Hit That Sales Conversion Lever!
Sales conversion rate determines your revenue. Period. What is your conversion rate? If you’re not sure what it is, can’t shout it out from memory, or you know your conversion rate is something you definitely want to increase…this episode is for you!
There are a lot of different conversion rates you can track in your business and I’m going to point you in the direction of the only ONE you need to keep an eye on to increase revenue. Why? Because measuring and tracking gives you the power and the knowledge to improve how you’re doing business which will in turn grow revenue (sometimes with less effort!).
Listen in and we’ll uncover the 10 factors influencing your sales conversion rate that go undetected behind the scenes, why these factors are deciding your revenue, and how you can positively affect them. Put it this way, for each factor you positively influence it will guarantee you a higher revenue—it’s not magic, it’s basic math!
It’s time to take control of the metrics deciding your business revenue. Grab your earphones, start the car, or find a quiet space and let’s get to work on the numbers in your business so you can become extraordinary at this thing called entrepreneurship.
What’s in This Episode
- Why you NEED to know your sales conversion rate!
- How to measure it
- 10 hidden factors that determine how effective you are at selling
- Why people are not buying from you
- How conversion rate decides your revenue
- My top 3 secret weapons for a high (like 90-95%!) sales conversion rate
- What’s standing in the way of you increasing profits
What To Do Next
- Join The Strategy Lab, Lisa’s insider entrepreneurial community that is learning, tackling, and coming together to support and challenge each other on all things business. Click here to get on the waitlist.
- Join Thought Readers and connect with other like-minded entrepreneurs in this popular book club for business owners.
- Subscribe to receive this podcast and regular weekly strategies to grow and shape your business. You’ll also be the first to know about upcoming courses, programs and exclusive LIVE training.
- Join the conversation on Instagram, Facebook or LinkedIn and share your insights from the show.
Let’s talk productivity! Next week for episode 30, Tanya Dalton, best-selling author, productivity expert, and business owner, is in the house to get real about how the time and energy you spend working on your business affects your results. Stay tuned!
Books and Links Mentioned in This Episode
- Pilot to Profit by Lisa Larter
CLICK HERE TO OPEN THE FULL TRANSCRIPT
Lisa Larter (00:01):
Welcome to, She Talks Business. If you’re an entrepreneur, business owner or aspiring mogul, chances are you want to learn more about marketing and mastering and monetizing your business. She Talks Business is where you’ll learn all of that and more. My name is Lisa Larter and I’m an entrepreneur, high school dropout, wiener dog enthusiast and your host. Let’s get started.
Lisa Larter (00:25):
Welcome to She Talks business. I always feel so silly when I say that because you obviously know you’re listening to She Talks Business because you press the button that says She Talks Business. This is Lisa, and today we are going to talk about one of my favorite topics, it’s a topic that tends to make business owners squirm, and that topic is conversion rate. Because I believe that when you really understand the power of conversion rate, you can influence massive growth in your business. And when you understand how to measure conversion rate, you can basically reverse engineer the results that you want to get. So we are going to dive into that.
Lisa Larter (01:09):
I hope you enjoyed episode number 28 on generating income on demand. I would love to hear from you if you went out and did something to try to make $100 and got success. Share that with me. Email me. Send me a message on Instagram. Tell me what you did or what part of that show really, really resonated with you the most? There’s nothing that would bring me more joy in my life than to know that I empowered someone out there listening to really feel like they have more control over their ability to generate income in their life and business. I really feel like I was blessed with the ability to do this. Stephanie had alluded on that show about borrowing courage for me to learn how to do it in her business, and I hope that my courage and my practicality around that topic rubs off on you in some way to help you as well.
Lisa Larter (02:15):
So before we dive into conversion rate, there are two quotes that I want to share with you that I think are really, really powerful. Quote number one is by Jeff Eisenberg. “It’s much easier to double your business by doubling your conversion rate than by doubling your traffic.” So true, but too many people focus on doubling traffic instead of doubling conversion. Quote number two is by H. James Harrington. This is really important, so listen closely. “Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. And if you can’t control it, you can’t improve it.” I want to help you learn how to measure, understand, control, and improve sales in your business through conversion rate.
