Everybody talks about “conversion”, but what does it actually MEAN? In today’s episode, I’ll explain conversion, conversion rates, and whether or not you, in your business, even need to care.
How do we measure conversion? DO we even measure conversion? Should we be measuring anything else? All this, and more, will be revealed. Give me less than 10 minutes, and I’ll explain… conversion.
Just click play, and I’ll meet you there.
Transcript & Shownotes
Welcome back to Naomi Explains Marketing, the show where I help coaches, consultants, experts, authors, and other associated nerds, geeks and misfits sell the contents of their brains for cash money. I am your host, Naomi, and today we’re talking about conversion.
Let’s do this.
Conversion is whether or not a given person took the action you were hoping they would take. Conversion rate is the percentage of people who were given the opportunity to take the action and ended up doing so.
In theory, the word conversion could be used for virtually any action you might want a given person to take. Did they sign up for your webinar? Did they sign up for your mailing list opt-in? Theoretically, it could be pretty much anything. But in practice, the word is generally used to apply to the percentage of people who purchase an offer from a sales page.
In its purest form, it works like this: 100 people visited your sales page, and two people bought. Two is 2% of 100, so your conversion rate for that page is 2%.In a pure and perfect universe, you could predict that if 1000 people visited your page, you’d make 20 sales. If 10,000 people visited your page, you’d make 200 sales.
I am pleased to inform you that the universe is not pure and perfect, and your results are likely to be far better than this sad and meagre picture paints.
To understand why this is the case, we need to have a little bit of a history lesson.
Where does the concept of a conversion rate even come from?
When people in marketing refer to a conversion rate, the concept comes from what’s called direct marketing. Direct marketing is marketing directly to a consumer, without an intermediary like advertising.
You know those letters are used to get in the mail, where they tried to sell you some figurine or commemorative coin or something? That’s direct marketing.
Some Franklin Mint knock off company bought a mailing list, and your name was on it. They wrote a sales letter, threw in some product photographs – or illustrations, if we go way back – and added a few testimonials. They stuck their letter in an envelope, and mailed it to you.
If you bought the thing, you converted. The percentage of people who got the letter who ultimately converted made up their conversion rate.
In almost all cases, the letter was sent what we call cold… No warm-up, no pre-existing relationship, just a random letter from a random company asking you to buy their knickknack.
Unsurprisingly, very few people buy knickknacks under those circumstances, which led to very low conversion rates. In general, nobody cared, though, because mail was cheap, and those who did buy could reliably be assumed to buy more stuff in the future. It wasn’t that bad of a way to make a living.
However! I’m going to guess that this is not the way you make your living.
I’m guessing you don’t buy a bunch of names and ask them, cold, to buy your thing.
I’m guessing that you have a relationship with these people, that they’ve consumed some of your content already, and that you have at least a moderate amount of name recognition with the people you’re sending to a sales page. Based on this, old school “what’s a good conversion rate?” questions simply don’t apply to you.
Assuming you take a modern approach to your marketing initiatives, the way your people end up on your sales page probably looks more like the following: you communicate with them in some way that something is coming… a product launch, a sale, that sort of thing.
The medium through which you communicate this is based on your chosen marketing strategies – maybe email, maybe text message, maybe social media posts, maybe even social media direct messages. For our example, we’ll assume it’s a launch, and we’ll assume your communication is via email. That’s one point of contact.
Then, you’re possibly going to have some kind of launch content. For most people, this is going to be between 3 and 8 pieces of content that draw attention to and build awareness of your product. That’s 3 to 8 pieces of communication, possibly more if there’s any live component to your launch, like a webinar or video Q&A.
Then you’re going to send them more pieces of communication reinforcing the timeliness of your offer. One day left, last day, last chance, that sort of thing.
At some point in that process – possibly very early – your prospective buyer is going to click a link and be brought to a sales page. This prospect is now considered warm – they are not opening a random piece of mail asking them to get out their check book.
They knew this was coming, and they went to the sales page by their own free will and volition. This person is far, far, far more likely to buy a product than your great-aunt Matilda was likely to buy a commemorative coin on no notice from a stranger.
But! The plot thickens.
Most people in this day and age do not see a sales page and buy immediately. Some do, and god love them. But most people don’t.
They take an initial look and go away to think about it for a while. They may do it again when they get another piece of communication from you. If you’re using remarketing cookies, they may buy when they see an ad for your product later. However they get there, they may do this several times before they ultimately convert.
In this day and age, there are FAR more points of contact between offer and conversion than there were in grandpa’s day. As marketers, we have far more access to information about that process.
We can now know how many people opened the email, but didn’t click. We know how many people opened and did click. And we can know how many people ultimately bought. If you’re using email marketing, you can even know WHICH people opened or clicked, and which email was the one that did it.
So conversion rate, thankfully, is not the “write a sales letter and pray” process that it used to be. We have far more influence and access to information than we’ve had at any point in the history of marketing, so technical conversion rate doesn’t matter too much.
Sure, learn copywriting techniques to up your chances. But you have a lot more influence than one teeny tiny sales page. Hurray for technology.
So that’s conversion and conversion rate – the percentage of people who did what you were really hoping they would do.
In our next episode, I’m going to be explaining call-to-action and debunking some pervasive myths that hang around like unwelcome guests at a party. In the meantime, be extra nice to yourself today, and I’ll see you very soon.
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