Business musings...

The process I used to keep track of my sales pipeline used to be a bit complicated. Accurate: yes. But simple? No.

As a result, it was hard to update. The more complex something is, the more commitment it takes to use it.

So, following a conversation with my business coach (who supports my own personal development and keeps me on my toes!), I’ve radically simplified the number and type of stages in my sales pipeline. Now it is much easier to gauge my pipeline at a glance and to see gaps in the flow.

The result? I’ll use it much more.

In your business, is there anything that is more complicated than it needs to be?

Why not challenge your team and your customers to see what they think could be simplified in your business. You might be surprised at the results.

Whilst not a ‘cutting edge’ idea, the concept of conversion rates is an extremely powerful one.

Your sales conversion rate (as a percentage) is basically:

([number of sales generated] / [number of interactions with potential customers]) x 100

Whether for online shops (where your sales conversion is the number of visitors who make an order) or for more traditional businesses (where the sales conversion may be the number of telephone enquiries you win business from), the general principle is the same.

I’ll show you the calculations and let you see for yourself.

Current position for this year
Number of website visitors = 500,000
Number of orders = 10,000
Conversion rate = 2%
Average spent per order = £20
Total value sold = £200,000

Increased sales – same conversion rate
Number of website visitors = 550,000 (10% increase)
Conversion rate = 2%
Number of orders = 11,000 (1000 extra orders)
Average spent per order = £20
Total value sold = £220,000 (increase in sales value of £20,000)

Same sales - increased conversion rate
Number of website visitors = 500,000
Conversion rate = 3% (increased by 1%)
Number of orders = 15,000 (5000 extra orders)
Average spent per order = £20
Total value sold = £300,000 (increase in sales value of £100,000)

For every company the figures will be somewhat different, but the concept is still the same: converting your existing potential customers is often more lucrative. The beauty of conversion is that it doesn’t have to cost you anything in trying to find new customers. They have already found you; it is now your chance to turn them into customers.