Understanding Sales and Tracking-Continued-Part II
In the last post, four important metrics were discussed for you to track in order to make good decisions about your marketing systems. The first most important metric, you probably already have a handle on: the exact dollar amount of what you are spending on marketing and promotions.
There were then three other important metrics that were discussed: first, the number of prospects that your promotional efforts are giving you; second, the percentage of those prospects that turn into paying customers and lastly the average dollar amount spent on with you by each customer. If these numbers are being tracked with accuracy you’ll be able to test your marketing and make appropriate changes when necessary.
These metrics will give you an idea of where you can focus in your marketing efforts. Will you focus your attention on improving the number of prospects that you get? That is the path of most businesses, and it is the most expensive and inefficient way to address any problems you might be having.
Will you focus your attention on your closing or conversion rate? This will probably have the biggest impact on increasing your profits from your promotional efforts. Will you focus your attention on increasing the average value that every customer spends with you? Although the impact may not be as large as it would be with a focus on the conversion rate, you’ll find that action on this metric will increase your profits.
When you choose to focus on your conversion rate whether from visitors to your website or walk-ins to your physical location you’re getting into the details of exactly how effectively products and services are sold by your company. It’s necessary here to address conversion with respect to a website and/or the physical location separately.
When you’re discussing the conversion rate on your website, many volumes could be written on the number of things that you can do in order to improve it. Although you probably know your business very well, it’s possible that the number of variables that affect your conversion rate could still be quite overwhelming.
The problem could be as simple as the placement of text and graphics on a certain page, or how fast your page loads or even how it appears to those visitors using a mobile device. In other words, if your website conversion rate is lower than you would like it to be, the best possible course of action is to get professional help to determine why it’s happening.
When you’re discussing the conversion rate from the sales occurring at your physical location it’s likely to be an employee issue. Conversions can typically be improved by observing of how a sale is made and outlining what you can do to help your employees improve. In addition to this, you may need to implement an incentive for your employees to go the extra mile to generate more sales.
Attending to this will make all of your business traffic more efficient. When additional traffic meets increasing conversions, you’re getting more for each promotional dollar that you spend. That’s why increasing the conversion rate should be a top priority for you in building your marketing system.