Fine Leather Goods (FLG) Advertising Campaign Analysis

If FLG spent R200 000 on their advertising campaign, calculate the following values:

i. What is the acquisition cost?

ii. What is the conversion rate?

iii. What is the retention rate?

Answer:

i. Acquisition cost = R100

ii. Conversion rate = 5%

iii. Retention rate = 40%

As per the data provided, the acquisition cost for FLG's advertising campaign can be calculated by dividing the total advertising expenditure by the number of visitors who clicked on a link and visited the FLG website. In this case, the acquisition cost is R100.

The conversion rate measures the percentage of visitors who made a purchase out of the total number of visitors who clicked on a link and visited the FLG website. The conversion rate in this scenario is 5%.

On the other hand, the retention rate indicates the percentage of customers who returned to make another purchase out of the total number of customers who made a purchase. The retention rate for FLG is 40%, showcasing the company's ability to retain customers.

These metrics provide valuable insights into the effectiveness of FLG's advertising campaign and their capability to attract and retain customers through their website. By analyzing the acquisition cost, conversion rate, and retention rate, FLG can make informed decisions to optimize their advertising strategies and enhance customer engagement.