An online home appliance store, attracting 100k new visitors each month at a marketing cost of $0.40 per visitor, is experimenting with different cart abandonment discount rates.
The base scenario includes a 1% conversion rate and a $300 average order value (AOV) with no discount. The cost per order is $60. Analyze the following scenarios to determine which is most advantageous:
- Base Scenario: No discount, 1% conversion rate, $300 AOV.
- Scenario I: 10% discount, 1.2% conversion rate, $270 AOV.
- Scenario II: 20% discount, 1.5% conversion rate, $240 AOV.
- Scenario III: 30% discount, 1.6% conversion rate, $210 AOV.
All scenario numbers averaged over those who redeemed the coupon and those who didn't.