Lisa Larter (03:24):
So let’s talk about what is conversion rate? In its simplest form, it’s the percentage of yeses out of total traffic. Doesn’t matter what kind of traffic it is. If you have a bricks-and-mortar retail store, it’s the percentage of people that walk across the lease line out of all of the traffic that comes into your store that buys something. If it is website traffic, it is that percentage of people that landed on a sales page that clicked the Buy button out of the total traffic. If it is inbound leads, it is the percentage of inbound inquiries that you have conversations with that turn into paying customers. If it’s outbound marketing, it could be the number of people that actually bring a coupon into a store, or it could be the number of cold calls that you make that result in an appointment where somebody buys something. Really, it’s about the wins out of all of the people who are potentially interested. It’s about taking somebody who’s interested to someone who is buying. And the percentage of people that buy versus the percentage of people who browse, that is your conversion rate.
Lisa Larter (04:39):
So, what is a conversion rate? It is the number of buyers out of the total number of leads or traffic. For example, one buyer out of 10 leads or 10 traffic sources is a 10% conversion rate. 10 buyers out of 100 is a 10% conversion rate. 20 buyers out of 100 is a 20% conversion rate. It is always the comparison of buyers to traffic. You can improve your sales by either increasing the traffic and the conversion rate stays the same. So, for example, if your conversion rate, you have 10 people that walk into your store and one buys, your conversion rate is 10%. If you increase your traffic to 20 and your conversion rate stays at 10%, you now have two sales, all right? So you can increase your traffic, and if your conversion rate stays the same, you will increase the number of sales you have.
Lisa Larter (05:43):
At the same time, you can improve your conversion rate, which is what the first quote was about. You still have 10 people that walk into your store, but instead of selling to one, you sell to two. Now your conversion rate has moved from 10% to 20%. Now, if you have a conversion rate of 10% on traffic of 10 and your average sale is $100, you’ve made $100. 10 people, one sale, $100. If you increase your average sale to $200 and you still have the same 10 people in one buyer, you now have $200 in sales. So those are the three variables that affect the sales result. You have to decide when you are looking at conversion rate in your business what your problem is. Do you have a traffic problem? Do you have a closing or conversion problem, or do you have a pricing problem?
Lisa Larter (06:42):
And so we’re not going to talk a lot about the pricing problem today because that’s not what the show is about, the show is really about conversion. So we’re going to talk more about traffic, and we’re going to talk more about the percentage of people that you convert. But those three things, if you’re looking at conversion in terms of how it relates to the money you make, you have to also look at the dollar for your average sale. There are different ways that you can measure conversion rate that are not necessarily sales-related. Sometimes if you are trying to convert a webinar registration page, for example, that would be a form of conversion rate. You’re trying to build your list, the number of people that land on a specific page that opt in, that would be a conversion rate. So these are very tangible things where you can measure the percentage of people that say yes to what you’re trying to get them to do out of the entire group of people who landed in that space.
Lisa Larter (07:43):
When it comes to your business, there are probably three different ways that you might be looking at conversion rate in terms of sales. One is probably your social reach. So out of all of the social media traffic, whether it’s organic or paid, that lands on a sales page, what percentage of traffic turns into a purchase? The second might be an inquiry. This is where somebody emails you or phones you or walks into your place of business. And of all the people that do that, what percentage result in a purchase? Then the third might be proposals. So you get an inbound lead and you need to send a proposal out. Well, as a business owner, what percentage of proposals issued turn into paying customers?
Lisa Larter (08:34):
You can measure all of these things, you can measure any of these things. The thing that is most important is that you measure the same way every time. Because if you don’t measure the same way, if one day you measure the traffic that walks in your store in comparison to those that buy, and then the next day you only measure the women that walk into your store and buy, well, now you’re changing the scoreboard. You’re not measuring the same thing. So as a business owner, you have to decide what measurement you are going to track and then track the same thing over and over again so that you can see the trend and the change in the results. Because the goal is to improve your results.
Lisa Larter (09:19):
So why does this matter? It matters because it allows you to really differentiate between traffic and buyers. It matters because it allows you to identify problems with your website and/or your sales process. If you own a bricks-and-mortar store, I’m sure you have run into situations before where the one day of the week that you’re not there, your sales suck. Well, that’s a conversion problem. It means that the people on your team are not as good at converting customers as you are. But if you have the same problem on your website, you have one page that converts great and another page that doesn’t convert at all, you need to look at those two pages and figure out what is the problem on your website.
