When sales are down or you need more customers, do you automatically look for ways to generate leads? A lot of owners do because they believe their sales conversion rates are better than they actually are.
Sales conversion rate is simply how many leads you or your sales people convert to paying customers. Think of it as an efficiency measure for sales. What is your sales conversion rate? If you do not know (and I mean really know), then start to track it. Why? Because it’s one of the untapped, low-cost profit opportunities in many small businesses.
When I ask business owners about their sales conversion rates, most estimate this to be 75% or higher. Once we start tracking it, they are surprised to learn how low it is – sometimes 40-50% lower than they estimated. What an opportunity – because now you can you do things to improve it.
7 Ways To Improve Your Sales Conversion Rates
- Clearly define your ideal customer(s) and understand what is important to them. Without clear targets, every lead looks like a great opportunity. You then end up investing a lot of time and money trying to sell to people who don’t need or want what you have to offer. Use your resources elsewhere.
- Recognize your company’s strengths and weaknesses. Be honest with yourself. What do you do well (from the customer’s point of view) and profitably? If you are not sure, ask your ideal customers. Then focus on prospects that NEED what you do well and be willing to let go of the others.
- Differentiate yourself with a guarantee. If you consistently deliver a critical benefit for your target customers, a guarantee is a great way to improve sales conversion because it reduces the buyer’s perceived risk. The key to an effective guarantee — make sure your delivery is consistent and make sure it is relevant or important to your target market. One additional point — a guarantee that has no consequence if you fail to do what you promise, has little or no value. Here’s an example to demonstrate what I mean: Our technician will arrive within 30 minutes of your scheduled appointment (benefit) or we will credit you $50 on the service call (consequence).
- Create a sales management system — a consistent approach you use for every lead. Know the key touches and steps and where prospects are in your sales process. Don’t let a lack of follow-up or an inconsistent process blow your sales opportunities.
- Know why customers buy. What benefits do customers get when purchasing your products or services. Make sure your sales messages and discussions communicate this. Remember, prospects may ask about features , but they buy benefits.
- Set sales and milestone goals and track them. Key events in the sales cycle, such as face-to-face meetings or requests for proposals, are indicators of progress. Tracking tells you where prospects fall off so you can improve your sales system. Remember, what you measure, you can manage and improve.
- Stay connected. A ‘no’ today doesn’t mean forever. A good process, to nurture prospects and keep them in the sales funnel, will pay off down the road. You will simply convert them later!
As you plan your success and set your goals, look beyond lead generation and include strategies to improve your sales conversion rates.
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