Hi there, Aubrey Here,
You can probably imagine that being an expat from the States to Europe has a lot of conversions in it – Fahrenheit to Celsius, inches to centimeters, miles to kilometers, pounds to kilos – I’m going to stop, this list stresses me out.
The point it, sometimes I feel like I can spend all day going from one type of number to another one—that’s conversion.
Conversion is also something we mention a lot in business—which is what we’re doing here today, not just talking about the woes of living with consistent math problems.
Because the term is necessarily nebulous, I wanted to give you a clear way to think about how to apply it to your business, how to think about conversion in your business, and why it’s important.
What is Conversion in Business?
This is probably something you already know, but when it comes to business the term “conversion” can mean two different things:
1 – to change something into something else.
2 – to complete the goal of #1. ← this is actually more connected to “conversion rate” but you’ll often hear this term used to convey the completion of a goal.
Either way, it’s a quantifiable piece of information that gives you insight into a target and helps you make bigger picture decisions.
We prefer to work with conversion rates, rather than raw numbers when we make decisions.
Courtney’s Take on Conversion
What is Conversion Rate and Why Use it?
A good conversion rate definition is: the percentage of how much change happened.
It tells you at what rate you’re completing your goal.
The rate is important to take into consideration because the raw number can fool you. For example, if you have 1000 optins to your lead generation campaign, you would probably be really excited – but that’s just a number by itself, it doesn’t actually say how well the lead generation campaign went – dig deeper.
So you learn that 100,000 people saw your lead gen campaign. Now you know that only 1000 out of 100,000 people opted in—and you can calculate your conversion rate ( [1000 / 100,000] * 100), which is shown in a percentage as 1%.
That’s less exciting, but now you know you need to optimize your lead generation campaign for better results, rather than just being excited and letting your lead gen go on with 1% conversion rate.
In short – using the conversion rate helps you make better decisions overall for your business.
How to Think About it in Your Business
The conversion rate you’re measuring is going to be similar to data collection—the answer depends on the question.
Most of the time when we talk broadly about conversion rate in business, we’re interested in the conversion of traffic to your website into sales on your website because this is one of the most important overarching goals you have as a business.
But, we can also talk about it in terms of things like: conversion rate of an opt-in page, Facebook like conversion rate, lead generation rate, conversion rate of ads, or any other initiative that is focused on transformation.
Think of the conversion rates you’re working with as a measure of how you’re doing on the various initiatives you have. They serve really well as indicators for whether you should push for more traffic, focus on optimization, or kill an initiative all together.
This is especially important as business owners because we tend to be super biased towards keeping the initiatives we like (read: all of them) and we tend to make decisions/set priorities based on what we like rather than what works.
Conversion Rate Tells You What Works
When it comes to building a business, we have to be ruthless as entrepreneurs.
In the beginning we take the long hours and the pay cut to build up the legacy we want to leave behind.
Every detail feels important.
Everything is a priority.
Every decision is make or break.
Everything is personal.
Frankly – it’s emotional and monetary chaos.
Focusing on the rate of conversion in your initiatives makes it easier to know what’s important and how to set up your priorities so you can actually focus on making things better in your company. It also places a barrier between what you like and what you do because your conversion rate objectively shows you what works. It helps you remove the personal ups and downs from your business so that you can stay steady and focused evenly.
Conversion Rate is a Big Deal
Your conversion rate is your bottom line, your source power, your ability to continue pushing forward.
If you don’t convert:
- Scrollers into lurkers
- Lurkers into likes
- Likes into browsers
- Browsers into subscribers
- Subscribers into buyers
You’re not going to make money with your business.
Each of those individual transformations is a step that you have to be continually working on to keep up the sales on your site. When you break it down into steps, and look at how each of these initiatives converts separately, you’ll be able to see where the weak links or missteps are in your pipeline. You’ll know what to fix to get your conversion funnel up and rolling better than ever.
You have at least 103 decisions to make today as a business owner. Do yourself a favor and follow your conversion rate to find what works for your company and where you need to focus on optimization.
Remember: 100 sales from 1000 people (10%) is a lot better than 100 sales from 10,000 people (1%).
Do you focus on conversion rate? Tell us in the comments below.