To figure out your conversion rate you need two numbers.  You need to know how many total times you had the opportunity to make a conversion – e.g. website visitors, phone calls, or walk-in customers.  I’ll refer to this number as impressions for the sake of clarity.  You also need to know the number of successful conversions.

Note: Be sure to measure these over the same time period!

Then there’s a little math.  Don’t worry, I’m a professional.  Whip out your calculator and key in:

That will give you your conversion rate.  Bump the decimal place to the right two spaces and you’ll have it as a percentage.

Example: Your website got 328 visits and you made 16 sales.  16 divided by 328 equals 0.04878.  Bump the decimal over and you have a 4.878% conversion rate.

Okay, that’s the math.  What about getting those numbers?  Obviously, if you have an ecommerce site it’s pretty easy to figure out the number of visitors and the number of sales.  It’s a little trickier if customers visit your website, then call in an order or visit the store.

The answer here is training.  Train your staff to ask callers how they found you.  Train your clerks to ask while they ring someone up.  You can keep a clipboard by the register and the phone where your staff can mark down the answers.  Heck, you could even use a fancy spreadsheet.

Spend some time figuring out how to phrase your question.  Be specific.  You probably don’t want to ask your regulars “How did you hear about us?”  You’ll do better with “How did you find us today?”

If you’re tracking phone conversions be sure to tally how many total calls there were in addition to the number of sales made on the phone and how people found your number.

Another option is to get an 800 number that forwards to your main line.  Then put that number on your website instead of your regular number.  Now you can track the number of calls that came from your website.  Of course, that’s another monthly expense.

Now, on the web there are a lot of ways to track conversions.  For instance, you can define goals and funnels in Google Analytics or use Google Conversion Tracking. There are great click-tracking systems you can install like Crazy Egg or ClickTale. That’s a separate article though.

This post first appeared in my e-mail newsletter.

A conversion is when someone looking at your offerings decides to take the action you want them to take, i.e. making a purchase or providing you with their contact information.  On a website, the conversion rate is the percentage of visitors who make a purchase or give you their e-mail address.

When you know what your conversion rate is and what the average value of a conversion is, you can calculate return on investment, ROI, very accurately.  When you know your ROI you can make the most informed and profitable decisions about the allocation of your marketing budget.  The higher your conversion rate the greater your ROI.

Next month I’ll get into measuring conversion rates, and I’ll have a special offer for newsletter subscribers who want some help getting a system in place to provide these metrics.  Now, I want to tell you about how to increase that conversion rate.

The most effective, simple way of conversion optimization is to simply put yourself in the shoes of your customers, clients or donors.  Walk through the process you expect them to use when they do business with you.  This could mean walking into your store and trying to see it as a customer would.  If you do e-commerce then you need to go to your website, browse a bit and make a purchase.

Every business transaction follows this model: Visit, Obstacle, Goal.  You have visitors and you have a goal you want them to perform.  In between is what keeps them from converting, obstacles.

What obstacles do your put between your visitors and them taking your desired action?  Obviously, some obstacles can’t be removed, like having to reach for their wallet.  If they have to fill out a form on your website then too many fields to fill out can be an unnecessary obstacle.  Every click and every keystroke a visitor makes is an obstacle.  Try to make your website require as little clicking and typing as possible to carry out a transaction.

In a store there are many possible obstacles.  The organization of your products might create obstacles.  If people can’t find what they need quickly they’re less likely to follow through with a purchase.  Your employees might seem disinterested, unhelpful, or even rude.  Poor people create obstacles not just to making a purchase, but to feeling comfortable in a store.

Service providers often create a big obstacle with their price tag.  It’s a lot of money to agree to up front.  So, many of us change the goal.  Instead of going for the sale right off the bat we offer a free consultation or free estimate.  This gives us an opportunity to chip away at the price-tag-obstacle before the client has to face that decision.  Plus, a no-risk goal will always convert better than a goal with a price tag.

Improving your conversion rate is the the process of making it easier to do business with you.  There are more rigorous methods of going about it, such as split-testing, but I bet you can figure out some ways to improve just by putting yourself in your customers’ shoes.

Don’t miss the follow-up to this post, Conversion Tracking You Can Do Yourself, Cheap.

This post first appeared in my e-mail newsletter.

The sky's the limit when you expand toward the horizon.

There are two directions to grow your business, vertically and horizontally.  Vertical growth is selling more to your existing market and expanding your share of that market.  Horizontal growth is selling new products or services experiences to your existing market and adapting your offerings to fit new markets.  At least that’s the way I look at it.  An MBA would tell you that horizontal growth is all about acquiring companies in other sectors.  That’s not very useful to most small businesses.

