Lead Conversion at the Heart of RichFX Acquisition by ChannelAdvisor

Posted by on July 16, 2008 at 7:48 am.

ChannelAdvisor CEO, Scot Wingo, wrote a great post today about their acquisition of RichFX. At first blush, RichFX appears to be all about sexy rich media sizzle (PDF), but Scot’s post zeros in on the meat he’s after: lead conversions.

RichFX brings to ChannelAdvisor a stable of top internet retailers, but more importantly, brings a suite of rich solutions that grow sales conversions. Some examples Scot provided are:

Scot calls the category “conversion enhancers” — I think his marketing guys will find a better term. He then does some algebraic simplification to show why conversion rates are so important, resulting in:

Return on Marketing Spend (ROS) = Conversion Rate (CR) * Average Order Value (AOV) / Cost Per Click

Therefore, ROS goes up when CR or AOV go up, or CPC goes down. ChannelAdvisor’s suite already had AOV and CPC optimize tools. The RichFX acquisition completes the trifecta, ramping CR (and further boosting AOV).

Scot’s post concludes with a couple examples with real dollars worth reviewing. Congrats Scot on the acquisition and the greater capability to maximize etailer ROS…

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