Lisa Larter (10:04):
Once you know what the conversion rate is, you can then start to influence it. Once you know what the conversion rate is, you can then reverse engineer it. I’m just going to grab my trusty little calculator here, and I’m going to use the $100 analogy. If one person buys and you have $100 in sales and you want $1,000 in sales, if you take $1,000 and you divide it by 100, which is your average sale, you need 10 buyers. But if you only close one out of 10, then you need 10 times 10, you need 100 people to entertain buying from you in order to get 10 to buy. So if you want to do $1 million in sales, you need to reverse engineer it that way to figure out how much traffic do you need.
Lisa Larter (11:00):
Now, obviously, there are variables, right? Your traffic could be the wrong traffic, and you may need to change your traffic. Or it could be that you’re just not a good salesperson and you need to improve how you sell. You can’t actually unpack those things and look at them in isolation unless you start tracking them consistently, which is why understanding conversion rate is really, really important. Now, I know I’m talking about this, and I’m passionate about this, and it’s something that I’ve looked at my entire life. I mean, in retail, you’re constantly looking at your traffic numbers. You’re looking at the number of sales. You’re looking at your average sale. You’re looking at your items per sale. So if all of this conversation where I’m talking about these metrics are making you a little bit uncomfortable, or maybe you are a little bit confused, you might want to go back to the introductory episode, episode 24, where we talk about money measurements and metrics, or even episode 25 where we talk about the myths you buy into about money.
Lisa Larter (12:04):
This whole season is full of money and numbers and measurements that I know for me, they’re super exciting. I love looking at the numbers, except for when the numbers aren’t good because then I feel tension and stress and discomfort around changing them. But for people that are not used to looking at the numbers, I know it can feel overwhelming. So please don’t shut down. Please continue to embrace and learn and look at these things because they really can help you run your business better, and they can make it easier for you to sell and generate the income that you desire.
Lisa Larter (12:44):
So, I want to talk about some ways that you can actually positively influence your conversion rate. Number one, you can increase the amount of traffic that you get to your place of business or your website. Number two is you can increase the amount of qualified traffic or leads that come to your website or place of business. Let me distinguish the two. You can increase traffic by throwing $5 a day at a Facebook ad and marketing to everybody and their dog on Facebook. That’s like a huge wide range of traffic. But you could get smarter and let’s just say, I don’t know, you are a specialty shop that sells to business owners that own Dachshunds. You could really, really, really qualify that audience and market to a smaller niche. So your traffic might not be as high, but the responsiveness will be higher because they are more qualified. So it’s not just about getting more traffic, it’s about getting more of the right traffic. Because when you get more of the right traffic, then you are going to generate more leads.
Lisa Larter (14:02):
You also want to think about how do you do a better job of piquing people’s interests. There are so many ways that you can do this. One, through copywriting, ensuring that your messaging is interesting to people, that you’re using the right messaging that resonates with your buyer. Another is being enthusiastic and likable in terms of how you interact and build relationships with people. You really want to invoke curiosity and gather interest from people through your marketing. Maybe you need to also improve your timing, meaning your sense of urgency. Are you responding to people who reach out to you quickly? Are you ignoring people that walk into your store or are you saying hello the minute they cross the lease line? Are you doing a good job of being responsive?
Lisa Larter (14:58):
Because there is data out there, and I don’t have the data, but there is data out there around the first-to-respond sales conversions, and they are significantly higher than the second attempt to respond. I know as a consumer, as a buyer, I have had people get back to me a month after I’ve inquired about buying something, and guess what? They’re not going to get the sale because I’ve already bought. So your sense of urgency in terms of responsiveness is a key factor in being able to influence your conversion rate. Number five, just learn how to be a better salesperson. Have a sales process. I talk about selling in my book, Pilot To Profit, and I plan on doing an entire season on selling, how to sell, how to get comfortable selling, how to eliminate the discomfort of selling, how to sell without selling, all of that kind of stuff.
Lisa Larter (15:55):
But becoming a better salesperson is really an important part of conversion. Selling isn’t telling, selling is helping someone make a buying decision. When you put pressure on yourself to be a good salesperson, you often come off as being salesy. People love to buy, but they do not like to be sold to. So honing the craft of salesmanship is really important.
