How much will I pay per lead? What will be my return on investment (ROI)? What conversion rate can I expect? Which channel, what content, and which UX? These are the questions any Marketing Director, and certainly, any CEO, will be asking their marketing team or digital agency most of the time.
For an e-commerce brand, these questions can easily be answered. Log into your Analytics, click on your Monetisation, check the Overview, check your e-commerce purchases or in-app purchases, and drill down by channel, landing page, advert or even by search keyword.
However, this is not so easy for companies selling high-value goods to UHNWIs. The customer is not paying online; they are filling in an enquiry form. Once the enquiry form is filled in, the data leads into the labyrinth that is CRM.
So, what conversion rate can we expect from a luxury brand website selling high-value goods and services to UHNWIs? How much will we pay for the lead, which will really affect our top line? What ROI is possible for companies selling high-value goods and services, or is it merely an exercise in branding?
These are the golden questions I am asked several times a day by luxury brands and companies selling high-value goods and services. So, let’s study conversion rates and cost per lead luxury brands can expect and find out where we should put our marketing dollars.
Which companies do not sell online?
In our experience, as an agency dedicated to targeting UHNWIs and their entourage, and working solely for high-value goods and services companies, we have come across a variety of goods and services that are not going to be bought using a shopping cart.
Relevance has worked with companies selling financial services, real estate, luxury rentals, commodities, domain names, art, bespoke furniture, professional services, watches, jewellery, jets, yachts, schools, interior design, high fashion, private health insurance, and more. Prospects browse and either fill in a form, download a brochure or join a mailing list to enter the sales funnel. So, what conversion rate can we expect for a prospect buying a yacht costing US$ 50 million?
How do you calculate ROI for high-value goods?
Calculating ROI for high-value goods is not the same as calculating the ROI for low-value items. If your CRM cannot connect sales to marketing, it is time for a new CRM. If your sales people are not filling in their CRM, you need new people. However, you can divide all sales you received (from the website or not) by the number of enquiries (good or not) to achieve an approximate ROI for the website. Then you need to divide that figure by weight of each channel, country or page. You can also do this over three years to take into account repeat customers.
What is a conversion, and what conversion rates can we expect from a luxury brand website?
We must ask ourselves, what are we measuring? The conversion rate and cost of conversion will vary considerably depending on the action you want users to take. Let’s assume we are talking about lead generation rather than top-of-funnel awareness action or after-sales. If you are gating great content or getting people to sign up for a newsletter that adds value, the conversion rate can be a lot higher than if you are asking people to fill in a contact form for services.
The conversation rate from form fills will depend on how much information you expect from that person. What are you giving in return for that e-mail, name or phone number? Anything? WhatsApp forms are converting a lot better than web forms (2% to 8% compared to 1%), as are web messenger systems 6% where you can get an immediate response from a human specialist rather than having to wait for info that may never arrive.
The CRM team at Relevance have tested that you lose approximately 0.5% in conversion rate for every form field you add; however, you will lose on lead quality by 10%. People are used to getting answers from Google immediately; that is how Google has trained us. So, to get a great conversion rate and a low price per conversion, make sure you are answering the questions people are asking, and quickly.
Does attribution affect conversion rate?
It is important to agree on what kind of attribution you are measuring. For this article, let us assume last-click attribution. Some of the best digital marketing channels for the highest conversion rates for last-click attribution are remarketing ads, long-tail keyword SEO, mailings to your audience, and referral traffic from industry publications.
What are the most converting marketing channels when targeting UHNWIs?
So, what channels are the most successful in our experience, and what conversion rates can you expect from digital marketing to UHNWIs? Conversion rates for luxury brands can range, in our experience, from 0.5% to 20%, and cost per lead for Very-High-Net-Worth Individuals can start at $28 and escalate quickly from there. For some clients, we pay up to $1,500 for qualified leads.
Best-weighted conversion rate by source
- Google Organic
- Bing Organic
- Yahoo Organic
- E-mail Signature
Best conversion rate by source
- Newsletters – 10-20%
- Retargeting – 5-10%
- Good Referral Editorial Traffic – 5-15%
- Direct Branded Traffic – 2-6%
- Long-tail SEO Landing Pages – 1-30%
- Trustpilot Referrals – 2-8%
- Targeted Search Ads – 1-14%
- LinkedIn Organic – 2-15%
- Instagram – 0-25%
- YouTube 0.2-6%
ROI from Search. What conversion rate can be achieved by SEO/SEM?
