I'm a software developer working on a (non-software/non-technology) line of consumable products that will require significant capital costs to even do a sample production run. Given that, I'd like to test the waters to try and estimate metrics like customer acquisition costs and whether a given product will actually sell before investing the capital. Based on what I've learned here, it seems to me it would be a good idea to put up a landing page of some sorts and maybe drive traffic to it with an Adwords campaign but what sort of conversion would you guys use to proxy for a sale given that I can't actually sell the product without having produced it (or even having invested in the branding yet)? I supposed I could have people sign-up for a newsletter or something but I would really have no clue how that conversion rate might convert to a sales conversion rate. I'm just getting up-to-speed on digital marketing so any pointers to key background reading material on running exploration tests like this to test business ideas before investing in them would be greatly appreciated as well.<p>Thanks.
If you're doing some kind of discretionary consumer product, than you could proxy sales conversions based on the amount of traffic your landing page receives. Something on the order of 1-2% of total visits will become orders. If you take email addresses on your landing page, then assume a 15-20% open rate for your future newsletter, and a higher amount, maybe 2-5% conversion to sale from those clicks.<p>Additionally, depending on what type of product it is, you can usually expect your average order size to be around 150% of the cost of one item. For example if you sell t-shirts for $25, your average order size will be around $37, since most customers will by 1 or 2 items.