Lisa Larter (16:20):
Number six, this is probably a no-brainer, but ask for the sale. People often dance around the sale. They don’t ask people what they would like to do. “Would you like to buy this? Would you not?” You don’t go to Amazon and have a yellow button that doesn’t say Buy Now. It’s pretty direct, right? “You want to buy the book? Buy now.” That’s them asking for the sale. Can you imagine if you went to Amazon and there was no button and somewhere in the copy that described it, there was a link that wasn’t hyperlinked, and you had to find that hyperlink and click on it, and that was the only way you could buy? Well, if they made it that difficult, they wouldn’t be the leading company that they are. Don’t make it hard for people to buy, learn how to identify buying signals and ask for the sale in your sales process.
Lisa Larter (17:12):
Number seven, follow up and solidify the sale. Follow up and do what you say you are going to do in the sales process. Because when you don’t do what you say you’re going to do in the sales process, you run the risk of people refunding or returning or reneging on what they said they want to buy. So it’s important that you follow up, follow through, and do what you say you’re going to do for your customer rapidly. Which leads me to number eight, which is reduce buyer’s remorse. You reduce buyer’s remorse by making people feel good about the decision that they made and making them feel like they’re already in it. When you have to wait a really long time to get something, it’s almost as bad as having to wait for somebody to respond. So the quicker you can actually move into fulfillment and action and making people see how their money is being used to solve the problem that they have, the better.
Lisa Larter (18:15):
Number nine, overdeliver. Do whatever you can to overdeliver, because when you overdeliver, you end up with happy customers. And guess what? Happy customers buy again. But unhappy customers go away. So when you overdeliver, you have a better chance of your existing customers spending money with you a second, a third, a fourth, a fifth, a sixth time. And number 10, this is really the secret sauce, and I know it’s going to make some of you uncomfortable, it makes me uncomfortable too, but ask for a referral. And if you’re not comfortable asking for a referral, at least ask for a recommendation or a testimonial, because social proof will actually help you to attract more of the right traffic. Because a lot of people are creeping you before they’re deciding whether or not they want to do business with you. So you really want to get referrals and recommendations in your business as much as possible.
Lisa Larter (19:20):
So now I want to talk to you about three not-so-secret-but-maybe-secret-to-you methods that I use to increase my own conversion rate. One, I eliminate unqualified leads, and I spend more time thinking about who my ideal buyer is. A lot of business owners fall into the trap of trying to serve everyone all the time. I do the opposite, I try to actually talk about who my ideal customer is, and I try to talk about what it costs to work with me on a regular basis because I want to eliminate unqualified leads. Because I don’t want to spend my time talking to unqualified leads, I want to spend more time connecting with the right buyers. And so, you can do that by talking about who your ideal buyer is. In my case, I do a lot of work in a coaching, consulting, and fulfillment space with business owners that have businesses that are half a million dollars a year and higher. Some of my best clients are over $1 million a year in business, and they work with me as an advisor, and they work with our team on implementation services.
Lisa Larter (20:35):
The people that work with me in a coaching and/or advisory capacity are investing anywhere from 25 to $75,000 a year working with me. As soon as I say those things, if you are listening right now, you are either qualifying or unqualifying yourself. And that’s intentional. But you might be unqualifying yourself for right now, and you might be aspiring yourself for later on. And that’s not a bad thing. You now know where you need to get to in order to be a good long-term advisory client with me, and therefore, you’re not coming to a phone call with me feeling uncomfortable because the fee structure is too high, but you’re looking at it as, “When I’m ready, I’m going to do this.”
Lisa Larter (21:25):
At the same time, you might be like, “I want to fast-track my business, and I want to invest that money because I want help right now.” Like Stephanie Rainey was when I worked with her in her swim school business years ago. She wasn’t at that level, but let me tell you, her level of commitment, her level of willingness to do the work was, which is why she got to that level. Number two, my number one secret is really my sense of urgency. I am responsive. If you reach out to me, you’re going to hear from me typically same day, worst-case scenario, within 24 hours. If you don’t hear from me until 48 hours later, something’s gone wrong somewhere. Because I know that sense of urgency and acknowledgement is one of the most important things you can do.
Lisa Larter (22:15):
It’s funny, I was talking to a client of mine who does D&I work. She was talking about belonging and how important it is for people to feel like they belong. I believe sense of urgency is tied to belonging. I believe that when you are responsive to people, you make them feel like they are in the right place, they reached out at the right time to the right person. And so that to me is a secret weapon in terms of conversion rate. And then number three, figure out what works. Figure out what works in your sales process and practice doing more of that.
