Solved: Low CTR, High Conversion Rate – A Problem?

Hi there,

Thanks for reaching out!

Happy to give you some initial thoughts on your campaign performance. That question you have about your low CTR and high conversion rate is a really common one, but the way most people think about it is, frankly, completely backwards. You're actually in a much better position than you probably realise. Let's get into why that low CTR might just be your secret weapon, and what you should be focusing on instead to really grow.

We'll need to look at the CTR myth... and why your campaign is probably working brilliantly

Right, let's get this out of the way first. The obsession with CTR is a relic from an older era of digital advertising, where clicks were the primary goal. Today, for any business that actually needs to make money, it's a vanity metric. A dangerous one, at that. It tells you how many people clicked, but it tells you absolutely nothing about the quality of those people.

You said you have a 1.37% CTR and a 66% conversion rate. Let's be absolutly clear: this is not a problem. This is a sign of incredible efficiency. What this data is screaming at me is that your ad is acting as a powerful filter. It's so specific, so targeted in its messaging, that it's actively repelling the time-wasters, the tyre-kickers, and the "just browsing" crowd. The only people clicking are the ones who have the exact problem your service solves, and they are ready to act now. You've created the perfect bouncer for your digital nightclub – it only lets in the VIPs.

Think about it. You could easily "fix" your CTR. You could write a vague, clickbaity headline like "You Won't Believe This One Weird Trick..." and watch your CTR shoot up to 5% or 10%. You'd get hundreds of clicks. And your conversion rate would plummet to 1%. You'd be spending more money to get more traffic, only to have fewer customers to show for it. Your cost per conversion would go through the roof. That's not a win; thats a disaster.

I remember one client, a B2B software company, who came to us with the same concern. They were getting a CTR of under 1% on LinkedIn but their demo booking rate from those clicks was insane. Their previous agency had tried to 'fix' it by broadening the targeting and softening the ad copy. Sure enough, their CTR doubled, but their cost per qualified lead went up by 5x. We immediately reversed their changes, went back to the hyper-specific, 'boring' ads and their pipeline filled up again. They were paying for performance, not for clicks.

Let's illustrate this with a simple comparison.

As you can see, the campaign that looks "worse" on paper (Scenario B) is monumentally more successful. You're getting 18 times more customers for less than a third of the ad spend. So, let's agree to stop worrying about CTR. It's a distraction. The real question we need to ask is not "how do I get more clicks?" but "how can I find more people like the ones who are already converting?". Before we get to that, we need to talk about the numbers that actually drive your business forward.

I'd say you need to focus on the only two metrics that matter: LTV and CAC

The real question isn't "How low can my Cost Per Lead go?" but "How high a Cost Per Lead can I afford to acquire a truly great customer?" To answer that, you need to understand two concepts: Customer Lifetime Value (LTV) and Customer Acquisition Cost (CAC).

Customer Acquisition Cost (CAC) is simple: it's the total cost of your sales and marketing efforts to acquire one new customer. In your case, if your 66% conversion rate represents a sale, and your Cost Per Click is, say, £1, your CAC is about £1.52 (£1 / 0.66). That's brilliant.

Lifetime Value (LTV) is the total profit you expect to make from a single customer over the entire duration of their relationship with you. This is the metric that unlocks aggressive, intelligent growth. When you know what a customer is truly worth, you know what you can afford to spend to get them.

Let's run through a quick calculation. It relies on three key pieces of information:

• Average Revenue Per Account (ARPA): What do you make per customer, per month/year?
• Gross Margin %: What's your profit margin on that revenue?
• Monthly Churn Rate: What percentage of customers do you lose each month?

The formula is: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Here’s an interactive calculator. Play around with the sliders to get a feel for how these numbers impact your LTV. You'll quickly see that even small improvements in retention (lower churn) or pricing (higher ARPA) can have a massive impact on what you can afford to spend on ads.

A healthy business model often aims for an LTV to CAC ratio of at least 3:1. Meaning, for every £1 you spend to acquire a customer, you get £3 back in profit over their lifetime. Using our example above with a £10,000 LTV, you could afford to spend up to £3,333 to acquire a single customer. If your sales process converts 1 in 10 qualified leads into a customer, you could afford to pay up to £333 for a single lead.

Suddenly that focus on a cheap click seems completly misguided, doesn't it? This is the maths that separates struggling businesses from the ones that scale confidently. They're not chasing cheap leads; they are investing in acquiring high-value customers.

