An e-commerce clothing store, attracting 100k new visitors monthly at a marketing cost of $0.50 per visitor, is evaluating different first order discount rates.
The base scenario includes a 2% conversion rate and a $100 average order value (AOV) at 0% discount. The cost per order is $40.
Analyze the following discount scenarios to identify which provides the best return on the marketing spends:
- Base Scenario: 0% discount, 2% conversion rate, $100 AOV.
- Scenario I: 10% discount, 2.5% conversion rate, $90 AOV.
- Scenario II: 30% discount, 3.5% conversion rate, $70 AOV.
- Scenario III: 50% discount, 4% conversion rate, $50 AOV.