Development of recommendations for increasing the conversion rate in retail organizations. Sales Conversion

The sales funnel is the customer's path from the moment he learned about your offer until the moment of purchase. The funnel consists of several stages that you set yourself and through which your potential client moves towards completing the transaction.

Sales conversion: how to build a funnel

To track sales conversion, you need to build a funnel correctly. A funnel reflects the stages of a business process. Therefore, the first thing you need to do is describe your business process. The second is to track it using the employee’s working day card. Third, optimize the business process if necessary. Fourth, move it to .

You'll end up with something like:

• Cold call/request from the website
• Sending a commercial proposal
• Follow-up call/meeting/presentation
• Signing the contract and issuing an invoice
• Payment

In this funnel, it is important to control not only the conversion rate, but also the input - the number of leads, the output results - the number of successful transactions, the intermediate conversion between stages, the length of the transaction - the number of days spent on; the length of each stage is the number of days spent on intermediate actions.

Sales conversion: calculation formula

Conversion is the very first indicator that is important to be able to calculate and analyze in order to set up sales control. Let's look at an example of how to calculate the conversion rate of a sales funnel:

Conversion = Positively Closed Trades / (Positively Closed Trades + Negatively Closed Trades) * 100%

In our example, despite different number new customers every month, conversion has remained virtually unchanged. And this is a reason to think about what happens at different stages of the sales funnel, where you lose customers.

Conversion in the funnel allows you to see the real situation in sales. Positively closed transactions can only be divided into transactions for which a clear decision was made to buy or refuse. Probable clients do not influence this indicator in any way.

Please note that in in this case closed transactions in January – 8, in February – 14, in March – 24. The remaining clients, who are in the “new” category, switch to next month. That is, 17 January transactions moved to February, in February the manager has 72 transactions in progress: 55 February and 17 January. From 72 transactions, we subtract 14 closed ones, and we get 58 transactions that moved to March. In March, the manager already had 158 transactions in his work, and the sales result has not changed at all. This means it’s time to analyze at what stage your clients get stuck.

Sales Conversion: Sales Channel Report

We analyze the sales funnel in terms of channels for attracting new customers. Let's say we calculated that the conversion rate for one sales channel is 8%, and for another - 38%.

Now you need to make the right management decision that will affect sales growth. It is worth considering that both channels are run by the same specialists, warm leads are processed by the same sales managers.

The only difference is the sources of attraction. Let's say you compare funnel sections for cold calling and Yandex.Direct.

The right solution for sales would be to strengthen the channel in which the conversion is higher. There is no need to invest effort where the result is worse. We need to improve what already works well. That is, you need to develop a channel with a conversion of 38% and abandon a channel with a conversion of 8%.

This is why it is necessary to measure sales conversion in the funnel. Then you will be able to improve your results not by recruiting more managers, but by making smart management decisions.

Sales Conversion: Reference Manager

We analyze the sales funnel in terms of the work of managers.

Based on the data, this salesperson has a worse sales conversion rate than managers with the results shown on the previous two slides.

What conclusion can be drawn from this example? First of all, we see that this manager is qualifying leads strangely. He believes that almost all clients are not targeted. Judging by the conversion funnel, he only has 8% going to next stage funnels. For the manager from previous sections of the funnel, this conversion rate is 57% and 80%.

In this situation, two solutions can be taken to improve sales conversion:

1. Work with a manager whose conversion rate is worse until he achieves the same indicators as the sellers from the previous slides.
2. Fire this manager. Transfer his requests to an employee who has a higher sales conversion through the funnel.

What steps need to be taken to improve sales conversion

Step 1: Set up sales funnel analytics
Step 2: Increase your sales by improving the conversion rate of each stage of the funnel. You can work in two directions: increase throughput funnels and reduce the duration of each stage.

Analyze your business's sales funnel conversion rates. Make the right calculations and make the right management decisions to grow profits.

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Advertising companies on the Internet are good because they give you the opportunity to track your conversion, the effectiveness of each channel and understand how much the company earned. Therefore, it is important to know how to calculate website conversion. The problem is that not everyone knows how to calculate conversion correctly.