When you start thinking about growing your business horizontally it’s really helpful to properly understand what it is you’re selling.  Don’t get me wrong.  I’m sure you have a masterful understanding of your products and the services you offer.  

That’s not what you’re selling though.  People don’t buy a drill because they want a drill.  They don’t buy cold medicine because they want cold medicine.  People buy drills because they want holes.  They buy cold medicine because they want to stop coughing and be able to breath clearly.

You’re not selling products and services.  You’re selling experiences.  If you happen to sell drills  you’re selling the experience of hole creation.  That experience has real value to a variety of markets.  Drills can be marketed to construction companies, whose work depends on making holes.  They can be marketed to the do-it-yourself enthusiast, who finds great value in the freedom to create holes.  As a final example, drills are valued by arts and crafts types because drills allow them to adapt and create new things that just needed a hole or two.

Each of these groups buys drills, but they respond to different packaging.  The foreman wants commercial grade reliability and power.  The do-it-yourselfer seeks economy and versatility.  The crafts person might desire the ability to make small holes in delicate materials.

OK, enough about drills.  What experience do you sell?

Restaurants sell a dining experience, where someone else does the cooking, cleaning and worrying.  Consultants sell learning experiences that result in some sort of improvement.  Cafes sell a variety of experiences without even thinking about it.  They sell a social experience, a morning caffeine experience, a warm studying experience and more.

So, how do you turn that into horizontal growth?  Package it.

A restaurant could offer a romantic dinner package, with champagne and a private candlelit table.  For lunch they could offer a business lunch package with two lunch dishes, two sides, and two drinks, plus you get to sit at a four-person table even though you only have two.

Give it some thought, and I bet you can think of a way to package what you already sell so that it appeals to a type of person that isn’t already shopping with you as much as you’d like.

Another opportunity for horizontal growth is selling something you already have, but don’t sell.  There may be a byproduct of your operation that has value to someone.  For example, when coffee is decaffeinated the extracted caffeine is sold to make caffeine pills.

More likely, you have knowledge that you aren’t leveraging.  If you own a plant shop then you should offer weekend gardening classes.  Once you have that down, why not write a book or make an instructional DVD?  It’s insanely easy to self-publish these days.

Whatever you end up discovering and packaging, you’ll need to market it.  Email marketing remains the most cost effective method of reaching out directly to people.  Direct mail still works, but can get very costly, especially if you want to purchase a mailing list based on demographics.  Direct mail is pretty affordable if you just do a standard postcard.  You can send a custom color postcard out to your customer base for about $0.50 per person.  E-mail is more like 2 or 3 cents per person.  Either way, when you launch a new package send out a limited-time discount or coupon to your list to get things rolling.

If you find a package that’s popular you can try repackaging it as a continuity program.  You know, a something-of-the-month club.  You could create a romantic dinner club, with easy monthly billing.  Something-of-the-month clubs have been around a long time.  The first that I know of is the Book Of The Month Club, which started in 1926.  Today, if you google “of the month club” you’ll get 10.2 million results.  Be sure to treat your customers fairly in your continuity programs.  Do that, and it shouldn’t be hard to at least break even, assuming you already have the ’something’ to sell each month.

This post first appeared in my monthly small business newsletter.

I have a question for you this month.

How many marketing messages (commercials, phone calls, junk mail, web ads, everything.) do you think the average American encounters every day? Seriously, stop reading for a second, and take a wild guess.  Once you have your guess, read on for the answer.

Marketing is everywhere.  Can you think of a single website that doesn’t have marketing in it?  They are few and far between.  You can’t drive down the street without seeing some marketing.  Check your mail or pick up the phone, and it’s there.

Our brains have learned that there are many many distractions in our lives that will lead us to parting with money or at least wasting time.  We’re used to it.  So we tune the vast majority of it out.  We are all skilled at ignoring the noise.

Ready for the answer?  First, let me guess what you guessed.  I bet you guessed somewhere between three hundred and a thousand.  The actual number is a bit hard to measure as you might imagine.  According to Bill Glazer (A very successful marketer for those who don’t know the name) the average American encounters 3,191 marketing messages and ads per day.  According to J. Walker Smith of Chapel Hill, NC based Yankelovich, in a 2005 USA Today article, the number is between 3,500 and 5,000.  Today, it’s likely even higher.

So, why did I spend all this time just to get to that number?  Because, I want you to understand just how vital it is for your marketing messages to break through the noise and get noticed.  Before long you’ll be competing with ten thousand other marketing efforts every day.  To really get that, it helps to think about the question before you learn the answer.

You have to stand out from the competition to take the lead.  That goes for websites and search engine marketing in addition to everything else.  When your website uses the same looks, lines and messages as your competitors you stay a part of the background noise.  When your page comes up in search results it has to grab the searcher’s attention to get clicked.  (Being the first result is a great way to get noticed!)  When your pay per click ad shows up it will be right next to other ads.  It has to stand out.

