Conversion: what is it + how to calculate (the best formula)

• Task 1. Average bill in an online store and increasing profits Step 1. Battle for sales
• Step 2. Marketer activity
• Step 3. Three key words: expected, relevant, personal

So, what are the main tasks that the stage of increasing conversion is divided into?

Task 1. Average bill in an online store and increasing profits

Step 1. Battle for sales

According to one of the best Internet marketing specialists, Dmitry Satin (Usability Lab), a marketer should engage in repeat sales. What does it mean? The marketer carries out subsequent sales, after the seller who attracted the first buyer or made the first sale of the product, with the help of some personal beliefs, using advertising, or experience in using the product.

After the first sale and brought clients, the marketer gets involved in the work. He handles all other developments for subsequent sales. Of the large number of marketers, only a few are engaged in secondary sales. More often they perform only part of their work, doing anything but subsequent sales of the product. The marketer's interest should not be in a single sale, but in promoting the business itself, trying to increase its position in sales.

Step 2. Marketer activity

There is an important point that we often forget. Cost of customer acquisition and selling price are the main things a good marketer should keep in mind. A specialist working with an online store spends the owner’s time, effort and money in order to attract a client. Sometimes our customers themselves bring us new clients (word of mouth, recommendations, etc.). However, the effort and time to attract clients is a separate value, in addition to the cost, which goes into the Expenses line.

Step 3. Three key words: expected, relevant, personal

Always try to apply any actions, focusing on the fact that the words addressed to the client should be expected, personal and relevant. If you use the main rule in your actions when contacting a client, the effect will be maximum. If these rules are not followed, the effect will decrease, or you will be perceived as a spammer because you are not doing what is required, expected or wanted of you. Customer expectations must be met and personal desires or preferences taken into account.

Galloping across Europe.

You can create a mind map for a detailed analysis of all actions to attract customers in general (not only for online stores). A mind map is very convenient to use, breaking down tasks into subtasks, which allows you to act according to a specific plan.

Ways to measure conversion

In addition to the above-mentioned metric counters, Internet marketing also uses other ways to track targeted user actions.

• Call Tracking is a system that tracks calls from website visitors. Uses number substitution, so you will always know who came from which ad.
• Survey of website or offline store visitors. The easiest and fastest way to find out where the client learned about the company's activities is to ask him.
• Using promotional codes allows you to determine the promotion or advertising campaign that attracted the user.

Task 2. Battle for the average check.

Step 1. Give discounts or gifts

The most popular thing in Russia is offering goods at a discount. This is one of the best ways to advertise and attract customers. Say that you have a discount and the queue will increase, although many act fraudulently, first making an inflated markup, and then a discount on this markup ;).

However, acting honestly, a discount can be offered for the number of items per order, or by reducing your own costs.

Step 2. Reduce costs

Costs include things like:

• delivery costs (the larger the quantity in the shipment, the lower the delivery costs),
• expenses for certain taxes.

It's no secret that when paying with a bank card, a certain taxation scheme occurs, however, when using it, the owner of the online store gets less money. Therefore, it is more profitable for the owner when payment is made in cash than payment by card with commission and taxes. This is especially true when selling for large amounts. Offer the client to save money by paying in cash; in this case, both parties save. On the client's side, savings come from delivery.

Step 3. More expensive means better quality

There is another good trick, like selling a higher quality and unique product for a higher price. According to statistics, when purchasing, a consumer chooses a product based on the brand and price, although often the price increases due to the brand’s popularity. When reviewing the same product, the buyer reasons like this: low price - poor quality; high price - unjustified; the average price is what they need, the quality and price should meet their expectations. If you offer to buy the same product, but of a different brand and a little more expensive, and justify this with arguments and quality, then the chances of success increase at the same cost. Offering something more expensive on the market may or may not be customizable.

Step 4. Related Products

Another important point for increasing the average check is related products or discounts on them. As an example, when selling a camera, offer a flash card or additional equipment at a discount; the discount in this case will be equal to the acquisition costs. If we convince a client to buy from us not only a camera, but also a memory card, we save the cost at which we would attract the client separately to purchase the same memory card.

To summarize, we highlight that discounts and related products attract more buyers.

Step 5. A little math

When a buyer asks for a discount, it is more profitable not to give a discount, but to offer the consumer to purchase a larger quantity, for example, not 10 pieces, but 11 pieces, where the 11th product will be free. Or offer the required quantity at the original price, with a gift from your company. Thus, your profit will be greater than if you provide a 10% discount on the entire product. The advantage is selling a larger number of goods with a gift than making a profit from the sale of each individual product in a small or single quantity.