Read in the article:

• What is website conversion
• How is website conversion calculated?
• How to calculate other indicators (CPA, CTR, ROI)
• How to check conversion

What is website conversion

First you need to clearly understand what exactly you need from advertising. A goal like “Increase website conversion” will not work. You need to clearly understand how much you are willing to pay for one client and how many clients in at the moment you are ready to process. Set realistic goals for your website and store.

What are the desired actions on the website:

• Purchasing goods, ordering services;
• Registration of visitors;
• Subscribe to the newsletter;
• A certain amount of time spent by a site visitor;
• A certain number of web pages viewed by visitors. That is, viewing depth;
• Number of people who returned to the site, etc.

You can also calculate the micro-conversion of website visitors. For example, clicking a link, watching a video, scrolling down a page, etc. These are also valuable because they indicate some level of interaction with the site. Such small actions by visitors can be useful in a website usability audit. Small elements also need to be tracked in web analytics.

Conversion site is the percentage of site visitors who completed the desired action.

Conversion allows you to understand how effective your website and your online sales are.

How is website conversion calculated?

The calculation is carried out using a simple formula.

How to calculate website conversion formula

= (the number of visitors who completed the target action divided by the total number of all visitors) and multiplied by 100%.

How is conversion measured?
Website conversion is measured as a percentage (%)

How to find out store conversion?
It's simple.

Let's consider an example: with a budget of 20,000 rubles. for contextual advertising and with a traffic of 1000 people receive 50 calls per day. Then your conversion rate will be 5 percent. That is, the calculation is as follows: (50 calls / 1000 people) * 100% = 5%.

Example of calculating website conversion

Let's look at another example of how website conversion is calculated. More clearly.

• The total number of unique visitors is 1000 people.
• The number of views of products or services is 200. At this stage, 30 people called you.
• The number of goods/services added to the cart is 100 pcs. Another 20 visitors called.
• Paid for the order - 70 visitors.
• As a result, we get: the total number of calls in our sales funnel was 30 + 20 = 50 calls. Of these, 30 visitors paid.

Conversion site = ((70 people + 30 people) / 1000 people) * 100% = 10 percent.

Thus, you will find out which advertising channel is more effective for your store. Invest more money there. Where site conversion is low, you should check the quality of your traffic. Is your advertising campaign aimed at the target audience?

How to calculate other indicators

Let's consider a few points, namely what opportunities the information on how to calculate website conversion gives us.

If you use to attract web traffic to your site contextual advertising, then you know exactly the cost of one visitor. Those. how much money do you pay for one attracted buyer? Based on these indicators, you can understand whether contextual advertising is profitable.

CTR is an indicator of the quality of your ads. Click through rate. How attractive are your ads to visitors? The calculation is also quite simple.

CTR = (number of clicks on your ad divided by total number of impressions) * 100%

Search engine promotion site

If you use to attract traffic search engine promotion, then you either again know the exact cost of one visitor (if payment is for transitions, as with traffic promotion), or you can calculate this cost.

It is calculated easily (formula): you take the cost of promoting one request to the top and divide it by the number of people who came from this request.

Conversion in Yandex Metrica— the number of visits during which the target action occurred.

• Transition cost;
• Customer cost;
• Client's profit.

With this table, you can determine how profitable it is for you to invest in the Internet, that is, find your ROI (return on investment) for Internet marketing.

ROI formula

= ((profit from internet marketing – investment in internet marketing) / (investment in internet marketing)) *100%

• If ROI
• If ROI = 100%, then income = expenses.
• If ROI > 100%, then site sales are growing.

What is considered a good conversion?

The conversion rate depends on many factors: business topics, prices, competition, and the products and services offered. For example: If a store sells low-cost goods (pizza, office supplies, ice cream, etc.) where no major decisions are required, then the conversion rate will be higher. Compared to a store that offers expensive goods(buying an apartment, household appliances, car, etc.). But this does not mean that such a conversion ratio will be in profit.

For example: Website traffic is 1,000 people, conversion rate for apartment sales is 10%, then the company will receive a huge profit with this indicator. And it will be absolutely normal. And for a store selling pizza, this will be considered a small conversion, with a low profit.

