How do we work out conversion rate?



Do you know your sales conversion rate? What would happen to your profit if you increase your conversion rate by 10%? 

The third way to grow your business is to increase your conversion rate.

What you can measure you can manage.

How do we work out conversion rate? Start by working out your current sales conversion rate for the past quarter by dividing the number of quotes converted into sales by the number of quotes prepared. For example, if you sent out 156 quotes over the past three months and 85 of them were successfully converted to sales, your conversion rate for that quarter is 54% (85 / 156 = 54%).

When you know your current conversion rate, you're immediately drawn to the revenue your business is missing out on by NOT achieving a higher success rate. In the above example, if that business increases its conversion rate by 10% (from 54% to 64%), and if the average sale is $6,500, that's additional sales of $405,600 over one year!!

In other words, it may be well worth the time, effort and financial investment on improving your systems and training your sales team to achieve a lift in your conversion rate.

There are many ways to increase your sales conversion rate. 

1. Your sales system.

You need to document your sales process, step by step. Who does what and when? Include your sales meetings, quoting and proposal processes. For example, how quickly should a prospect receive their proposal after you've gained conceptual agreement? What is the follow up process if a prospect doesn't respond to the proposal? 

The more comprehensive your sales process, the better your conversion outcomes will be.

2. Your sales team.

Train your team on how to sell more effectively and ensure they're following your sales system.

3. Follow up, follow up, follow up!

You'll get better sales outcomes just by following up all of your sales meetings, proposals, or quotes. If prospects don't respond to your follow up call, keep going until you get an official no.
Did you know most business is won on the fifth and subsequent contact with prospects?

4. Offer a product or service guarantee.

This might sound scary at first, however it's the easiest way to encourage your prospective customer taking that step and doing business with you. It's also a powerful way of demonstrating your absolute commitment to quality.
Only guarantee what you can manage.

5. Proposals with options.

Presenting a proposal where your prospects can choose one of three service options increases your chances of having at least one of those options accepted. This sales technique is often referred to as 'the choice of yeses'. Make sure you keep it simple and limit the options to three or four, or your prospective customer will be overwhelmed by too much choices.

If you’d like more information, don’t miss out our next education workshop, 7 Ways to Grow Your Business. You will identify potential areas for profit improvement, learn vital business growth strategies and understand how you can easily apply them to your business.

Tickets for this high value workshop are selling fast, so register now to avoid disappointment. 

"Repeat business or behaviour can be bribed. Loyalty has to be earned." - Janet Robinson


  

Target Accounting Service