Cost and conversion

Question

The cost of one lead is 37.63 USD. The conversion rate from one lead into one deal is 2%. What is the cost of the deal?

We might need to have 100 leads to have 2 deals - what is the cost of one deal?

What if we have 6 deals from 100 leads - what would be the cost of the separate deal?

Answer 1

Think about 100 leads (cost of which is $37.63x100 = $3763) will convert to 2 deals (2% conversion rate).

Therefore, each deal's cost is $3763 / 2 = $1881.5.

If you 6 deals from 100 leads, you will use the total cost of 100 leads divided by 6 to get the cost each deal, which is: $3763 / 6 = $627.17 (round to the nearest hundredth).