Are You Happy with Your Conversion Rate?

The Right Answer Is Always “No”

 

 

“Do you double-dip your Oreo?

Please answer the question yes or no.”

from A Yes-or-No Answer by Jane Shore

 

Conversion rates have different definitions or meanings, depending on the nature of the business or the stage of the sales cycle. And in every case, they carry tremendous importance as an indicator of success and efficiency.

 

Hence the answer to the question, “Are you happy with your conversion rate,” always needs to be “No.” While your rate may be good vs. an industry benchmark or better than last year, there is always room for improvement. Leaning back, fat and happy, indicates complacency and leads to decline.

 

Here are a few examples of conversion rates:

 

  • E-commerce company: a conversion rate is usually measured as the percentage of website visitors who purchased a product or products from your company.

  • B2B business: a relevant conversion rate could be one of several different measurements, like:

• Lead conversion = number of website visitors who converted into a lead or inserted themselves in the lead nurturing funnel

• Sales conversion = number of website visitors who converted into a sale

• Lead to sales conversion = number of existing leads which converted into an active customer.

 

To make things even more complicated, you can break down customer actions into smaller conversions:

  • Email subscription conversion

  • Subscription renewal conversion

  • Content download conversion

  • Social share conversion

  • …and any other customer success metric your company finds valuable

I argue that in this multitude of conversation rates, the X-to-Sales conversions are the most important. Examples would be:

  • Lead to Sales conversion

  • Demo to Sales conversion

  • Quote to Sales conversion

 

They are indicators of how well individuals or teams do as they move along the sales process. And each has quantity and quality components to it when your goal is to increase sales.

 

Here is an example: If your Demo to Sales conversion is 50%, 20 demos a month lead to 10 sales and at $20k per sale to $200k in revenue. You can obviously increase the number of demos and, with a steady conversion rate, increase sales.

 

In addition (not instead), you can look at the quality of target customers you are demoing to. If they are, e.g., better vetted in an earlier stage of the sales cycle, your conversion rate increases.

 

In addition (not instead), you can look at the quality of the demo itself: Is it specific to the needs of the client? Does it highlight the right elements? Is it delivered in an engaging fashion? Does it close with an ask? Addressing any shortfalls will also increase the conversion rate.

 

What happens when your Demo to Sales conversion rate is 100%? First of all, contact me because I may bring you onto my team. Secondly, and more importantly, change everything: bring more and different targets into the demo stage, and with a steady conversion rate, your sales will increase. Change the demo, or skip it altogether, and you may find it is an unnecessary step, and your efficiency will increase. You don’t know what you don’t know until you try.

 

Whether you are an individual contributor in sales or a leader, never be happy with your conversion rates. Always look for ways to improve them.

 

 

Contact us to find out how an interim or fractional sales leader may help you to improve conversion rates.

 

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Jordan Dick - How to Calculate Sales Conversion Rate & Lead Value

Photo by Anne Gosewehr

Sales, SkillsHenning SchwinumVendux LLCconversion, rates, leadtosales, salesconversion