Last evening my daughter’s softball team unknowingly reinforced a valuable lesson I teach business owners. The Cyclones could have beaten the #1 ranked Blue Raiders were it not for one inning when the Cyclones failed to convert a couple simple plays into easy outs. As a result, the Blue Raiders scored three unearned runs that made the difference in the game. Having watched the Cyclones as often as I have, there’s no question the girls knew what they needed to do defensively, they just failed to execute.
Is your business executing as you desire / expect? Is your team executing flawlessly in helping you build your business? Have you provided them the tools and training necessary for them to conduct errorless performance? In working with small business owners I find that they often haven’t taken the steps necessary to ensure that their team performs as expected. It’s as though they relinquish responsibility for establishing processes to a team that they often haven’t trained. These owners aren’t helping their employees perform errorlessly and their competitors may be the beneficiaries.
Conversion Rate: One area where we find owners poorly equipping their employees is in helping them convert leads, defined as prospective clients who have expressed an interest in your business, into paying clients. What are you doing to help your team increase their conversion rate? Failure to measure their conversion rate is common amongst small business owners and results in a false sense of what is needed to gain more clients – spend more money on advertising.
I want to briefly focus on the importance of measuring your conversion rate and, once known, taking steps to increase that rate and thereby help your employees do their jobs better. Increasing your conversion rate by 50% will have as big an impact on your net profit as will increasing the number of leads through advertising by 50%…and it won’t cost you any money. For example:
|Number of Leads||200||400||200|
Strategies to increase conversion your rate: In working with business owners I have found that just measuring the percent of leads into paying clients increases their conversion rate. Often the actual rate surprises owners who have an inflated idea of their rate. So, begin measuring immediately.
Unique Selling Proposition (USP): A second strategy that I teach clients is the importance of clearly differentiating their business from competitors. To be effective these differentiators must be valued by buyers and ideally must help them overcome a frustration they have with your industry. Failure to clearly differentiate your business results in competing on price, where there aren’t winners except those who have built their business to be the low cost provider.
Scripts: Rehearsing and documenting responses to inquiries from prospective clients is another essential strategy to develop for your employees. Why leave how your business responds to questions from leads to the momentary whims of your staff? Ideally every interaction with prospective clients should be thought out and scripted, not memorized but as guidelines for your staff. Staff must personalize and rehearse the script so that it comes across as being natural.
Conclusion: Preparing, practicing, and executing are just as important in growing your business as they are to the Cyclones in winning their softball games. Failure to equip your “team” with needed strategies, material and training will without doubt lead to your competition recording lots of unearned runs at your expense.
I have provided a brief glimpse into the importance of your sales conversion rate. I encourage you to spend much time thinking through how you can equip your staff to increase the effectiveness of your business’ conversion rate. Don’t spend money advertising until you have attained a desirable conversion rate…you’ll be wasting your advertising dollars.