For many companies, growing their profits and revenues constantly ranks as the #1 priority. Yet, for many of them, the best and easiest way to do just that is rarely focused on. Or it is given lip service. What is it? Conversion Rate.
Conversion rate is the percent of leads that are turned into sales.
For companies that operate off call-in leads, it’s how many callers turn into customers. For outbound selling companies, it’s how many prospects you successfully convert into clients.
For many companies, focusing on this one area of business could lead them to higher revenues and profits almost immediately.
Because they’re busy.
But that “busy-ness” is costing them.
If you take a company that generates 4000 leads per year, on average, and has a 25% conversion rate (25% is average for most companies), they will have 1000 new customers from those leads. If they average $400 per sale, that’s $400,000 in sales if customers buy from them once per year.
Now, if this company increases their conversion rate by just 10%, it would increase from 25% to 27.5% (not to 40% as 10% of 25 is 2.5). With this one very small change, the company will generate another $40,000 in sales. Substantial for such a small change.
So, if you plug your company’s number of leads, conversion rate, and average sale amounts in, how much more business could you be gaining from potential customers that you’re losing out on?
Side note: if you also increase your number of leads by 10% – for the above company that would be to 4400- and your average sale amount by 10%- $400 to $440- your revenue will grow by a whopping 33% and your profits increase by that amount also!
Where would you travel?
Take some time off?
This is exactly what I focus on as a Business Coach in Minneapolis. I offer small business coaching and help for owners who want to grow their revenues and profits and live better, more fun, less stressful lives.