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Measure your Conversion Rate

Posted 22 April 2013

How well do you convert your new enquiries ?  How many people walking into your shop, visiting your website, phoning you or emailing you are you turning into customers ?

Generally I find that less than 10% of small businesses know the answer to that question.  And if they guess, they tend to get it wildly wrong.

I once worked with a retailer with 5 stores.  The owner was in debt, and the business was losing money.  He had just secured a new credit card and was ready to fill it with new marketing and advertising in a last-ditch attempt to save his business from failure.  I asked him what his conversion rate was – he had no idea, but was certain it was between 66% and 75%.  We measured it over two weeks, and it turned out to be just 34%.

2 out of every 3 people attracted in-store was leaving without buying.  The problem was not lack of footfall, it was lack of successful selling.  For 6 weeks we worked on how his store staff laid out the store, did the ‘meet and greet’, demonstrated product and closed the sale.  Within 6 weeks the conversion rate was up to 56%, and the business was consistently making £20,000 profit a month.  Without spending a penny more on advertising.

Time and time again, I find that a business’s conversion rate is a potential gold mine.  To see whether yours is, then the process of discovery is very simple …

  1. Record every enquiry that comes into your business right now, from today.  Use anything that your whole team can easily use …. a tick sheet, a notebook , a spreadsheet, your CRM system
  2. At the end of every day or at worst every week, measure how many of those enquiries have turned into sales.  Note this down.
  3. Keep recording this information for at least the next month, if not the next 2 – at the end of that period, work out your average conversion rate … and see just how much business you are leaving for someone else to mop up.