People usually way overestimate the full funnel conversion rate they will get from an ad or social media posting. A rule of thumb I use is that if you're trying to get signups for a free service or mailing list, about 1 in 1,000 of your audience will sign up.
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So if you're a Twitter celebrity with over 100k followers (like
@ericries,@naval or@andrewchen), and you post about a startup launch, that will get them… a few hundred signups. Doesn't feel like much, does it? Maybe 10x less than you were expecting?2 replies 0 retweets 5 likesShow this thread -
If you are trying to *sell* something, cut the number by 10x again. So a post to 100k followers might get you 10 sales. (!) Why so low?
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Let's do the math. Say roughly: 10% of followers see the post (others are fake, inactive, or didn't log on that day) 10% click through (if you're lucky, 3–5% if not) 10% sign up for something free (maybe 20–30% if you're good) Product = 0.1% conversion rate
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Again, if you're asking for money, not just a free signup, it's even less. Conversion rate from browse to buy in e-commerce is single-digit percentages. So replace that last 10–30% with something more like 1–3% and you're an order of magnitude lower.
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Of course, the same math applies to ads. That banner ad costing you $10 per 1k impressions needs to make you more than $10 per sale, or you're losing money. Same for a CPC ad costing you $0.10 per click.
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My favorite story on this topic, via
@sivers: https://sivers.org/1pct (That punch line makes me laugh every time.)3 replies 0 retweets 5 likesShow this thread
Thanks Jason. I hadn't read that in a long time!
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