Get the point?

So, how do you stand out?  I say be creative, bold, and real.  Bill Glazer will tell you to be outrageous.  Don’t be afraid to do something different.  Make bold statements.  Never underestimate the importance of an eye-catching headline.  Whatever you do, be real.  We’ve all learned to expect phoniness and misleading statements from marketing.  Stand out by being yourself: honest and human.

One last tip.  Stop copying your competition’s marketing strategies.  The best that can come of that is that you’ll keep pace, a little behind the rest.  The worst case is when they’re copying you too.  You’ll end up with marketing about as effective as a photocopy of a photocopy is pretty.

As usual, if you’d like some help making your business stand out, get in touch with me.  You can hit that reply button right now and get your message straight into my primary in-box.

Know someone who might benefit from this message?  Forward it on!

To the Success of Small Businesses Everywhere,

Peter Grandstaff

PS: Hang Gliding is amazing!  I can’t recommend Kitty Hawk Kites strongly enough.  They also provide a nice example of standing out.  Once you pay for your lesson you get all of it, no matter what.  If you can’t make it, the wind won’t cooperate, or you just chicken out they will give you a ‘wind-check’ to come back and get whatever you missed at no additional charge.  Wind-checks never expire, and they are transferable!  Have you ever heard of such a thing!?

This month, I have some tips for marketing to the local student population and a little news about Google.  First, a quick update: Canine College is continuing to fill it’s board and train program.  If you missed last month’s story about their SEO and Pay-Per-Click campaigns, you can read it on my blog.  I’ll try to tone down the internet marketing and talk about strategies you can put to work today.

School is winding back up, and the local economy is breathing a collective sigh of relief.  Around here many markets are kept above water by the steady influx of cash brought in by all the students.  Just counting the three largest universities here in the Triangle, there are suddenly 70,757 students around.  Hopefully, we’ve seen the worst of this recession, and we’ll see the horizon by the new year.

What can you do right now to help your cash flow?  Promote.

Attract that student crowd with student discounts, free wi-fi, eco-friendliness, and, of course, sex.  (Go turn on MTV for 30 seconds if you’re scoffing at that last one.)

Get the message out with Twitter, Facebook, and e-mail.  You are e-mailing your customer base aren’t you?

Keep new promotions rolling.  Keep yourself relevant and fresh.  If you haven’t already, go sit down and map out a calendar of promotions to cover from now through New Year’s.  Each one doesn’t have to be the most clever thing you’ve ever done.  Just try to map it all out, and worry about fine tuning later.

Okay, back to attraction.

Student discounts appeal to all students.  You don’t even have to give much away.  The psychological impact of the simple fact that you have a special just for them is tremendous.   They will automatically identify with it, and feel welcomed.  It doesn’t have to be a flat student discount, just do something special that requires a student ID.

Free wi-fi will bring you students.  It will also bring you low spenders who hang around for a long time.  You’ll have to figure out if it works for you.  Simply having it available, even for a price, can be a valuable selling proposition.  Maybe make it free to students only.

Eco-friendliness just makes sense.  Go green and don’t look back.  Just make sure your customers know what you’re doing to help!  You can even figure out a way to get them involved in your eco-efforts.  They’ll engage, and you’ll build lasting relationships with your customers.

Sex sells.  I’m not inclined to elaborate much on that one here.  If you’re really interested, check out this conference.  One of the speakers will be the Senior Marketing Manager for Men’s Care at Unilever, makers of Axe body spray.

It’s not enough to just make the promotion though.  You have to get the word out too.  Don’t forget that the college crowd is very internet oriented. Facebook, Youtube, Twitter and blogs are all great places to reach this audience.  So is the college newspaper and its website.

The social web is where the college demographic congregates now.  The worldwide majority of Facebook users are in the 18 to 25 age range.  Oddly enough, the 18 to 24 age group is less likely to visit Twitter than the 55+ age brackets!

And now, News of Google.

The search giant has announced a revised algorithm — that’s a series of rules and steps to carry out a function, in this case the indexing the the Web for its search results.  They have codenamed it Caffeine, and you can preview it now.  Initial tests seem to show that it returns many more results than the old algorithm in half the time.

It’s also supposed to be better with relevancy, but that’s more subjective. Personally, I’d say they did great with it.  My sites rank even better.  Canine College even makes it onto the first page for the search [dog training raleigh]!

Well, get the fall started right and I hope you have a great September.  The Better Half and I are planning a trip to the Outer Banks to do some hang gliding.  Hopefully I’ll have pictures in next month’s issue!

www.PeterGrandstaff.com – SEO Web Marketing & Design