--- title: Why conversion matters: a toy model | daily.dev description: A toy mathematical model explores the nonlinear relationship between conversion rates and business revenue. Using a model where marginal customer acquisition... canonical: https://daily.dev/posts/why-conversion-matters-a-toy-model-vc3fqqokh twitter:card: summary_large_image twitter:site: @dailydotdev og:type: website og:site_name: daily.dev og:title: Why conversion matters: a toy model | daily.dev og:description: A toy mathematical model explores the nonlinear relationship between conversion rates and business revenue. Using a model where marginal customer acquisition... og:url: https://daily.dev/posts/why-conversion-matters-a-toy-model-vc3fqqokh og:image: https://api.daily.dev/og/posts/VC3fqqOKH.png og:image:alt: Why conversion matters: a toy model og:image:width: 1200 og:image:height: 630 og:locale: en --- > ## Documentation Index > Fetch the complete documentation index at: https://daily.dev/llms.txt > Use this file to discover all available pages before exploring further. # Why conversion matters: a toy model **[Erik Bernhardsson](https://daily.dev/sources/erikbernhardsson)** · 5 min read · 0 upvotes · 0 comments ## Summary A toy mathematical model explores the nonlinear relationship between conversion rates and business revenue. Using a model where marginal customer acquisition cost grows as a slow function of volume, the analysis shows that improving conversion rate by 20% leads to a ~58% increase in both total volume and gross profit. Doubling conversion rate yields a 5.7x increase in gross profit. The key insight is that inverting a slow-growing acquisition cost function produces a superlinear relationship between conversion rate and profit, with the effect being most pronounced in large markets like mortgages or groceries where marginal acquisition costs grow slowly. ## Full article daily.dev links to this article rather than hosting it. Read it at the original source: ## Similar posts on daily.dev - [The Diminishing Returns of CRO: Why Your 50th Test Won’t Lift Like Your 5th](https://daily.dev/posts/the-diminishing-returns-of-cro-why-your-50th-test-won-t-lift-like-your-5th-geplj0pst) · Medium · 0 upvotes · 0 comments - [How to quickly estimate the revenue impact of new product ideas](https://daily.dev/posts/how-to-quickly-estimate-the-revenue-impact-of-new-product-ideas-pmbdatxzc) · LogRocket · 1 upvotes · 0 comments - [Boosting Steam reviews post-release leads to increased conversion rates, says Gamesight](https://daily.dev/posts/boosting-steam-reviews-post-release-leads-to-increased-conversion-rates-says-gamesight-bvqn8amea) · GamesIndustry.biz · 0 upvotes · 0 comments --- Tags: [#ecommerce](https://daily.dev/tags/ecommerce) [View this post on daily.dev](https://daily.dev/posts/why-conversion-matters-a-toy-model-vc3fqqokh) ```json {"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://daily.dev/#organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180},"sameAs":["https://twitter.com/dailydotdev","https://github.com/dailydotdev","https://www.linkedin.com/company/daily-dev-ltd"]},{"@type":"WebSite","@id":"https://daily.dev/#website","url":"https://daily.dev","name":"daily.dev","publisher":{"@id":"https://daily.dev/#organization"},"potentialAction":{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://daily.dev/search?q={search_term_string}"},"query-input":"required name=search_term_string"}}]} {"@context":"https://schema.org","@type":"TechArticle","headline":"Why conversion matters: a toy model","url":"https://daily.dev/posts/why-conversion-matters-a-toy-model-vc3fqqokh","mainEntityOfPage":{"@type":"WebPage","@id":"https://daily.dev/posts/why-conversion-matters-a-toy-model-vc3fqqokh"},"datePublished":"2026-03-26T08:36:09.558Z","dateModified":"2026-03-26T08:39:00.118Z","description":"A toy mathematical model explores the nonlinear relationship between conversion rates and business revenue. Using a model where marginal customer acquisition...","image":"https://media.daily.dev/image/upload/f_auto,q_auto/v1/posts/bfcbddc52c2902eae1b2ef91c6b41f3f?_a=AQAEuop","thumbnailUrl":"https://media.daily.dev/image/upload/f_auto,q_auto/v1/posts/bfcbddc52c2902eae1b2ef91c6b41f3f?_a=AQAEuop","isAccessibleForFree":true,"articleSection":"Erik Bernhardsson","inLanguage":"en","publisher":{"@type":"Organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180}},"author":{"@type":"Organization","name":"Erik Bernhardsson","logo":"https://media.daily.dev/image/upload/s--SlM88DTW--/f_auto,q_auto/v1774514112/logos/erikbernhardsson?_a=BAMAMiWQ0","url":"https://daily.dev/sources/erikbernhardsson"},"commentCount":0,"discussionUrl":"https://daily.dev/posts/why-conversion-matters-a-toy-model-vc3fqqokh","interactionStatistic":[{"@type":"InteractionCounter","interactionType":{"@type":"LikeAction"},"userInteractionCount":0},{"@type":"InteractionCounter","interactionType":{"@type":"CommentAction"},"userInteractionCount":0}],"keywords":"ecommerce","timeRequired":"PT5M"} {"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https://daily.dev"},{"@type":"ListItem","position":2,"name":"Erik Bernhardsson","item":"https://daily.dev/sources/erikbernhardsson"},{"@type":"ListItem","position":3,"name":"Why conversion matters: a toy model"}]} ```