, O)/(Input, I) Inputs can be simple and concrete such as number of servers, or Inputs can be complex and aggregated abstractions such as total communication expense to represent the impact of radio spots and newspaper advertisement Outputs can be simple and concrete such as the number of cups sold, or Outputs can be complex and aggregated abstractions such as total dollar sales or revenue to represent the aggregated unit output of 3 sizes of coffee and pastries

3. Typology of Conversion Rates A Single, Concrete OutputAggregated Output A Single, Concrete InputUnambiguous and very tactical in nature. Cups per hour, pies per server, units sold per radio spot, etc. Popular for explaining the effect of single inputs on a range of different outputs measured in term of sales revenue such as conversion rates of dollar sales per hour, dollar sales per server, dollar sales per radio spot. An Aggregated Input Units sold such as cups, pies, with conversion rates of units per dollars of advertising expense, or units per dollar of server expense. Popular for strategic marketing machines using dollars of marketing expense and dollars of revenues. Conversion rates discussed as percentage Rates of Return

4. Typology of Conversion Rates A Single, Concrete OutputAggregated Output A Single, Concrete InputUnambiguous and very tactical in nature. Cups per hour, pies per server, units sold per radio spot, etc. Popular for explaining the effect of single inputs on a range of different outputs measured in term of sales revenue such as conversion rates of dollar sales per hour, dollar sales per server, dollar sales per radio spot. An Aggregated Input Units sold such as cups, pies, with conversion rates of units per dollars of advertising expense, or units per dollar server expense. Popular for strategic marketing machines using dollars of marketing expense and dollars of revenues. Conversion rates discussed as percentage Rates of Return

5. Typology of Conversion Rates A Single, Concrete Output Aggregated Output A Single, Concrete InputUnambiguous and very tactical in nature. Cups per hour, pies per server, units sold per radio spot, etc. An Aggregated Input using a single metric for measurement (dollars, exposures, gross rating points) Units sold such as cups, pies, with conversion rates of units per dollars of advertising expense, or units per dollar server expense.

6. A Single, Concrete OutputAggregated Output with a single metric (dollars, transactions, etc.) A Single, Concrete Input Unambiguous and very tactical in nature. Cups per hour, pies per server, units sold per radio spot, etc. Popular for explaining the effect of single inputs on a range of different outputs measured in term of sales revenue such as conversion rates of dollar sales per hour, dollar sales per server, dollar sales per radio spot. An Aggregated Input Units sold such as cups, pies, with conversion rates of units per dollars of advertising expense, or units per dollar server expense.

7. Typology of Conversion Rates A Single, Concrete OutputAggregated Output A Single, Concrete InputUnambiguous and very tactical in nature. Cups per hour, pies per server, units sold per radio spot, etc. Popular for explaining the effect of single inputs on a range of different outputs measured in term of sales revenue such as conversion rates of dollar sales per hour, dollar sales per server, dollar sales per radio spot. An Aggregated Input Units sold such as cups, pies, with conversion rates of units per dollars of advertising expense, or units per dollar server expense. Popular for strategic marketing machines using dollars of marketing expense and dollars of revenues. Conversion rates discussed as percentage Rates of Return

8. A Single, Concrete Output An Aggregated Output A Single, Concrete Input Simple, Concrete and Tactical Conversion Rates Popular for explaining the groundhog day effect of a single input change on a range of different outputs measured in term of sales revenue such as conversion rates of dollar sales per hour, dollar sales per server, dollar sales per radio spot. An Aggregated Input Units sold such as cups, pies, with conversion rates of units per dollars of advertising expense, or units per dollar server expense. Complex, Abstract and Strategic Conversion Rates often ambiguous and often measured as percentage rates, %

9. 1) Interpretation of Input and Output from the conversion rate You hear the term ‘miles per hour’ to describe a transportation machine. What is the input? What is the output? Output: Miles = (miles per hours) x (Input: Hours Driven)

10. 2) Labels can be ambiguous You hear the term ‘sales per hour’ to describe a coffee shop machine. What is the input? What is the output? Output: Sales = (sales per hour) x (Input: Hour) Are the ‘Sales’ measured in terms of cups being sold or the dollars of revenue?

11. 3) Labels from the conversion rate You hear the term ‘Sales Revenue per Server’ to describe a marketing machine. What is the input? What is the output? Output: Weekly Revenue= (dollars per server) x (Input: # of Servers) Make the Labels for the O/I as specific as possible

12. 4) Labels from the conversion rate You hear the term ‘sales returned on advertising’ to describe a marketing machine. What is the input? What is the output? Output: Sales = (sales per ad) x (Input: Advertising) Are sales measured in quantity of units sold or dollars? Is the amount of advertising measures in number of radio spots, or $ of advertising budget, etc?

13. 5) Labels from the conversion rate You hear the term ‘return on marketing investment’ to describe a marketing machine. What is the input? What is the output? Output: Profit = (Return on Investment) x (Input: Investment) Usually measured as dollars of profit generated from dollars of investment and presented as a percentage We have a 20% return on investment (is it gross profit, marketing profit, interest rate)

14. Any Questions About the four basic types of conversion rates found in marketing