CLEAR formula

It happens that when doing marketing analysis for our clients, we use various formulas and accordingly search the Internet for how to calculate them.

I often find it extremely funny when an article contains a formula whose calculations do not converge because the author stupidly does not double-check them.

In the case of this article (as, in principle, with all our articles), you can rest assured. The formula for calculating conversion is correct and tested for viability on dozens of our clients.

Sales conversion = (N1 (number of buyers) / N0 (number of leads)) * 100%

For example, you have a company that provides services for installing plastic windows (this is a complex area for you, we know).

Last month, 217 people visited your office, 32 of whom bought from you and became happy owners of new windows. We calculate the numbers using the formula above.

Cv = (32/217)*100% = 14,75%

Thus, the conversion of your office, that is, of all sales managers working in it, is 14.75%.

You won't believe it, but this is the whole formula. One and only one that works flawlessly, like a Kalashnikov assault rifle.

It is used by both small companies and large chain stores like H&M. The only thing is that the larger the company, the larger the conversion is calculated, but the essence and formula does not change.

Conversion is calculated over a certain period of time. This could be sales conversion per day, per month, per year.

We recommend tracking conversion daily, and then grouping these indicators into different periods of time.

WE ARE ALREADY MORE THAN 32,000 people. TURN ON

In-scale / marketing

Average conversion

Looking ahead, I will answer your question. There is no specific conversion rate. The average temperature in the hospital is very approximate.

There are general statistics, but from time to time we see how they are shattered to smithereens on the concrete floor of reality.

For example, an offline guitar store (a narrowly focused business) can have a sales conversion rate of 60%.

And here is conversion data from a clothing store located in a popular shopping center. It rarely exceeds 10% (clothing store Mango considers a very cool conversion rate of 7-8%).

The situation on the site is the same. Everything can get comical. Two identical sites with the same products, pricing and design can produce radically different results.

The result may depend both on the quality of traffic and on the city where the company is located. We even wrote an entire article on this topic. And the video was shot, in general, they tried very hard, so pay attention to them :)

On the subject: Average website conversion: the myth destroyed

Therefore, there is no ideal conversion rate in the market. Everyone will have their own. And to determine it, you take the first metrics from your business in a month, after which you make it a minimum plan and look for ways to develop.

Introduce something new and see the results. If everything goes up, then you have a new minimum bar. And so on in a cycle.

On topic: 10 TOP quiz constructors + 30 examples

Task 3. Parallel sales.

By parallel sales we mean the moment when we attract one buyer and try to offer our services to someone the new buyer knows or works with. How can I do that? There may be more ways, but we offer the most profitable and effective ones.

Method 1: Bring a friend.

You can use this method thanks to electronic or printed coupons included with the product. A coupon can give a discount on the next product, or offer a gift when purchasing a new one. If you insert two coupons for different accounts, the buyer can offer one of the coupons to his friend (acquaintance), thereby advertising our store or product. Even with a minimal discount, you can get new customers and free advertising with this coupon.

Method 2. Discounts for likes and reminders.

Search engines consider only those links that have clicks to be good links. The greatest activity occurs on social networks, however, people who follow links from social networks, as a rule, do not buy the product. People make an online store visited by clicking and following links. Despite the fact that they are not our customers, they help search engines see live links, which allows us to rise in the ranking of product popularity, improves the site’s position in search engines, creating a kind of advertising for us.

How to calculate a funnel to increase sales conversion?

To find the weak point of an online store, a sales funnel is compiled and calculated. As already mentioned, the sales funnel is the client’s path to the target action. It contains 4 stages:

• To attract attention.
• Arousing interest.
• Decision-making.
• Action.

To make it clearer, we should consider a sales funnel using a real example. Let's say you need to calculate the effectiveness of a website providing auto repair services. Sales funnel:

• After the launch of contextual advertising, 1000 users saw it (Ӏ stage);
• Of these, 500 people followed the link to the site (ӀӀ stage);
• 250 people received preliminary consultation (ӀӀӀ stage);
• 100 people signed an agreement for the provision of services (ӀV stage).

For this information to be useful, you need to understand how to calculate conversion for each stage of the funnel. Calculations are made using a general formula.

For the first stage, the conversion is – 500*100/1000=50%

For the second – 250*100/500=50%

For the third – 100*100/250=40%

Total – 100*100/1000=10%

For a detailed analysis, the sales funnel can be represented by a large number of stages, including payment intent, budgeting, and repeat requests.