You probably should define your customer by their nightmare, not their demographics

So, why is your conversion rate so high? Because your ad is, intentionally or not, speaking directly to someone's acute pain. Someone with a problem so urgent, so expensive, or so career-threatening that when they saw your solution, they didn't hesitate. This is the secret. You need to stop thinking about your Ideal Customer Profile (ICP) as a set of demographics and start thinking of it as a problem state.

Forget "Companies in the finance sector with 50-200 employees." That's useless. It leads to generic ads that speak to no one.

Instead, become an expert in their nightmare. For one of our legal tech SaaS clients, the nightmare isn't 'needing document management'. It's 'a partner missing a critical filing deadline and exposing the firm to a malpractice suit.' Your ICP isn't a person; it's a specific, urgent fear. Your current ad is obviously hitting on one of these fears perfectly. Your job now is to articulate it, refine it, and then find more people who are living through that same nightmare.

How do you do that?

• Talk to your converters. Pick up the phone. Ask them what was going on in their business the day they clicked your ad. What was the final straw that made them search for a solution? What words did they use to describe their problem? This is gold dust.
• Map their information diet. Once you've isolated that nightmare, find out where these people go for information. What niche podcasts do they listen to? What industry newsletters do they actually open? What software tools do they already pay for? Are they members of specific Facebook groups or subreddits? This intelligence is the blueprint for your entire targeting strategy on platforms like Meta or LinkedIn.

This is the work you need to do now. Don't touch your ad creative yet. First, get an absolutly crystal-clear picture of the person and the problem you're already solving so well. This is far more important than any A/B test on a button colour. Once you have this, you can start to craft messages that resonate on a much deeper level.

You'll need a message they can't ignore

Once you understand the nightmare, you can craft ad copy that works like a dog whistle. It will be practically invisible to the wrong people but will stop the right person dead in their tracks. Your low CTR tells me you're already doing this well, but let's put a framework around it so you can do it deliberately and consistently.

For a B2B SaaS product, use the Before-After-Bridge framework.

• Before: Describe their current nightmare in vivid detail. Agitate the pain. "Your AWS bill just arrived. It’s 30% higher than last month, and your engineers have no idea why. Another fire to put out."
• After: Paint a picture of the promised land. "Imagine opening your cloud bill and smiling. You see where every dollar is going and waste is automatically eliminated."
• Bridge: Introduce your product as the clear, simple path from their pain to their desired outcome. "Our platform is the bridge that gets you there. Start a free trial and find your first £1,000 in savings today."

For a high-touch service business, deploy Problem-Agitate-Solve.

• Problem: State the problem you solve in their language. "Are your cash flow projections just a shot in the dark?"
• Agitate: Pour salt in the wound. Make them feel the consequences of inaction. "Are you one bad month away from a payroll crisis while your competitors are confidently raising their next round?"
• Solve: Present your service as the clear, authoritative solution. "Get expert financial strategy for a fraction of a full-time hire. We build dashboards that turn uncertainty into predictable growth."

Notice that none of these examples talk about features. They talk about feelings, outcomes, and transformations. This is how you maintain a 66% conversion rate. You're not selling a tool; you're selling a solution to a nightmare. We often use a specialist copywriter for our SaaS clients because getting this messaging right has a bigger impact on performance than almost any other variable. It really can make or break a campaign.

We'll need to look at your offer... and why it's the real hero

Your ad copy gets the click, but your offer gets the conversion. That 66% conversion rate suggests you have an incredibly compelling offer. It's the most common failure point we see in B2B advertising. So many companies ruin a perfectly good ad campaign by sending traffic to a page with an arrogant, high-friction Call to Action (CTA).

The worst offender? The "Request a Demo" button. It presumes your prospect has nothing better to do than book a meeting to be sold to. It screams "I want your time before I've provided any value." It's an instant conversion killer.

Your offer’s only job is to deliver a moment of undeniable value—an "aha!" moment that makes the prospect sell themselves on your solution. It has to be low-friction and high-value.

• For SaaS: The gold standard is a free trial or a freemium plan, with no credit card required. Let them use the product. Let them feel the transformation. A Product Qualified Lead (PQL) who has already seen the value is a thousand times better than a Marketing Qualified Lead (MQL) who just filled out a form.
• For Services/Agencies: You must bottle your expertise into a tool or asset that provides instant value. For us, it's a free 20-minute strategy session where we audit failing ad campaigns. For a marketing agency, it could be a free SEO audit. For a training company, a free 15-minute interactive video module. You must solve a small, real problem for free to earn the right to solve the whole thing.

