In 2014 I got a call from a business owner whose revenue had been flat for a few years. During the Business Growth Consultation he told me that they spent a considerable sum of money each month buying leads, but that they only converted about 1% to 2% of those into clients.
A 2% conversion rate is pretty poor, but it also represented an excellent opportunity for that business owner, because if the conversion rate increased from 2% to 4%, turnover would double without investing any more in marketing!
Your Conversion Rate is the percentage of serious sales leads that you turn into customers.
Lead generation and conversion are like two peas in a pod, because if you succeed in generating enquiries but fail to convert a reasonable percentage of them into customers, then your marketing investment is being wasted.
There is no point in having a brilliant lead generation system if not enough of those leads go on to become customers. But whereas lead generation is potentially expensive, and difficult, sales conversion is normally the easiest way to achieve significant increases in sales revenue.
How? This table shows the impact of increasing conversion from 20% to 50%.
The main point here is that the business hasn’t increased the number of leads; no expensive advertising campaigns, or extra investment in marketing were required. You’re already attracting people who are interested in your product or service.
The task now is to figure out why people aren’t buying from you – at least in the numbers that you would like – and make the necessary changes to your sales and marketing processes. Here are four ways that you can improve your sales conversion process in order to get more customers.
1. Building Trust & Credibility
It may be that you aren’t doing enough to win the trust of your prospects. As a result, they’re not convinced when you tell them about all those amazing benefits that you came up with in the last module. You need to build trust with your audience, in honest and ethical ways, so that they are able to see how they will benefit from your product or service.
Here are some tools to enhance trust and credibility:
- Customer reviews, testimonials and case studies about satisfied clients
- Studies and reviews from independent bodies
- Compliance with certifications and standards
- Industry or other awards
2. Risk Reversal
Or perhaps the risks that your prospects take on in the transaction are just too high. Remember that they will be handing over scarce resources now – usually money, time or reputation – in return for benefits in the future.
Even if they trust and believe that you have helped other people or businesses, they may still worry that they won’t benefit in the same way.
You can reduce or eliminate these risks by offering free trials or samples of your product or service, by hosting demonstrations or sales meetings, by offering free after-sales support and of course, by giving a warranty or guarantee.
This means finding out whether your prospect is a likely candidate for becoming a customer. If you’re targeting the right prospects, they should hopefully be a suitable match for your business, in that your product or service provides the solution to their problem. But you want to find out whether they have an urgent need, and the money to buy. Qualification involves finding out as much as you can about the prospect’s individual circumstances, so that you can tailor your sales process to their needs.
4. Irresistible Offers
The basic idea here is to make your prospect an offer so good that they’d have to be mad to turn it down. You may sacrifice some revenue up front, but it’s cheaper to forgo that revenue now, in expectation of making future sales, rather than lose the money you invested in acquiring the lead in the first place.
This strategy requires you to have a well-developed sales funnel so that you can be reasonably certain that your new customer will come back again and again. You must also have follow up products and services to sell them.
5. Follow Up
Because your prospects aren’t always ready to buy when you are ready to sell, winning customers often requires some persistence. The challenge is to do this without being pushy or annoying. It’s also crucial that you automate the follow up process as much as you can, so that potential customers are not lost due to human error, forgetfulness or you being too busy.