Increasing sales conversion rates offers a greater ROI than what you can get from optimizing your traffic; either from paid or earned media. The math is simple – even if many never do the calculations. Companies with higher conversion rates almost always have better marketing efficiency ratios (net contribution/marketing expenses). The upside is that these companies make more money and that’s a good thing. The downside is that it’s hard work to accomplish better marketing efficiency ratios. These companies are led differently; they have higher levels of collaboration and higher standards of accountability.
The top performing companies consistently convert visitors to sales at rates in the double digits. They’ve been doing that for years, while the vast majority converts at low single-digit rates. The gap between the top performers and the middle of the pack continues to grow. I have two questions for their CEOs:
1a. If you sell online, do you convert at least 10 percent of your visitors to sales?
1b. If your online efforts are geared toward lead generation, do you convert at least 20 percent of your visitors to leads?
2. So do you know exactly why your company doesn’t convert better?
It can’t be that the company’s already making so much money that it doesn’t matter. It can’t be that the company doesn’t care enough about their potential customers to make sure they get exactly what they were looking for when they visit. It can’t be that someone in the company is already “responsible” for conversions so you stopped worrying about it.
If, as CEO, you had a sales force that was underperforming the market leaders by a factor of 500-1000 percent, you couldn’t just point to the VP of sales. As the CEO, you would also be accountable. Of course, this assumes that you have the equivalent of a VP of sales responsible for the marketing efficiency ratio. In my last column, “Leadership for the Marketing Optimization Team,” I explained what kind of people companies need and what kind of backgrounds they should have.
What follows are the more likely reasons that companies underperform online. Perhaps the CEO still doesn’t know what factors of the customer experience impact sales. Perhaps the CEO still doesn’t know what projects or what departments to favor. Perhaps the CEO still simply doesn’t know what truly needs to be done to optimize the marketing efficiency ratio.
I’m disappointed. I feel somewhat responsible after evangelizing about accountable marketing for more than a decade. I suspect if these companies’ shareholders knew just how much money was being left on the table they would be too. Ignorance is not an excuse and in business it isn’t bliss.
Nobody has been involved in e-business for two decades. There are too many not-quite experts, over-promising tool vendors, and self-proclaimed pundits demanding attention. It’s the responsibility of executive management to create an expansive environment where learning in ongoing silos is less important than customers, and optimization isn’t a project but rather a habit of great execution.
Stop paying attention to what your peers are doing (so-called best practices) and start benchmarking against your customers’ expectations. Can you meet or exceed those expectations? Your conversion rate will be a leading indicator. Conversion rates are a measure of your ability to persuade visitors to take the action you want them to take. They’re also a reflection of your effectiveness at satisfying customers, because for you to achieve your goals, visitors must first achieve theirs.
Columnists receive a lot of feedback. As a reader of this column, you’re likely part of the choir I’ve been preaching to for years. I hope you enjoy the column and find it useful. If you agree or disagree with this column, then please direct your comments not only to me, but also to the CEO.
What’s behind a successful data-driven marketing strategy?
One of the major challenges in the martech industry is getting the attention of prospects in a world where they are bombarded by content and emails on all sides.
Facebook is addressing one of the biggest missing pieces of its chatbot offering: analytics.
Are you starting a new online business? It’s always overwhelming! Here’s your ultimate resource list to help. Maybe you have had an ... read more