Better sales conversion through measuring

For better sales conversion, you must eliminate waste. It’s easy to waste too much time and money trying to convert customers and waste revenue from failing to convert customers. To speed up the process, you must measure your Sales Conversion Rate.

Before you can improve and speed up your sales conversion rate, you must first measure it. Here’s how.

STEP 1: Count your prospects

First you need to define what a prospect is to you. Does a visitor to your website or product page count? A person who calls or emails about your product or service? Be aware of how you recognise a prospect and start a system now to keep a tally.

STEP 2: Count your sales

If you have a financial system like Quickbooks or MYOB counting your sales should be pretty easy. The software should have a sales report you can view each week or month to extract a simple count. Your bookkeeper can give you a list of the number of sales by product type each month.

STEP 3: Divide your prospects into your sales

Your Sales Conversion Rate is calculated simply as the percentage of prospects that become sales. If you had 450 visitors to a product webpage, and 45 sales of that product last month, then your Sales Conversion Rate for that month would be 45 as a percentage of 450, which is 10%.

How do you use your Sales Conversion Rate?

Your Sales Conversion Rate is an indicator of how well you are selling your wares. It's not the only important indicator of your sales process, but it's a great place to start lifting the bar. When you start measuring your Sales Conversion Rate, you’re naturally going to ask: "How do I improve my sales conversion?"

So here's what you can do: make a list of the changes to your sales process, which you think are likely to impact on your sales conversion, then experiment and measure.

You're probably already performing well with sales conversion in one or two areas. The whole idea of tracking, testing and tuning is that you work out which of the areas are likely to increase your sales conversion the most.

The following questions relate to areas where improvement is often needed:

How well do you highlight benefits rather than just features of your products or services?
How clearly do you ask for the sale?
How tailored is your message to the specific needs of your prospect?
Do you include any bonuses with your offer, such as a free appointment with you, an audio class or free shipping?
Are you using testimonials from your previous customers or clients?
Are you able to acknowledge and answer the common objections to why your prospects aren't becoming customers?
How attention-getting and engaging are your headlines, your sales copy or dialogue?

Next steps

Calculate your own Sales Conversion Rate in the next week or two, then pick just one potential improvement you can make to your selling process, put it into action, and test if it works by tracking with your Sales Conversion Rate.

Just pick one thing to change and test first. That way, you'll know whether it works or not, and avoid wasting time doing more of it if it doesn't work. After that test, you can test another change. Keep this up until you've discovered what works for your business, then you can enjoy smoother sale-ing!

Stacey Barr is a specialist in performance measurement, helping micro and small business owners to move their business results from where they are, to where they want them to be, using powerful, transformational measures.

04 May 09

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6 comments | Add your own

Stacey,
Thanks for a great article. I will discuss this topic with my clients.
With respect to your comments about Step 2, if you want to generate the report you mention, what the business owners sells would need to be set up as an ‘item’ or an ‘activity’. All MYOB products have ‘items’ available to them, however only MYOB payroll products include an option for ‘activity’. The reports are available under Sales-Item-Detail or Sales-Activity- Detail. If business owners wanted to measure their Sales as you have suggested, they may need to reconfigure their current MYOB set-up. It would require setting anything that you wanted to measure and report upon, as an item or an activity. You could speak to your bookkeeper about this, or as a MYOB Certified Consultant I could assist you remotely with this.
I hope this is helpful. Heather Smith from CAMP HILL, Brisbane, QLD | Read my articles
Thanks for the article Stacey! Would you suggest any tools for CMS, sales, leads tracking etc? I run around doing the best follow-up I can through my site but would love a little more streamlined "love" for my customers... Rich from Sydney
Excellent explanation Stacey and Thanks Heather for the tip. Rich, I have been involved in, used, been exposed to more systems than I can remember and my advice is to google CRM and use the simplest one (from your perspective as a user). This is because most of them are so overdone that you'll spend so much time using them you won't have time for customers! I also would like to add one comment to your advice re: conversion rates, Stacey - time taken from commencement to sale. If you have an 18 month sales cycle, you could be out of busy today and not know it for 18 months - that's a lot of debt racked up when you do close the doors! Grant Hyman from Sydney | Read my articles
Thanks everyone for your comments. Great tips Heather - I know there's so much untapped potential in the reporting capabilities of various systems that business owners use, like MYOB, and it takes experts like you to just turn the lights on and show us! Rich, I've automated my leads and sales follow up for online customers using autoresponders, and take a more personal approach with the few offline consulting clients that I take on. Grant's advice is good - keep it simple. Stacey Barr from Brisbane, Australia | Read my articles
Businesses should utilise the full scale of an accounting software not only use it for accounting purposes. In my experience most businesses don’t exploit MYOB or Quicken to their benefit, in other words they don’t use it as a business tool.
Reconfiguring an existing system not only will help to measure performance, it will synchronise business operation with its administration and accounting functions. Judit Nagy from Sydney
This is truly innovative and insightful information- thanks a lot for the post. Noida from us

6 comments | Add your own

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