People like to pluck numbers out of thin air for many reasons, and one of those numbers in business happens to be customer conversion rates. Business Leaders sometimes have a vague idea of how they arrived at their magic number, and when pressed may have an impressive justification. When getting to the bottom of the real number via a proper measuring regime its often found that the number is quite a bit lower than the one originally thought. Funnily enough, many people are disappointed to find out their “number” is much lower but spirits can quickly turn around when its explained how much of an advantage that can be. For example, if a business has a conversion rate of 80% then it’s going to be harder to obtain huge improvements but if the business’ conversion rate is 30% then that business can easily double in size (and profit) just by focusing on a few very simple strategies.
Sorting the wheat from the chafe
Finding what a business’ customer conversion rate depends on how customers are being tracked. For the purpose of this discussion let’s look at two kinds of consumer businesses and how they define their leads. An an Online Retailer and a Bricks and Mortar business.
- Online Retailer Lead Conversion Calculation:
Conversion rate % = Total Number of Sales ÷ Total Number of Unique Visitors X 100
E.g. There may be 100,000 sales in a year with 300,000 uniques visitors to a site making the conversion rate 33.33%
- Bricks and Mortar Lead Conversion Calculator:
Conversion % = Total Number of Sales ÷ Total Number of Leads x 100
E.g. There may be 350,000 sales in a year with 800,000 leads making the conversion rate 43.75%
Business to Business operations function differently from the above two types, however the general principles are applied in that model as well. The only difference in a B2B organisation is that the conversions are facilitated through an Account Management team and the conversion rates are based on slightly different parameters.
Three of the best. And it won’t cost a cent.
Managing time through a Demand Diary will clearly show how much time is spent servicing existing customers and how much time is spent chasing down new customers. Once the conversion rate is known activities can either be geared up to make way for more new business interaction or shifted, to concentrate on building and value-adding to existing customers. However the rate and time spent there are three highly effective rules for converting a higher number of sales, and they are:
Number One: The Follow Up
Can you think of how many times you have received an enquiry and said to yourself “I’ll call them back in a minute” and a week has gone by? The follow up shows the customer that (a) you’re interested in their world and (b) their business is important to you. The more responsive the follow up the easier the interaction will be with the prospective customer.
Number Two: Social Proof
Answer the question “why should I believe you?” well before being asked. Show how others have experienced the business through customer testimonials, customer survey responses, vox pop videos or however the market responds best. The key element is that any prospective customer can easily see credibility and reliability as spoken by other customers that the business has served. Social proof moves away from “taking the business’ word for it” and provides solid positive stories.
Number Three: If you don’t ask, you don’t get
Should we ask for the sale? Absolutely. In sales asking for the sale is called “closing” the sale. Look at it another way. Both the customer and the sales person deserve to be rewarded. The customer for finding the product or service that they needed. The sales person for listening to the customer, asking the right questions, and matching the customers need to a products or products.
In today’s fancy world of User Experience, User Interface, UED, SEO, SEM and a bunch of other statistically analysed ways we can measure and track customers, there is no substitute for talking to a prospective person, and finding out what they need by asking them questions. Optimising your conversion rate is following three simple human experiences - following up, providing proof and asking for the sale - it’ll lead to meeting more customers and creating repeatable sales experiences. Spending time on techniques such as these are a “no cost high return” exercise that all tech and non tech people can relate to, no matter what level of HTML code you happen to know.
If you would like to discuss how you can boost your conversion rate for your particular business situation please contact Brett Burden, Senior Business Coach on 1300 971 763.
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