Quantity versus quality applies to almost everything in your business. When you think of quantity versus quality what comes to mind for you?
When I think about quantity I think about things like McDonald’s – fast food, get through fast, inexpensive, fast paced, high volume.
When I think of quality I think about this like Hy’s Steakhouse – slow, nice high-quality environment, higher price point, more luxurious, more elegant.
The reality of those differences is what makes one a quality experience versus a quantitative experience.
Quantity is really important – it may not be very sexy, but if you learn to get intimate with your numbers and you learn how to break them down, your quantitative numbers will show you a direct correlation to qualitative behavior that can drive the quantitative results.
In a previous post, we talked a bit about conversion rates – traffic times the number of people who buy equals conversion. So, if you have 100 people, and 10 people buy, then your conversion rate equals 10%.
This formula applies to anything whether it’s website traffic or traffic into your bricks and mortar store.
And, if you take your total sales and multiply it by the number of people who buy, that equals your average sale. Really simple stuff.
Back to our 100 people…
I see the 100 people who make up your traffic as quantitative. The 10 people who bought? That number is a little bit qualitative.
When I think about qualitative I think about things like client experience – it’s a little bit nebulous. It’s not exactly black and white because the experience will be different for everyone. I think about retention rates – do people buy from you and then continue to buy from you? When people buy from you – do they buy one thing, or do they buy multiple things? Do they spend a little bit, or do they spend a lot? Do they return what they buy or do they keep what they buy?
You want sales that actually stick.
If you get 100 people into your business, and 10 people buy, but 8 of them return what they bought that means that your quality is low. Either your product or service is defective. Or you’re selling people the wrong thing.
If you can affect traffic (the 100 people) that is a quantitative thing. You can also affect your ability to convert people (the 10 buyers) when they show up on your website or in your store. The way that you do this is through the quality of your customer service or your client experience. If you do a really good job of that, then you can move that number of buyers up to 15, now your conversion rate is 15%. That increases your sales from $1000 to $1500 – that is a 50% increase in sales!
What does that mean? It means that from a qualitative perspective you became more effective at closing business.
Taking this a step further, if you increase your average sale to the same number of buyers then you can increase your sales even further. You may think of your average sales as a quantitative number, but you can turn that into qualitative by offering people high quality, or a wide range of choices.
When you are serious about your business and you understand your numbers, you understand the impact you can make and all of the things you can do, to move the needle.