Let’s start by channel. Usually, search, whether organic or paid, should provide higher conversion rates and lower cost per lead than social because there is actual intent. People are actually looking for your services, not merely browsing.
SEO can have a very low conversion rate for top of funnel awareness searches, maybe even as low as 0.01% for more generic awareness head keywords, but if the webpage is answering very detailed questions by the client, conversion rates can rise to 5-20% even for real estate sites where brokers are selling properties for more than $10 million or selling rentals for over $100,000 per week. A real estate client selling prime real estate should be expecting $40- $1500 per lead with no price on the listings. Now is that a perfect lead? That is where we have to use the CRM to qualify. The perfect lead could cost as much as $750.
We have seen superyacht prospects searching for more information on ‘yachts for sale’ converting at merely 0.1%, yet people looking for yacht brokers in a particular city converting at up to 10% if the content is right and the web page is answering the question, and adding a level of trust. People are looking for people and a service in luxury, not merely goods.
For SEO and for search advertising, it is critical to get as relevant as possible and command a high Click Through Rate for ads, keywords, for landing pages, and in SEO search results. High CTR automatically leads to a higher conversion rate, and arguably, your visibility will increase as Google takes this as an important algorithm signal. Your keyword choice is vital. Adding the word “luxury” doesn’t necessarily increase the conversion rate. We would advise being as specific as possible. You will get less volume, but higher conversion. For example, villa rental ibiza could be converting at 20% whereas “villas ibiza” at 9%.
Great conversion rates from your content
How do you get a great conversion rate for your content? According to the Google Helpful Content algorithm, you must provide the right answers to the searcher’s questions. User Generated Content is also the buzzword in Marketing these days. “UGC increases conversions by 10% when included in an online purchase path.” (Salesforce)
How to create converting blog posts
Blog posts are hugely underrated content pieces with a great conversion rate. As they are often at the awareness stage, it would not concern last-click attribution necessarily. However, blog posts are a used way to make your prospect interested. The format is important, as is the trustworthiness of the content. If you want to build out Topic Authority, watch these videos by Koray Tuğberk GÜBÜR.
How to create converting social posts
Video is the new image, and seven-second videos are converting well. For example, our client St Tropez House, an agency renting luxury rentals for $100,000+ per week, received four great enquiries after posting a Reel on Instagram. The conversion rate was 20% plus, and they were qualified conversions not ‘time-wasters’. Why did this reel convert? Timely content posted to a UHNWI audience, ready to book. Our team at Relevance understands not only the Instagram algorithms but also the target audience to follow.
How to create high-converting press releases
For a press release to convert, you need to send it at the right time, to the right journalist with a perfect and newsworthy angle. If you do not, the conversion rate will be 0%. If you get it right, you will hit BIG double figures. How to get these three right is another article, but statistics and facts always help to increase the conversion rate and link them to your expert sources.
High-converting YouTube content
Creating high value for your prospects and the right prospects is key. YouTube conversion rates can climb to 25% in some cases, especially for case studies, walkthroughs, virtual tours, recipes and how-tos. The key is to plan well and make sure your audience is primed.
The best-converting content at the bottom of the funnel will be product comparison, facts and figures, case studies, and testimonials.
Conversion rates from newsletters and referral traffic
Newsletters and referral traffic can be a strong channel for conversion rates. Prospects from newsletters are commonly people who are already interested in your products and services. Therefore, if the content is right and the timing is perfect, you can see conversion rates of up to 6% for luxury hotels and jet aviation companies and 2% for private banking and finance with good-sized lists.
Referral traffic usually contains prospects who are already interested in the topic surrounding the services you provide, so therefore, they should be automatically more interested in your products and services. As they are being referred by another website, these prospects have been given a vote of confidence for the content you’re providing in the sales funnel, which often leads to higher-than-average conversion rates and a reduced cost per lead.
Highest converting publications for UHNWIs
These are some of the highest converting publications from our research
- Condé Nast
- Elite Traveler
- The CEO Magazine
- BOAT International
- Harvard Business Review
What conversion rate can I expect from social media?
Social media is notoriously used as an awareness platform for high-value goods and services. So, which social media platforms convert the best for UHNWIs for luxury brands?
