In my previous post, I revealed there are 7 numbers you need to measure, track and manage in your business if you really want to grow it. These are the 7 Keys to Dramatic Business Growth.
I urged you to start tracking the number of enquiries you receive in your business, so that you can manage the number of enquiries you get (which could mean managing them up, down, staying the same, or getting enquiries of a different quality – which do you need?).
Increasing the number of enquiries you receive in your business is the first way you can increase your profits (assuming they are the right enquiries for your business). This is one fo the 7 ‘Keys’ or ’profit multipliers’ in your business.
There are 6 others profit multipliers in your business. That means 6 other numbers you need to measure, track and manage if you want to grow your business.
Today I want to talk to you about profit multiplier no.2 – your conversion rate.
For every 10 enquiries you get, how many become new clients or customers? Whatever that number is, that’s your current conversion rate.
If you don’t know what you conversion rate is, you need to start measuring it now. Look at the number of enquiries you received last year and the number of new customers or clients you got. That will tell you your conversion rate. It’s best if you convert it to a percentage, so if you had 100 leads and 30 new clients, that’s 30%.
Now take a look at what you conversion rate has been so far this year. What’s the trend – up or down or level? What were you expecting?
If you aren’t converting as many enquiries to customer or clients as you’d like, isn’t it time to do something about that? Look at what you are currently doing to move someone from being an enquiry to becoming a customer or client. What’s your system? Where are the holes in that system? (The holes are where enquiries ‘drop out’ or ‘fall through the cracks’.)
What can you do the plug the holes? What would be the effect of plugging 50% of the holes you currently have and converting 50% more of your enquiries into clients or customers? I encourage you to do the sums right now and see for yourself.
Once you know what the effect would be, you’ll know what it’s costing you to not do anything about this. Then you have a choice about what to do next and you know the financial consequences of that choice.
Whilst most business owners are chasing after more enquiries, most of them would do better to focus on fixing the holes in their conversion process – what’s the point of pouring more water into the bucket if it’s full of holes? You might call than insanity – but at best it’s a waste of your time, effort and marketing budget.
If you need some tips and strategies for improving conversion rates in your business, read my 3 top tips.