Lisa Larter (22:54):
For a while in my business, what I was doing is I was putting together these proposals that were pretty… Like there were expensive proposals, and it was taking a lot of time and work to put these proposals together and nobody was moving forward on these proposals, and it was really, really discouraging. And then I decided to employ what I call the second sale strategy, where instead of selling the big proposal, I started selling the first step. And that first step is a five to $10,000 investment to do strategy work with me. And lo and behold, what happened is my conversion rate went up to almost 90% of people that inquired about that were interested in doing that, and then 90% of the people that did strategy were interested in doing the follow-on coaching, advisement, or implementation work. So sometimes you have to practice different things in your sales process in order to identify what works best and then do that thing more.
Lisa Larter (23:57):
But you can’t do that if you don’t pay attention. In one of my coaching programs years ago, I encouraged people to create a one-pager where they evaluate their own sales skills at the end of every call. They literally take notes on how they did during the sales conversation, and they track the number of people that said yes and the number of people that said no. And they literally do a debrief to try to understand what they could have done differently or better to convert more business. They are committed to the craft of learning how to sell better. If you focus on all of these things, you can transform your business.
Lisa Larter (24:38):
But don’t focus on one in isolation of the other without understanding what it all means. Don’t just go all in on traffic without understanding the right traffic. Don’t go all in on more lead calls without understanding what is it that I need to do to convert more of those conversations from browsers into buyers. And then stop looking at just the traffic and conversion and start looking at the average sale and the average lifetime value of a customer, so that when you look at your big, hairy, audacious goals for your business, you can reverse engineer what your average sale needs to be and how many customers you need and how much traffic you need in order to reach those goals. You want to measure the same way all the time, and you want to keep score and pay attention to what works.
Lisa Larter (25:34):
The one thing you want to avoid doing is you want to eliminate familiarity in the sales process. Everybody tells you you need to build rapport when it comes to selling, and I do agree, you need to build rapport, but I’ll tell you, too much rapport will derail your sales conversation. Because all of a sudden, somebody goes from a lead to a friend. The conversation changes, and all of a sudden, you lose the footing that you were on in terms of offering a product or a service that they needed to fix a problem because you’ve spent too much time talking about the fact that they’ve got a miniature wire-head dachshund like I do. And so now you’ve gone down the rabbit hole of talking about dogs instead of talking about the fact that they were looking for something else. So don’t allow familiarity and rapport to take you away from what the person is looking for help with.
Lisa Larter (26:34):
All right, next episode, episode number 30, can you believe it, is with Tanya Dalton. Her new book, On Purpose, drops October 26th. She is our guest on October 25th. She is a friend and colleague of mine. She is fantastic. She is the woman who helped me really get clear on what I wanted to do in terms of how I run this podcast. You will not want to miss out on the interview with her. She’s absolutely lovely, and we are lucky to have her join us. She’s going to talk to us about prioritization and focus and how prioritization and focus really does influence money, measurements, and metrics in your business. We all waste a lot of time. And if time is money, the time we are wasting is costing us money. But we don’t always look at it that way, so this conversation with Tanya is going to be really, really, really enlightening.
Lisa Larter (27:38):
And just a shameless plug if you’ve listened this long, if you are considering joining us in The Strategy Lab, we are going to be starting to prep for our Q4 plan… not our Q4 planning session, it is our Q4 planning session for 2022. If you’d like to know more about that, you can join the waitlist at lisalarter.com/the-strategy-lab. I’ll put that link in the show notes as well.
Lisa Larter (28:08):
All right. Thank you for being here. Thank you for listening. Conversion rates is a hard topic. If you have questions, we have a call after… We’ve got Tanya coming up, we have another call. We do have a Q&A call coming up at the end of this season. So if you have questions about conversion rate, where you’d like me to go deeper, please email them to firstname.lastname@example.org, and I will be happy to cover them on our next show. Thanks for listening.
Lisa Larter (28:40):
Thank you for joining me for this episode of She Talks Business. If you enjoyed the show, you know the drill, leave us a review, tell someone about it and join the conversation on social media. Thanks for listening and until next time remember, done is always better than perfect.