How to Raise Revenue and Cut Expenses Immediately!
The term “conversion rate” may be familiar to you. You might have, but are you consistently measuring it, or are you just making educated guesses?
If you’re making sales but have no idea what conversion rate implies, you’re leaving money on the table. In addition, your bottom line will benefit if you can increase your conversion rate.
Exactly exactly does “conversion rate” mean, then?
The conversion rate is the proportion of people who contact your company but do not purchase. If ten people called your company and you wrote down their information, you can quickly see how many of them eventually purchased by following up with them. That means your conversion rate is 30% (3 sales out of 10 potential customers).
When business owners finally grasp the significance of this seemingly insignificant metric, it changes everything. You are entirely off base if you don’t know your conversion rate, but “I guess” is around 50%. Nearly everyone exaggerates their own perceived success rate. This is because it’s not uncommon for folks who claim they’re interested in buying and indicate they’ll come back later to end up not buying at all. But you can’t tell if you don’t track all inquiries and make an educated guess about which ones result in sales.
Be prepared to be shocked by your conversion rate measurement. I’ve helped shop owners who thought it was 75% but only got 38%. I’ve worked with service providers who estimated 50% but only had a 13% failure rate.
When I tell them it’s just 13%, they get down on themselves, but I’m thrilled! Because a 50% conversion rate can never be increased by 50%, but a 13% conversion rate can be tripled while still leaving an opportunity for improvement.
Did you know that a boost in your conversion rate will immediately and noticeably affect your revenue and bottom line? This means that a 50% increase in conversion rate (from, say, 24% to 36%) will also result in a 50% increase in revenue. This is because your number of paying consumers will increase by 50%. And you may boost your conversion rate, sales, and profits with zero additional marketing expenditure.
How, then, do you evaluate it? Two or three pieces of data for each customer who contacts you are a prerequisite. Details such as the enquirer’s name, number, and nature of inquiry are required.
You may then use this data to see how many customers who expressed interest in doing business with you made a purchase. Your company’s inquiry-to-customer count could take several days to complete. Due to the time it takes customers to decide, the typical turnaround time for a sale to be finalized after an initial inquiry is one month.
Each employee has a unique conversion rate, which you will see. What gives? That is a very valid query. The only way to address a problem is first to quantify it, but that’s impossible before you know how big the gap is.
The crucial question, then, is how to boost your conversion rate.
At least 80 methods exist! Looking for a list of the top ones? The results are in…
1 Get familiar with DISC types. DISC profiling has to be the least-known approach to understanding people, yet it’s also the most valuable skill you can acquire for business success. The DISC profile provides valuable insight into four vital behavioral characteristics. Learning DISC profiles will help you understand why some customers want to be best friends with the person they buy from and why others will avoid doing business with overly pleasant salespeople. About half of all consumers make all purchases on the spot. At the same time, half of us would rather dwell on it for a day or two. I teach DISC to all my customers, and within weeks, their sales (turnover and profit) improve by 20%-300%.
Guarantees should be offered in writing. Since most individuals are wary about making financial commitments, a contract can go a long way toward easing their minds and encouraging them to move on confidently. What can you put in writing that you are not already providing? What about the importance of not making a mess when providing a service? If they aren’t satisfied with their purchase, do you offer refunds? Because few consumers request a refund, many stores discourage sales to the general public.
Create a one-of-a-kind image for your company. Again, this tactic is potent since it prevents sales losses due to price consumers by making you “appear” distinct from the competition. It’s simple, and using assurances like the ones listed above will set you apart.
Get a handle on body language. Five-fifths of your message is sent through body language before you even say a word. Though well known, few take advantage of it. Very few! Get yourself a book on the subject and give it a shot. Body language conveys sincerity, and sincerity leads to sales.
5. Vary the language you use while greeting someone in person or over the phone. Store employees frequently use phrases like “no thanks, just looking” in an effort to make a sale. That’s because their words prompt you to react in a certain way. Alternate the way you greet people and observe what occurs. The same happens if you end a phone greeting with “name speaking”; people will assume you’re an idiot and start a sentence with “I’d like to talk to someone about…” If you cannot assist me, please refer me to someone who can. See what happens when you try to avoid using your voice.
Do you now see that there are many things you can do to increase your conversion rate? Before anything can be better, it must be measured. Take one day, one week, and one month to compile it. Once you accomplish that, you’ll have an effective KPI.
Implementing the Sales Conversion Rates of Business Owners Over the past few months, I’ve seen hundreds upon dozens of increases in my profits. One company I worked with went from a 3.5% conversion rate to a 75% conversion rate in just six months, increasing costs by 35%. How much of a rise in revenue is that? I have no idea, but it sure is big!
I also did this with a store. A sales system I co-created with them increased their conversion rate from 68% to 100% in the first week of using it. The mark never went lower than 82% again.
If you don’t improve your conversion rate, your marketing won’t generate a sufficient return on investment to cover costs. If you can increase your conversion rate by 100%, not only will your sales and advertising replies treble, but you may reduce the frequency of your advertising by 50% and still make a profit.
This is the last thing I want to say to you… If you haven’t measured it, you can’t expect to improve it. Your firm will flourish if you learn to master measurement.
Using conversion rate strategies and numerous other methods, Tim Stokes has increased profits dramatically for multiple companies. His Academy of Business Mastery is the world’s most practical online business course. If you want more time, money, and independence as a business owner, you should check it out.