Paul is the owner of Tennio and is wondering what impact Tennio's mobile experience is having on revenue. Paul understands that they can calculate the mobile conversion rate (mCvR). Tennio receives 200,000 clicks with a mCvR of 1%. The average order value is $200. How much revenue does Tennio's mobile experience create?
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Correct answer: $400,000.
Why this is the answer
To calculate the revenue, first determine the number of conversions. With 200,000 clicks and a 1% mobile conversion rate, the number of conversions is 200,000 0.01 = 2,000. Then, multiply the number of conversions by the average order value. So, 2,000 conversions $200 average order value = $400,000 in revenue. $200,000 is incorrect as it would result from multiplying clicks by AOV, ignoring the conversion rate. $500,000 is incorrect as it does not align with the given figures. $20,000 is incorrect as it would result from multiplying clicks by the conversion rate, but then dividing by the AOV, or from a miscalculation of the conversion rate.
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