Sales conversion rates are something we focus on a lot here at Aonach. As part of our services to help businesses position themselves online and maximize revenues, conversion rate optimization is one of the factors that can deliver dramatic results for business owners.

One of the key factors in any business is your sales conversion rate - the proportion of leads you can convert to sales. It’s no different online, your sales conversion rate (or simply conversion rate) is fundamental to success.

Why? Well, it’s really very simple…

On the internet there is a cost associated with the generation of qualified leads:
The cost of designing, developing and maintaining your website, the cost of search engine optimization and the cost of marketing (both online and off-line). These costs when divided by the number of visitors to your site gives you the cost of acquiring a lead.

So lets assume that the cost of acquiring a visitor to you website is €1 and the margin a sale is €100 then to break even you need to have a conversion rate of 1%:

100 visitors X 1% = One Sale at €100 margin - Result Breakeven

However if you could improve your conversion rate to 1.2% then you would improve your proposition dramatically:

100 visitors X 1.2% = 1.2 Sales at €100 margin - Result €20 profit ie 20% profit
As the costs of acquiring the traffic remain the same the improved conversion rate fundamentally changes the profitability of your operation.

What are the factors that effect conversion rates in online business?
This is a complex area, however in our experience some of the key the factors that effect online sales conversion include:

1. Price (competitiveness)

2. Brand and website credibility

3. Usability
The profitability (and therefore viability) of your online business can pivot on this simple conversion rate. So it’s really important to understand the key factors that affect your conversion rate and also to understand the full costs of acquiring visitors to you website.

As with any part of your internet strategy, Metrics are key - measure, measure, measure. The are may tools to help you understand your online performance, Google Analytics is probably one of the more powerful tools available.

If you need help improving your website conversion rates we can help! We help companies drive sales from their websites. If you want more from your website contact us today.

This entry was posted on Sunday, October 7th, 2007 at 10:55 pm and is filed under Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.