Let’s say you are a fisherman, and you’ve been given a tip-off on a fishing hot-spot. You’ve been going there for a year and know for a fact that other fisherman have had great success there – but you have only ever caught 5 fish..over the course of the year. Would you just keep on doing the same thing and hope for a better result? Or would you stop and think about the number of fish you have caught over the course of the year and question how you can improve your chances of catching more fish?
Conversion Rates. They are an extremely important figure to know, and an easy number to calculate, yet not many business owners know theirs.
If you don’t know what your conversion rate is, now is the perfect time to work it out and/or put the right procedures in place to be able to calculate it.
A conversion rate is generally calculated by dividing the number of sales leads by the number of successful conversions.
Why is a conversion rate so important?
- It will help you set your marketing goals. Knowing your conversion rate will help you identify how many leads you need to generate in order to recover your marketing costs.
- It will help you forecast your marketing spend. Your conversion rate will help you identify the amount of money you are willing to budget for marketing, based on your estimated return.
- It will help you identify where you need to focus your attention; sales or marketing? If your conversion rate is good – pump up your marketing activities to get more leads. If your conversion rate is low – finetune your sales process before investing in marketing activities to ensure you achieve the highest number of sales from the leads your marketing generates.
Conversion Rates are just one of the many elements we analyse when developing a marketing strategy for our clients. For more information, check out our Strategic Marketing Packages.