Conversions Are Great, Customers Are Better
Advertisers are rightly obsessed with conversions in performance-based marketing. Sometimes you might be missing a trick though. Let's talk customer growth through advertising.
Date
18 Nov 2025
Topic
Google Ads
Reading time
7 Minutes
Why Not (Just) Conversions?
Every advertiser knows the feeling of seeing a campaign conversion rate spike. A sale. A sign-up. A download. That satisfying metric signals success, validates your budget, and proves your marketing is working. For years, the gold standard in digital advertising has been Conversion Rate Optimization (CRO). We all know it's a vital part of the toolkit.
But what if we told you that your relentless focus on conversions might be holding your business back?
A conversion is a transaction. A customer is a relationship. And while transactions provide immediate gratification, only relationships drive sustainable, profitable growth. What if you could shift focus from quick wins to optimising for the long-term relationship?
The Conversion Trap
The drive to maximize conversion volume often leads to what we call The Conversion Trap. It's the moment when marketing teams prioritize short-term numbers over long-term profitability.
High conversion rates can be misleading. They might be achieved through strategies that devalue your offering, such as:
Excessive Discounts: A customer who converts at a 70% off flash sale may never pay full price again, rendering their conversion unprofitable.
Misleading Ad Copy: Drawing in volume with promises that don't match the product, leading to high churn and negative reviews.
The "One-and-Done" Buyer: Targeting users purely based on a low Cost Per Acquisition (CPA), ignoring whether they are a high-intent user who will return.
When you only measure the instant of conversion, you are optimizing for a single touchpoint. You are failing to measure the true health of your business: retention and lifetime value.
Optimising For Customers: The Sophisticated Advertiser Approach
We think of customer analytics and optimisation as "sophisticated advertising": the act of advertising with an extra helping of class and intelligence. If that sounds elitist, please read on and then send us a LinkedIn DM with what you think.
It starts with rejected ad platform data as the be-all-and-end-all of performance; rather customer analytics & business performance are key. Only by integrating channel metrics (e.g. CAC or customer acquistion costs) with business metrics (e.g. LTV of lifetime value) do you really start to understand advertising holistically. This allows you to move from the instantaneous Cost Per Acquisition (CPA) metric to adding the powerful combination of Customer Lifetime Value (LTV) and the LTV:CAC Ratio.
The LTV:CAC Ratio is a really useful metric. It tells you: for every dollar you spend to acquire a customer, how many dollars will they spend with you over the entire course of their relationship? A high conversion rate with a low LTV is a broken model. A moderate conversion rate with a high LTV is a wealth-creation engine. LTV has different definitions, but could be defined as RFM:
Recency, or how recently did they last purchase?
Frequency, or how often do they buy? and
Monetary value, or how much have they spent?
The Advertising Action Plan
Here are a few recommendations we have:
Decide whether this is realistic. Do you think you can grow your business through smarter acquisition of customers? What is your hypothesis? Have you observed different segments of customer or characteristic that mean higher value for the business? Perhaps a certain location, user behaviour or firmographic? Think of several as that helps in this exploratory analysis.
Do a value-based analysis. Use your hypotheses to dig into your existing customer data to discover what these classifications really mean in terms of value. If you don't have the data available, how can you put data collection in place so that in 3-6 months you will have that data? What would it mean in terms of monetary benefit to the business? What metrics would you seek to change exactly? It might be lower CAC, or better retention.
Consider the cost of action. If there was clear benefit in certain customer segments, what would the cost be in activating your plans, in terms of money, time, etc.? Is it simply a matter of changing ad targeting, or will there need to be new landing pages or even an entire new set of creative assets?
Put it all together in a plan. Present the hypotheses, costs and benefits to the wider team and agree on next steps.
We find this exercise is beneficial even if it doesn't lead to any huge immediate changes. Customer insight can help in many different ways and distributing insights across the team and business can help everyone understand customers a little better.