Instagram can convert as low as 0.01%, that’s if you’re good enough to get a lot of traffic coming from this channel, but remember, conversions can happen within the platform.
Instagram now allows posts and stories to add links, so the conversion rate has exploded. Whereas before, website visitors and conversion rate through the app was very low – less than 0.5% now you can expect 15% conversion rates.
Beprofit.co user Bob Diaz says: “Pages with over 10k followers can have conversion rates of about 2.2% while lower than 10k followers can have a 1.85% conversion rate.”
We have seen conversion rates for luxury on Instagram up to 15%. With an engaged and primed audience conversion rate will always be higher than average. The Entrepreneur has also suggested you can achieve 15-25% conversion rates on Instagram.
Facebook and Pinterest, thanks to the links and engagement on the platform, can lead to much higher conversion rates.
Twitter, where there is a conversation going on, and arguably higher trust, offers larger conversion rates.
LinkedIn is probably the highest-converting social media platform for high-value B2B and even B2C goods and services where content is aimed at a higher proportion of people that can afford high-value goods or are certainly interested. People advising UHNWIs, like family offices, accountants, lawyers, in-house travel agents, and personal buyers who are acting for the decision maker, can expect conversion rates of up to 15%.
TikTok is definitely a platform that you need to be creating content on if you’re selling high-value goods and services, but again this is an awareness platform and may not lead to conversions. However, we now see the short videos in the Google SERPs, and this could well help this channel to be more effective in 2023 and beyond.
Best conversion social media for luxury brands
- LinkedIn – 1-10%
- Twitter – 0.2-5%
- Facebook – 0.5-5%
- YouTube – 0.2-6%
- Pinterest – 0.5-6%
- Instagram – 0.2-11%
What countries have the highest conversion rates?
Country and language can make a significant difference to conversion rates and price per lead. English often has a lower conversion rate, whereas a particular region and language with fewer and more targeted searches can have a higher conversion rate. E.g. conversation rates from Monaco and Switzerland are always going to be higher than in the USA. Relevance has a UHNWI postcode list; please ask us for this list if you are interested – it is a list of all the UHNWI postcodes in the world. If you target these postcodes, your conversion rate will increase and cost per conversion will decline.
Countries with the highest conversion rate for luxury goods
- Saudi Arabia – 11%
- UAE – 8%
- Switzerland – 7%
- Austria, Australia – 6%
- United Kingdom, Spain, Germany, Holland, Belgium – 5%
- Brazil, Sweden, France – 4%
- Russia – 4%
The Knight Frank Wealth Report states: “Every world region saw an increase in the numbers of UHNWIs between 2020 and 2021 – Americas (+12.2%), Russia & CIS (+11.2%), Australasia (+9.8%), Middle East (+8.8%), Latin America (+7.6%), Europe (+7.4%) and Asia (+7.2%) – except for Africa, where the UHNW population declined by 0.8%.”
Conversion rates by gender and age
Over the last five years, we have seen a rise in younger, more digital natives converting for high-value goods and services. Liam Bailey, Global Head of Research at Knight Frank, said: “The growth in younger self-made UHNWIs (21% of the total) will drive new investment themes and innovation in the near-term.”
At Relevance, we have seen last-click form fill conversion rates pretty equal between ages, with 25-35-year-olds conversion rate at the highest by approximately 10% over second place 55-64 year olds.
Women converted in our study double that of men.
If you are wondering what conversion rates you can expect when marketing luxury goods or high-value goods and services targeting UHNWIs, you should aim for at least an average conversion rate of 1-2%.
However, special, highly targeted campaigns can reach 25%. We have found that the more traffic you have, the overall conversion rate will arguably be lower, but overall you will have more conversions. You will need to know your audience, and then build out a sales funnel, and assign content and marketing channels to each part of that funnel. Each section of the funnel should have a different conversion. You should aim for higher-than-average conversion rates at every stage of the funnel, and then you will have more success in convincing people filling forms at the bottom of the funnel. This is where you will add value to the bottom line. But if you do not have people in the funnel, your cost per lead with be too high, and your ROI will surely be negative.
Relevance is a luxury marketing agency specialised in developing marketing campaigns that reach and resonate with UHNWIs while ensuring a measurable ROI. Contact us to learn more about conversion rates for luxury brands and how our team of specialists can help you.