What is a normal conversion rate?
There are no standards, no universal numbers. Each industry has its own conversion rate.

Conversion is considered good- if your current value exceeds the value for the previous period.

How to check website conversion

2 popular counters will help you set up and check website conversion at any time.

• Yandex Metrica - https://metrika.yandex.ru
• Google Analytics - https://www.google.ru/analytics/

Conclusion

Now you know the answers to all the questions. Knowing the conversion will allow you to find out more information about the effectiveness of your website, your sales, the cost of one client attracted from different advertising channels, as well as ROI (return on investment).

Happy sales to you!

P.S. If you need a professional look at your website, then this is the place for you to increase your online sales without increasing your advertising budget.

• Select the desired action.
• Calculate website conversion.
• Start improving your website to increase conversions.

Read other useful articles

The meaning of the word “conversion” depends on the scope of its application. In Internet marketing, this is the ratio between all website visitors and those who performed the target action: indicated an e-mail, registered for a webinar, etc. In online advertising, conversion is the ratio of banner impressions to link clicks. And in traditional sales, the conversion rate is the ratio between the number of all customers who showed interest in your product and those of them who made a purchase.

According to experts, all promotion work in the company is aimed precisely at increasing this indicator.

Counting on our fingers: calculating sales conversion

Most often this indicator is measured as a percentage, however, simple fractions can also be used. Let's try to calculate the sales conversion rate, the formula is very simple:

(Actual clients/Potential clients)*100%

Let's consider: for example, this month you closed 2000 transactions, and only 2 of them were won. This means the conversion is 0.1%:

(2/2000) * 100% = 0,1%

If we assume that the company from our example worked on the mistakes and was able to convert not 2, but 200 potential buyers out of 2,000, to sales, then the conversion will increase to 10%:

(200/2000) * 100% = 10%

Please note that when calculating conversion, only closed trades (won and lost) need to be taken into account, since open trades may still sell in the future.

Thus, we calculated general level conversions. If your cycle of working with a client includes several stages, forming a sales funnel, then you can calculate the conversion for each stage.

Similarly, you can calculate the conversion separately:

• for each manager - we identify who sells well and who needs additional training or a motivating kick;
• for each sales channel - for example, an online store brings in such and such a percentage of customers, and a physical one - so much;
• for each product or service - some sell better and some sell worse with a similar base of potential customers;
• for each location - somewhere your services are in greater demand, somewhere less.

Why do we need to know this: applying conversion in practice

As you understand, there is a conversion at every step of the sales funnel, and if you count them all, you will get huge set numbers What to do about it now?

1. “Cure” the weak points of the sales process

By understanding how to calculate sales conversion and knowing its exact indicators, you can find and correct errors in the company's work. Have you discovered that a manager loses most of his clients at the cold calling stage? - and things will go better. Have you found that buyers respond well to cold calls, but fall off during the presentation stage? This means that the presentation needs to be improved.

For example, like this:

We measure the effectiveness of innovations

Knowing the starting point makes it easier to assess the effectiveness of any changes. Have you made adjustments to your sales funnel? Have you changed the layout of the site? Did you give managers new scripts? This will immediately affect the conversion: if the indicators have increased, you are on the right track.

Dave Garr, co-founder of UserTesting, as part of a survey by the analytical platform Kissmetrics:
- We increased the speed of our website - and conversion increased by 73%!

Blake Williams, co-founder of Keepsy, as part of a survey by the analytical platform Kissmetrics:
- So far, nothing has increased our conversion more than the fact that we “stuck” two large green buttons with a call to action in the middle of the site.

We forecast costs

Let's say you sell 5 units of product a week, but you want to sell 25. Having tracked the conversion, you realize that to sell 5 units you had to call 50 customers. This means that to sell 25 you need to make 250 cold calls. Now you know exactly what task to set for managers in order to achieve desired result and you can calculate how many resources this will require: in this case, 5 managers with a plan of 50 calls.

It can be even simpler: we use a CRM system

A CRM system will help simplify your work with conversion. Honestly, you may not even know how to calculate sales conversion: smart program It analyzes the data online and produces visual reports. For example, to analyze the sales funnel, a special diagram is used: it indicates how many transactions are at each stage of work and what their amount is.