Whatever you're doing, it's working. My advice is to double down on it. Can you make it even easier to access? Can you deliver the value even faster? Protecting and enhancing your offer is paramount. Your high conversion rate is a precious asset; guard it carefully. A change here could have dramatic consequences, good or bad.

I'd say you need a plan to scale without breaking what works

This is the critical juncture. You have a winning formula: a message and offer that deeply resonates with a specific audience, leading to an incredible conversion rate. The temptation is to scale spend rapidly. But that can often break the magic. As you increase your budget, ad platforms will show your ads to broader, less-qualified audiences, which can dilute your results.

Scaling isn't just about increasing the budget. It's a methodical process of expanding your reach while maintaining efficiency. Here's how we approach it for our clients.

The process looks something like this:

1. Improve your funnel first. Before you pour more money in, make sure the bucket isn't leaky. Can you improve your landing page conversion rate even more? A 10% improvement there means you can acquire 10% more customers for the same ad spend. Can you increase your LTV by improving customer retention or introducing higher-tier plans? A higher LTV means you can afford a higher CAC, giving you more breathing room to scale.
2. Expand your targeting methodically. You've found a core audience that works. Now, build outwards from there. On platforms like Meta, this is where lookalike audiences are invaluable. Start with a 1% lookalike of your existing customers or converters. It's the highest-quality audience you can build. Once that is exhausted, you can test broader lookalikes (2%, 5%) or start testing new interest-based audiences based on the 'information diet' research you did. For one B2B software client, we generated 4,622 registrations at just $2.38 each on Meta.
3. Test new creative, not just audiences. Your current ad works, but you'll eventually face ad fatigue. You need a pipeline of new creative ideas to test. Based on your ICP's nightmare, what are three other angles you could take? Could you test a video ad against your current image ad? User-generated content (UGC) style videos can work incredibly well for SaaS clients. The goal is to always be testing to find new winning combinations of message and audience.
4. Consider other ad platforms. Once you feel you've started to max out your primary platform, it might be time to expand. If you're on Google Search, could you try LinkedIn Ads to target specific job titles? If you're on Meta, could you use Google Search to capture people actively looking for a solution? For a medical job matching SaaS, we reduced their CPA from £100 down to just £7 by finding the right combination of both Google and Meta ads. Each platform has its strengths, and a multi-channel approach is often the key to sustained growth.

Scaling is possible, but it requires discipline. It's less about flipping a switch and more about carefully layering on new tests and channels while obsessively monitoring your CAC and LTV.

You'll need a practical action plan

Alright, that was a lot of theory. Let's make it practical. If you were our client, this is the framework we'd put in place to build on your current success. It's not about radical changes; it's about methodical, intelligent optimisation and expansion.

I've detailed my main recommendations for you below:

This approach protects what's already working while creating a structured environment for growth. You avoid the common mistake of 'optimising' a successful campaign to death. Instead, you build on its foundation.

So, what's next?

You've achieved something quite rare: a high-signal, low-noise advertising system. Your job isn't to add more noise by chasing clicks. It's to amplify the signal.

Following the steps I've outlined—focusing on LTV:CAC, deeply understanding your customer's pain, and methodically testing new audiences and creatives—will put you on the right path. It requires more strategic thinking than just tweaking bids and headlines, but it's the only way to build a sustainable, profitable customer acquisition engine.

This is precisely the kind of work we specialise in. We help businesses move past the vanity metrics and build scalable campaigns based on real business objectives. We've helped SaaS companies reduce their CPA from £100 to £7, generated over 5,000 software trials for another at just $7 per trial, and helped countless others find and scale their most profitable advertising channels.

If you'd like to have a chat about how we could apply this kind of strategic thinking to your business in more detail, we offer a free, no-obligation 20-minute strategy session. We can take a look at your current setup together and give you some more specific, actionable advice you can implement right away. It's often the quickest way to get clarity on the next steps for growth.

Either way, you should be very pleased with your current results. You've cracked the hardest part of the code. Now it's just a matter of scaling it up.

Hope this helps!

Regards,

Team @ Lukas Holschuh