Many people have probably heard or met on the Internet such terms as CTR (from the English “click-through rate” - “click-through rate”) or Closing Rate. All these concepts are united by one common term - sales conversion.
Conversion - what is it
Essentially, conversion is the “transformation” of a potential buyer into a real one. Conversion helps to assess the effectiveness of the entire business, to understand how you can increase the number of sales. How to calculate sales conversion in store?
It is worth remembering that even with the same conversion rates, profits depend on the number of potential buyers. For example, with a 6% conversion and 100 potential customers, the profit margin is 6 rubles. But if the number of potential buyers has grown to 1000, the profit will be 60 rubles (with the same conversion of 6%).
How conversion is calculated
A special sales conversion formula has been developed for the calculation, which is very easy to remember. She looks like nextway.
(Number of Buyers / Number of Visitors) x 100%=Conversion
That is, this is the ratio of the number of buyers to the number of ordinary visitors, multiplied by 100 percent.
To understand how high the efficiency of a business, conversion rates must be close to certain norms. Much depends on the specifics of the trade. For example, for clothing stores or other non-food items, conversion rates of 30% are very good. But for grocery outlets, the figure often reaches 75-80%. In niche trading where the assortment is not too wide, sales conversion is often at the level of 10-15%.
When measuring conversion, you should definitely consider traffic. If a non-target audience comes to the site or store, this significantly reduces the conversion.
Example of conversion calculation in store
Let's take a closer look at what a sales conversion is. Let's say we own a small store that sells luxury watches. In order to increase sales, we have developed an online store with an attractive design, user-friendly interface and unique descriptions of expensive brands. To place an order, you must select the product you like, click the "Buy" button and provide data for delivery. There is an option to pay directly on the site or in cash after delivery.
So the purpose of the site is to get the user to fill out the order form. After completing all the indicated actions, with the buyerthe manager is contacted to confirm and discuss the details of the application.
Every day over 600 people visit our site. Of all these people, only 6 people click the "Buy" button and go through all the stages of ordering. It turns out that 6 users who left their data - 1% of all site visitors. Therefore, the sales conversion of our web resource will be 1%. Whether it's a lot or a little, it's hard to say. It all depends on the chosen topic and the level of competition in it. What is the conversion in sales have been decided, now we will find out how to increase the conversion.
Increase sales conversion
When managers are faced with the question of increasing conversion, the very first thought is to attract more visitors to the outlet or to the site. For example, to make attendance grow from 600 people a day to 2000, or even more. The theory of large numbers undoubtedly works, but there is a more effective option.
It is necessary to gradually, day by day, analyze the work of the company, the needs of its customers and, based on this analysis, improve the service, improve and develop the site. Thus, we will get more return from existing customers. And the new ones just won't want to leave us.
Only constant work on the project helps to increase profits. And the marketing strategy chosen by the company plays a significant role in this work.
Marketing strategy
We figured out what a sales conversion is. Now consider such a thing as a marketing strategy -component of the overall strategy of the organization. This is a specific set of company actions that takes into account the market situation, determines marketing channels to achieve a quality result
The execution plan is of the utmost importance to any marketing strategy. In addition, it is necessary to regularly analyze the current needs of the market. This will help create products that are in demand by certain consumer groups.
Planning a marketing strategy has three phases:
- Analyzing the situation, or conducting a full audit of the company's current position, environment, and likely future.
- Working out goals and ways to achieve them.
- Selection of tools with which you can most effectively follow the chosen strategy.
In the economy, there are special matrices for determining marketing strategies. They bring specificity to strategic decisions.
One of the most famous is Matrix Boston-Consulting Group. Its other name is “Market share – market growth”. In the late 60s, this matrix was developed and put into practice by the Boston Consulting Group. According to it, any firm is described as a total set of strategic production units through portfolio analysis. This model allows you to structure all the problems in the strategy of the enterprise. It is characterized by comparative simplicity, but the main disadvantage is the lack of accurate assessments of products in the middle position, which are the majority in any company.
There is also a Matrixcompetition, invented by the US scientist M. Porter. The essence of his concept is that in order to obtain high profit margins, a firm must have a strong position in relation to competitors in its field.
Of all the variety of marketing strategies, the following should be noted:
- Strategy for innovation, introduction of new products and technologies.
- Diversification, that is, the withdrawal of products that have no connection with the main field of activity of the company.
- Internationalization - systematic entry into foreign markets.
- Segmentation, or in other words, the development of a strategy for individual consumer groups (segments).
There are other types of marketing strategies. Very often, enterprises mix elements of different strategies, implement their own unique concept.
Marketing strategy (example)
Let's say our luxury watch store isn't making enough money. The number of visitors to our online store website is growing, but the conversion rate remains at the same level. Acting according to the plan, we analyze the current situation and identify our weaknesses. At this stage, it is necessary to determine the portrait of the target consumer. Do not forget to study the offers of competitors in our field.
The analysis revealed that the following factors have a negative impact:
- complex site functionality;
- insufficient technical description of goods;
- the range is limited only to expensive modelshours.
Based on the data from the analytics counters, we notice that a large number of middle-class people come to the site, whose income level does not reach our target consumer.
Based on the collected data, we decide to follow an innovative strategy. We are expanding the assortment with new categories of goods that are not inferior in quality to our main products, but at a reduced price.
We are planning a number of measures to redesign and saturate product cards with new useful information. We control the implementation of the strategy at all major stages.
This could be a marketing strategy. The example shows the ability to think ahead in business steps and get more profit as a result.
Why you should contact an agency
Now it has become very popular to contact an Internet marketing agency. Such complex procedures as conversion calculation, market analysis, search for weaknesses, development of a marketing strategy and a plan for its implementation are decided by a specialist with a special education. Such an employee should have a clear understanding of all terms and indicators. It is desirable that he has real experience working on projects in a similar business area.
If you cannot find such an employee in the state, the right decision would be to contact a marketing agency. Since most of the advertising has now migrated to the Internet, and no serious firm can do without a corporate website, more and more agencies specializing in Internet marketing appear.
As a rule, such organizationsprovide comprehensive services to promote your brand. In addition to developing a marketing strategy, the agency will set up contextual and banner advertising for you, select web sites for placing a commercial offer. The Internet marketing agency is also engaged in search promotion, creation and content of sites.
The choice of a contractor should be approached with all responsibility. After all, the success of your company and the performance of its main functions - meeting consumer demand and increasing profits - will largely depend on it.
Now it's clear what sales conversion and marketing strategy is.
