What Does Client Conversion Actually Mean?
Small business owners hear lots of terms and phrases that perhaps not everyone fully understands or could interpret quite differently. Terms and phrases like:
Client Conversion, Profit/Revenue/Margins vs Cash Flow and Viability, Value and Impact creation, Unique Compelling Propositions, Problem solving, Costs fixed vs variable, Nurture programs, CRM/Marketing vs Advertising vs Social Media, Pricing Points, Ideal clients/Avatars/Prospecting, Features vs Benefits, Goals-Targets-Plans-Strategy-Purpose-Intent-Values, Networking, Outsourcing….and the list goes on (and on).
Fundamental aspects of running a business
As a business strategist and mentor I often see small business owners not paying enough attention to these fundamental aspects of running a business or misinterpreting what they mean.
So, I thought it may be helpful to describe what some of these things are in simple terms and what the benefits are for each if deployed well.
Let’s start with Client Conversion
(this has a relationship to Profit/Revenue/Viability/Costs/Margins for your business but more on these in later posts).
At its heart Conversion is all about how many clients (past existing or new) you need to convert i.e. from a discussion or proposal into a paid sale to achieve your financial objectives because;
Every Referral received/Contact you make, does not turn into a Meeting.
Every Meeting you have does not turn into a Proposal
Every Proposal you make does not turn into a paid Sale.
So spend some time thinking about your current experience in generating successful sales and what frequency you achieve in making a successful sale.
Many clients tell me, their success rate is about 50% if they make a proposal however only 30% go from a meeting to a proposal! Let’s see what this looks like on a Monthly basis:
The Questions to be asked are:
If 3 converted sales are enough for your business viability?
How can I improve my strike rate or conversion rate to better utilise my effort in marketing to and meeting with 20 prospects per month
Then set yourself a goal to better engage Prospects to convert to Proposals to convert to Paid sales.
What if better marketing and value proposition clarity leads to improved Prospecting, compelling Proposals and improved Sales conversion from the same number of referrals/meetings?:
Higher conversion of Prospects to Proposal to Sales, leads to a doubling of Revenue without doubling your referral/meeting rate.
Imagine if you better target prospective (and past) clients and increase your likelihood of conversion to 60% from compelling Proposals….your revenue would rise to $20k which is 2.5 times what it was firstly in the example above…. but remember from the same number of prospect meetings.
You do not want to double your prospect meetings to double your sales revenue as you will likely overwhelm your capacity to hold meetings with perhaps the wrong clients rather than the target clients more likely to convert.
There are other aspects to consider here like Pricing, Target marketing, compelling problem solving Proposals/Propositions and I will cover these off in future posts.
I hope this post on Client Conversion makes you ask the right questions about your Business Purpose and Marketing and current activity.
Hello,
I am Leigh Powell and I joined Your Time Matters as a Business Strategist and Mentor in 2016.
My role is to help you lean into what you know you should do, take responsibility for it, and turn it into a profitable strategy. How do I do this? Well, asking questions is the first step: discovering where you are and where you want to be, learning about your networks, resources, budget, cashflow, constraints, and more… would you benefit from a FREE 20 minute conversation, no obligation…book a time HERE and let’s have a conversation .