Task 4. The most important task for increasing conversion

Step 1. Souvenirs

A good marketer knows that when your service is used relatively frequently, it's worth increasing your position with small, insignificant gifts with meaning.

For example, it would be very profitable for a company that brings ready-made food to include a magnet as a souvenir, indicating the phone number and code number identifying the client as an individual consumer. If you want to order food, it will be easier and faster to find your company with only a magnet on the refrigerator. The advantage for the company is that among competitors, your position will be higher if there is clear, non-intrusive information advertising. Souvenirs with meaning are a good step for a marketer.

Step 2. Bonuses and cumulative discounts

Bonuses or an internal customer account you offer can increase subsequent sales. You offer your client to create his own personal account, on which bonuses will be collected upon purchase. These bonuses can be redeemed in the future.

For example, when ordering food for the office, a person receives a bonus in the form of a free portion for every 10-15 orders. There can be many bonus options, they depend on the product offered.

Step 3. Personal recommendations

When purchasing a product used periodically, the store continues to track its client, and at the moment when the service expires, the company offers to make the next purchase, reminding the client about itself using the contact information left earlier (mail, phone, address).

Step 4. Personal discounts are the best gifts for consumers

If when selling a product there is a way to give the client a gift, then it is better to make a nice gesture in the form of a gift than a discount, since the discount you made will be forgotten within five minutes after the purchase. The gift will bring a positive emotion and a pleasant surprise when purchasing, leaving this moment in your memory, remembering every time you use your gift. In addition, he will advertise your company, boasting to his friends about the attention he received.

Step 5. Increasing the discount on subsequent sales

When purchasing a product for the first time, marketers offer a discount on the next product. When purchasing a product with a discount card, the discount amount increases each time. The main point is to place an order more than once every three months.

Step 6. Email newsletters

A method that, unfortunately, is rarely used, but this method also brings profit to the online store. Most often, no one expects e-mail newsletters, however, such mailings are aimed at a wide range of people. Sent to a more or less relevant group of users. As practice shows, thanks to this method there are transitions and a live audience on the site. E-mail newsletters work when the online store has a huge customer base that has been gathering for years. Therefore, an unexpected personal message will help remind those who have already used them about your services. The most logical and correct way that minds have come to in this direction is a series of E-mail newsletters.

How mailings are made.

We need to prepare a chain of letters. Next, a plan is created on how to attract a client. First, we need to highlight what exactly we can tell about ourselves, our product or a new promotion.

A certain strategy is selected, a plan is written for it, which most often consists of 5-6 letters for the client. Each letter tells you something new that is relevant to the current times, including a current promotion. A chain of these letters is sent to the client, provided that the first two letters are opened, the client receives the next one. This helps avoid the reputation of being a spammer.

This is how you create a sales funnel. The first letter is received by a wide range of audiences, some unsubscribe, some don’t even open it. Therefore, the second letter is sent not only to people who have unsubscribed, but also to those who have ignored, who are trying again, since there may be different reasons for this. However, if the second letter was also not opened, mailing to such mailboxes should be stopped. There is no need to spam people who are not interested in your service. The more relevant your newsletter is, the more likely it is that a person will become interested and buy your product.

Task 5. Summarize and increase conversion

Working for conversion means working to reduce the number of errors.

We need to reduce conversion paths. The shorter the path, the fewer errors, the same “buy in one click” feature. We shift part of the costs to subsequent stages, but the person is already ready to buy from us, which means we need to do our best to retain him, providing convenience in the transaction.

Increase conversions using psychological tricks such as “how much will you save by paying cash?” You can also increase it with the help of your personal savings (for example, how much you will save by buying not one, but two, three goods), personal savings will be visible in the sales of a large number of goods.

What is website conversion

The term “conversion” is also used to analyze the effectiveness of a website. Only in this case, the definition indicates the ratio of site visitors to users who performed the target action. These include:

• subscription to e-mail newsletter;
• filling out an application;
• sending goods to the cart;
• purchase;
• entering contact information into the feedback form, etc.

Conversion is one of the most important KPI indicators. With its help, a complete analysis of the sales funnel is carried out and it is determined at what stage the customer leakage occurs. This allows you to accurately identify problem areas on the site.

The sales funnel is the path that every client goes through, from attracting attention to completing a transaction. You can monitor the number of clients at each stage of this journey using regular visitor counters. Most often, two services are used for these purposes: Yandex Metrica and Google analytics.