What's on Your Business Growth Menu?(How to focus on the right things and get results)
Getting lost in the weeds can happen when running your business. Without a clear list of priorities it’s like going shopping for the week without preparing your menu first. You end up having to run back and forth to the store to get this or that ingredient because you didn’t spend the time up front to plan your meals and supplies for the week.
When you start thinking about what you need to focus on for your business, just like preparing for the weekly grocery shopping, it helps to prepare a menu first. And when you prepare the menu you will be thinking about breakfasts, lunches and dinner won’t you. Instead of meals, when planning in our businesses we need to think about sales conversions, traffic and leverage. We’ll introduce each of these elements in this article starting with sales conversions.
Sales conversions are like the batting average for a baseball player
A good baseball player will have a batting average over 0.3. That means for every 10 “at bats” the player hits the ball 3 times (this is actually quite good in baseball). In the same way when you get in front of a customer you are having an “at bat”. If you get the desired result from your interaction this is called a sales conversion. Dividing the number of conversions by the number of attempts you can measure your conversion rate. Take a landing page on your website for a product offer for example. If you can measure the number of visitors you get to that page and the number who click and take the desired action you can calculate your conversion rate for that action. But why is measuring sales conversion rate so important?
Measuring conversion rates is a good health check for your business
When you measure your conversion rates you get valuable information on how you might improve, and make more sales. For example, you’ve seen those empty looking stores in very busy shopping centres haven’t you? Even though many people are walking by, very few are walking in. Maybe the shop window display is unappealing to passers by. Maybe you are getting plenty of people browsing through the store but still making few sales. The reason might be your product displays are disorganised or it could be the products themselves are not of much interest to your shoppers. The point is that once you are measuring sales conversions you can start understanding where you need to focus on to improve. And before you set up your store in a very expensive shopping mall you do your research first don’t you? You’re planning to make an offer that you think will be popular and sell aren’t you?
Retailers need to think about what shoppers want first
Yet, some business owners still make the mistake of rushing in and opening a store in a busy mall thinking that the sales will take care of themselves. These businesses don’t last very long because they haven’t thought about their offer enough. You don’t want to find yourself in a busy mall with an empty store do you? It’s the same situation online. So you need to measure and consider your sales conversion rate on your product offerings and think about how you will improve it. Now that you have sales conversions on your menu you can think about traffic and the yellow pages.
Where is your yellow pages book?
The yellow pages book was once the primary way businesses would find customers. They would pay for an expensive and attractive full page advertisement for the yellow pages. Business owners did this because the yellow pages was ‘the way’ to reach customers. Placing a full or half page ad in the yellow pages was a way to get the phone ringing. Those days are well and truly over now with the internet. Everyone is carrying a smartphone around with them now and this is how they find businesses and products. Most people think about Google when searching for businesses or products online don’t they but there are many others like Amazon, Etsy, Facebook marketplace and many others. Having a way to get in front of your customers online is now just as important as being in the yellow pages or once was. One of the problems with this new distribution system is the abundance of choice for getting attention for your offers.
The internet is a lot more complicated than a single yellow book
Spoilt for choice, people tend to gravitate to a preferred method for finding what they are looking for. The reality is that you have to find out where your customers and consider that as a place to advertise or be present. There are two types of traffic, or page visitors, online. These are paid advertising and organic traffic. Both might be important and it will depend on your specific industry, your business and your customers. Getting online traffic is familiar to most businesses. The majority of businesses are still focusing on getting paid traffic with something call Google pay-per-click. No doubt you know a little about this already. What many haven’t realised though is the importance of sales conversions. The reason for this has to do with the cost of acquiring a new customer.
Why is traffic becoming so expensive?
Pay-per-click advertising was a boom for businesses when Google first got into this game. Businesses enjoyed increased traffic to their websites and more phone calls by simply paying to show in Google search results for specific keywords. But more and more businesses are now advertising with Google and so, of course, the cost of this advertising is going up and up. It’s getting very expensive just to have your ad clicked on in the search results. Because of this expense it is important that you send prospects to a page with a high conversion rate. If you don’t then you are going to be spending a lot of money on paid traffic for mostly unsatisfying results. Unfortunately most businesses are just sending paid traffic to their website homepage with no offer or strong calls to action. This is like the stores that open in a shopping mall thinking they’ll succeed just because they are getting exposure and footfall. But you need both, traffic and sales conversion to succeed in business. Now our business menu’s almost complete, we just need one more thing and that’s leverage.
Leverage is about doing more with what you already have
Is your product a replenish-able? If so then selling to your existing customer base is leverage. If you have a customer emailing list this can be leverage as well. Leverage is important because you can reduce your average cost of sales and customer acquisition cost. When you sell more product to people who already know, like and trust your brand it costs less for each of these sales. One way you can start leveraging your existing customer based is to ask what is the next logical step for your customers? Once they have purchased their first product what will they be wanting to do next? For example, when you shop for a pair of pants, you might be receptive to buying a new belt, matching shirt, socks, shoes and other accessories to go with it. Once you have acquired a new customer using expensive paid traffic from Google pay-per-click advertising it makes sense to stay in touch doesn’t it?
How to leverage something as simple as a click to your website?
Most businesses know they can send traffic to their website using paid traffic. Let’s say someone is in the shopping mall and searches for a wedding photographer on Google using their smartphone. They might click on your ad in the search results and have a look at your website. Most of the time businesses just send send this traffic to a homepage and the visitor takes a quick look and then leaves never to return don’t they. But if you have thought about your sales conversions before sending that traffic you’ll have a clear call to action or offer on this page won’t you? But what if they still bounce away from your website?
Are they lost forever?
When someone leaves your website your chances of them coming back start to fade rapidly. How can you prevent this? One way to get back in front of them is with a retargeting ad on Facebook. Have you noticed how sometimes after you visit a website like our wedding photographer example you then start to see advertisements for that same business on Facebook? It’s not a coincidence. This business is using what is called a Facebook pixel on their website. This method can be very effective for staying in front of people who have already indicated an interest in you business by clicking on your Google ad. It’s more likely someone who is familiar with your business and brand to be receptive to you offers. Retargeting ads to people who have already visited your website is one way to increase the impact of this traffic.
Amplifying what you are already doing
Most businesses can increase sales without needing to find brand new customers. Our example of the wedding photographer combined all three items on our menu list didn’t it? Starting from building a landing page with a good chance of converting visitors, sending traffic to this offer and leveraging this traffic by building a retargeting list for future advertising on Facebook. The wedding photographer can be ahead of her competition when she is thinking about all three elements, rather than just traffic like most of her competition. This brings us to the end of the first part of this 4 part series. We’ve touched on the three meals we need to be thinking of on our business menu. Now that you know what needs to be on your menu you can start building your shopping list.
But what about the main ingredients?
We haven’t explained how you can improve sales conversion, traffic or leverage have we? We need something like a shopping list don’t we? For example, what are the key elements to consider and how can you improve conversions, traffic and leverage? We need to decide on some good recipes for our business menu. Then once we have completed our menu for the week we’ll look up the ingredients for each meal. Then we’ll check what we already have in the fridge and pantry and finally make a list of what we need to buy from the shop. But first we need to talk about choosing the specific recipes.
Rather than reinvent the wheel the are already plenty of recipes and cookbooks available to choose from to help us. In the next article we’ll look at some of our favourite recipes for constructing website landing pages or product offers to improve sales conversions.