Q. How can knowing my Conversion Rates make me more money? I've read on your site that I should know my Conversion Rates. I'm not sure what you mean. Can you explain and tell me how those numbers can help me make more money? 
A. Marketing expert, Joe Gracia, responds: We sure can! Glad you asked. It's essential to your success to know your conversion rates. Your conversion rates refer to your level of success in moving people in your marketing process from one level to the next level. For instance, your first step in your marketing process should be to attract interested prospects to your business. CONVERSION OF STRANGERS INTO PROSPECTS If you choose to attract prospects by sending out a direct mail letter to 1000 Strangers, and you get 10 Prospects responding to that mailing, then your conversion rate of Strangers into Prospects would be 1%. You simply divide your results by the number you contacted. 10 Responding Prospects divided by 1000 Strangers mailed to, equals 1%. That, by the way, is the standard conversion rate for direct mail. That rate tells you that in order to get one new Prospect you would have to mail to 100 Strangers. If you can improve your offer in your letter, or if you can improve your list of strangers to more closely match your prospects' profile, then you may be able to increase your conversion rate of Strangers into Prospects. Just knowing that a 1% conversion is normal will do a lot to ease your concerns while marketing. Entrepreneurs who are not familiar with conversion rates almost always have unrealistic expectations when it comes to marketing results. They may be hoping for 50 responses from 100 letters -- a 50% conversion -- and they would be sadly disappointed, since that is a near impossibility. They would actually be succeeding by getting 1 response, but they would incorrectly believe that they had failed, and give up. Knowing your Conversion Rates will also help you to make intelligent choices when it comes to investing your time and money into various marketing vehicles. Are you getting a good conversion rate from your direct mail letters, or newspaper ads, or e-mail letters, etc.? If not, can you learn how to improve your results? Of course you can! That's the whole point of this newsletter, our Web site and our Give to Get Marketing Solution. The more you improve your Conversion Rates from each of your marketing vehicles, the more money you will make. CONVERSION OF PROSPECTS INTO FIRST-TIME BUYERS Your next step in your marketing process would be to follow up with your Prospects to turn them into First-Time Buyers. If you have a list of 100 Prospects and you follow up with them by giving them a special offer on your product or service and 10 of those Prospects respond to your offer, that would be a 10% Conversion Rate of Prospects into First-Time Buyers. That would be an excellent Conversion Rate, but with a little extra effort it could be increased even more. But you can't improve something unless you know what it is now. That's why it's so important for you to know what your Conversion Rates are. CONVERSION OF FIRST-TIME BUYERS INTO REPEAT CUSTOMERS Just because someone has purchased from you once, doesn't necessarily mean that they will buy from you again. If they weren't happy with their experience, then there is a good chance that they won't buy again. By know what your Conversion Rate of First-Time Buyers into Repeat Customers is, you will have a very good idea of how well you are doing in generating happy customers who will return again and again. If you have a solid back-end marketing system in place to sell your First-Time Buyers and current customers more products or services in the future, then you should be able to convert at least 30%, perhaps much more, of your First-Time Buyers into Repeat Customers. OTHER CONVERSION RATES These are not the only Conversion Rates you can track. In fact, there probably is no limit to the number of conversion rates you could calculate in your business. But you should focus on those that will give you the greatest payback. We would recommend that you calculate your Conversion Rates once a week, preferably on the same day each week. This way you would get your score for the previous week. Then you should record your numbers on a printed log or in a computer spreadsheet, so that you can see how you are doing from week to week. If your rates are extremely low, you have now pin-pointed an area that you must learn more about. If your rates are improving, good for you, keep doing the same things. Without these weekly scores, how would you know what was working and what wasn't working? You would just keep doing the same exact things and keep getting the same poor results. That's a sure plan for failure. Every Monday morning we receive our reports that tell us all of the numbers that we generate from the week before from our Give to Get Marketing Web site, and our Get Organized Now! Web site. We carefully enter all of this information into a computer spreadsheet that we specially designed to track our results. Here are just some of the conversion rates that we collect:
The bottom line is that we know our Conversion Rates for everything in our Web business for both of our Web sites. And what is the benefit of knowing this type of simple conversion information? Well, just a few years ago we knew absolutely nothing about the Internet -- we didn't know how it worked, how to create a web page, and we certainly didn't know if we could get people to buy our products from a web site. But because we kept track of our weekly Conversion Rates, we were able to see what worked -- our numbers went up -- and what didn't -- our numbers went down. By keeping what worked and by eliminating what didn't, we have been able to build our Prospect Lists to hundreds of thousands of Prospects -- these are visitors who have signed up for our free newsletters. Our first year on the Web we generated about $20,000 in sales. Now we consistently generate hundreds of thousands of dollars a year in sales -- and we still growing! Without knowing our Conversion Rates, this would have been impossible. It would be like bowling in the dark. How could you improve your scores if you didn't know what kind of results you were achieving? The name of the game is continuous improvement of your marketing knowledge, skills, and systems. The more you learn about the special techniques you can use to improve your Conversion Rates, the more money you will make. It can't be done any other way. Your actual Conversion Rates will vary as you perform each marketing effort. But the average will remain fairly consistent. Trust me, if you can divide 10 by 100 and get 10%, then you have all of the math skill necessary to determine your weekly Conversion Rates. Do yourself a favor and start doing it this week. Run your business 'by the numbers,' and you will be amazed at how easy it is to start improving those numbers. Grow the numbers and you grow your bank account. It can actually be fun!
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