Posting tweet...
My son had a friend for a sleep over last night, and we took him out to dinner. On the way in the car we were talking about what you want to be when you grow up. My son’s friend said he wanted to either be a doctor like his father, or a evil genius. What a choice!
In my last post I talked about how you can use the funnel concept in marketing as a measure of your success. Fundamentally the way the funnel works is that it allows you to increase your performance (read ‘make more money’) by either changing the amount of stuff coming into the funnel, or by increase the conversion rate.
Firstly we’ll talk about the conversion rate. The most common sell page I see on the web today is a long page full of testamonials, audio snippets, video recordings, teasers and guarantees that what ever you might be will be worth it. There is a train of thought that basically implies that because there are so many of these styles of pages on the web that they must work. And even though I’ve never actually used one I’ve read about their great success in a number of places.
In our last example we identified a conversion rate of 0.1%. Using a better selling page you have the capacity to sell more to the same amount of people visiting your website, and remember even small increases can have a substantial affect on your income. You may find that fine tuning your sell page you might be able to increase your conversion rate so that 10 in 1,000 people buy your product. Using the formula we worked out last time this means a conversion rate of 1% (10/1000), much more respectable.
There are of course many ways to increase your conversion rate, and a better ’sell’ page is only one. The problem with is that you may find that there is a definite ceiling to your conversion rate. It’s rare to find anyone doing over 5%, and near impossible to do anything over 30%. So don’t expect to go much over the originally discussed range of about 3%. Once you get there you may as well stop trying to increase, or more to the point concentrate on another part of the funnel, as you’ll find that your efforts simply don’t pay off anymore.
No matter what you have to offer at some point it needs to be sold. I think the key thing I have learned about selling over the past 15 years or so is that selling is really a numbers game. NOT EVERYONE WANTS OR NEEDS YOUR PRODUCT. But there is a guaranteed percentage that do.
This percentage might only be small, but regardless if you have an idea of where you want to be and what percentage will buy then you have a plan for success.
“While the individual man is an insoluble puzzle, in the aggregate he becomes a mathematical certainty”
The concept of the marketing funnel is really simple, but holds great value. You see I believe many people concentrate on getting the sale, and don’t get me wrong it’s important. However in most cases the sale will happen with a degree of predictability, what you need to concentrate on is the conversion.
The funnel concept is this: If you tell enough people about your product then mathematics can tell you how many products you will sell.
For the sake of simplicity, lets say you have an ebook you want to sell, so you really only have one product. And to make things even more simple lets say that right now on average you sell one a day on your website, and finally you might get about 1,000 hits per day on your site.
So the way the funnel works in this case is that for every 1,000 hits on your website you make 1 sale, or 1/1000. This gives you a conversion rate of 0.1%. To be honest this is a little low, most website owners expect a conversion rate of between 1% and 3%. A conversation rate of 0.1% might be ok however if the product you are selling makes you a lot of money, hundreds or thousands of dollars.
So, whats the result? Well you need to look at the conversion rate as a key to your success, then look at how you can improve the conversion rate, or improve the funnel, more on that another time.