Moreover, the CRM system allows you to detail the funnel data. For example, display in it transactions not of the entire sales department, but of an individual manager. Or indicate only those transactions whose clients came from a specific source. This way you can compare the performance of different employees, look for more effective advertising channels, and much more.

You do not need to personally collect and analyze information - the CRM system will do it for you. It also contains all the right set tools to take action quickly. Right now you can evaluate the ease of working in CRM, in the program.

Conversion rate essentially reflects success in converting leads into real clients. For example, once you've attracted visitors or potential customers (either to your actual store or to your website), your next job is to convert those visitors (or potential customers) into actual customers.

The key question this metric helps answer is: What is our ability to convert prospects into actual customers?

What you mean by conversion may depend on your goals. In the physical world, this could mean the number of customers who enter a store and then make a purchase. In the online sphere, this could mean ordering a product or refer to an online visitor making a phone call, who has signed up for a membership, subscribed to a newsletter, downloaded software, or other actions, depending on the requests of marketers, advertisers and content creators.

Conversion rate analysis gives companies insight into the level of alignment of their sales and marketing strategies with production processes. For example, leaving 500 people attracted to your store or website without making purchases will require special attention. This may mean that the product offering on the website or in the store does not meet customer expectations, visitors could not easily find the product they were looking for, the product is too expensive, etc.

There are many types of conversion rates depending on the purpose of measurement. For example, here are some of them:

• visitor purchase conversion rate;
• conversion rate of attracting potential clients;
• click-through rate;
• tender conversion rate.

How to take measurements

Information collection method

The method of collecting information will depend on the application of the conversion rate - websites or physical stores. Free tools web analytics allow you to track the conversion rate along the so-called sales funnel - the visitor’s path from the initial offer to the target action (for example, purchase). In the physical world, retailers often use a simple mechanism to count the number of people entering a store and compare that number to the number of purchases made. However, more sophisticated technology is now available that allows stores to follow the customer with cameras and then with software automatically determine the conversion rate.

Formula

In his simplest form The conversion rate is the ratio of the number of target achievements to the number of visitors:

Conversion rate = (Number of target achievements / Number of visitors) × 100%.

Target achievements can be broken down into separate blocks (for example, conversion of page views or views advertising banners per visit - also known as click-through rate; conversion of clicks into filled carts; conversion of shopping carts into orders, etc.).

Conversion rate is a metric best tracked continuously.

The choice of information source will depend on the area being measured. For websites, the source of information is online tracking systems or web analysis tools; for physical stores, the source of information is a people counting system and sales data.

The cost of measuring conversion rates will depend on the application - websites or physical stores. When measuring the coefficient for sites, the costs will be minimal, since analytical tools are used for these purposes, allowing all actions to be performed automatically.

In the case of shops, shopping centers, airports, it is necessary to install recording systems in the form of surveillance cameras and software. This increases costs accordingly.

CONVERSION RATE

IN RETAIL TRADE ORGANIZATIONS

Shishkina A.V.

teacher, South Ural state university, Chelyabinsk

Lukasheva K.E.

Bachelor, South Ural State University, Chelyabinsk E-mail:lukasheva. karolina@ gmail. com

DEVELOPMENT OF RECOMMENDATIONS FOR IMPROVING

THE CONVERSION COEFFICIENT

IN ORGANIZATIONS OF RETAIL TRADE

Shishkina A.V.

educator, South Ural State University, Chelyabinsk

Email: [email protected]

Lukasheva K.E.

bachelor of South Ural State University, Chelyabinsk

ANNOTATION

Using the example of one of the children's goods stores in the city of Chelyabinsk, we consider possible reasons low level conversion rate used in retail organizations to assess the effectiveness of their activities. Particular attention is paid to the problem of recording store visitors who are not potential buyers. Recommendations have been developed for obtaining a reliable conversion rate and increasing its value. The recommendations presented are relevant for any retail trade organizations that have similar operating conditions to the children's goods store discussed in the article.

ABSTRACT

For example, one of the shops of children's goods in city Chelyabinsk discusses possible reasons for low conversion rate used in retail organizations to assess the effectiveness of their activities. Special attention is paid to the problem of accounting for store visitors who are not potential buyers. Recommendations for obtaining reliable conversion rate and increasing its value. Provides recommendations relevant to all retailers that have a similar context considered in the paper shop.

Key words: conversion rate, store, retail, visitor counter, customer accounting.

Key words: conversion rate, shop, retail, counter, account customers.

There are many indicators to evaluate the performance of a retail trade organization (hereinafter referred to as the store). One of them is the conversion rate, which undoubtedly can be classified as the most significant and frequently used.

The conversion rate in a retail store is the ratio between the number of potential customers who enter the store and the number of customers who purchase the product (actual customers).

Traditionally, the conversion rate is calculated using the formula:

K= N / N 0 * 100%,

where K is the conversion rate, %;

N – number of buyers who made a purchase, people;

N 0 – the number of potential buyers registered by a special store visitor counter.

For example, if 100 people came into the store in a day, and 5 people made a purchase, then the conversion rate will be 5%.

Thus, to calculate the conversion rate, data on two indicators is required. The first of them - the number of buyers who made a purchase - can be determined by the number of checks punched per day (most often one buyer is given one check, rarely does anyone ask to make one purchase with different checks). The second metric needed to calculate your daily conversion rate is the number of customers who entered the store during the business day. This counting of visitors is carried out by a special counter located at the entrance of the store. This information is available to the analyst and is contained in the management accounting of the retail trade organization.

Sometimes store owners do not understand the reasons for the low conversion rate - why is the number of store visitors high, but only a few customers make actual purchases?

Answering this question, let’s consider the economic performance indicators of one of the children’s goods stores in the city of Chelyabinsk for the period from 12/01/16. to 12/31/16. (the indicators highlighted in the table fall on weekends and holidays).

Performance indicators of a children's goods store for December 2016

According to the data given in the table, the following conclusion can be drawn: usually in weekdays the conversion rate is higher than on weekends. This is explained by the fact that on weekdays the store is visited by fewer visitors, but they come to the store purposefully to purchase goods. On weekends more people visit the store without such a goal; in addition, with a large flow of visitors, choosing a product becomes uncomfortable, there are not enough sales assistants for everyone, the quality of customer service decreases, which negatively affects sales, and, consequently, conversion.

The store managed to achieve the standard established for the conversion rate of 15% only several times a month, mainly on the days before New Year. On the remaining days of the month, the conversion rate is significantly lower than the standard value.

There may be several reasons for reduced conversion; they can be divided into internal ones - depending on the management decisions of the store administration, and external ones - which do not depend on the management. Both of these reasons have been studied by many researchers, for example, a specialist from the Start Marketing company Lyudmila Aleshnikova and others.

Let's consider possible internal and external reasons reduced conversion rate in one of the children's clothing stores in Chelyabinsk.

Internal reasons include:

1) ineffective work of sellers. A sales consultant who has poor sales technique cannot effectively fulfill his duties: advise buyers on the quality of the product, the rules of operation and care for it, cannot convince the buyer to make a purchase and encourage him to purchase related products;

2) untimely sorting of the store with goods. If there are interruptions in supplies, the store may experience a shortage of goods, while customers are deprived of the opportunity to choose goods by size, color, model, and so on. The lack of assortment choice becomes the reason for refusing to make a purchase;

3) incorrect location of the goods on the sales floor. In this case, buyers do not have the opportunity to freely navigate product groups and make purchases without delays. In addition, inaccurately laid out goods impede free passage between store shelves and displays and limit access to the desired products. As a result, without seeing the desired product, the buyer leaves the store without purchasing;

4) presence of defective goods. In the absence of quality control of goods received from suppliers and their pre-sale preparation, there is a risk that defective goods may end up on store shelves. Even a low percentage of defects can have an impact negative impact on the conversion rate, since low-quality products cause disappointment among customers and discourage them from shopping in this store.

The main external reasons for a reduced conversion rate are:

1) large number visitors who are not potential buyers on weekends and holidays. Walking through a shopping and entertainment complex, for example, while waiting for a movie show to start, store visitors are simply passing the time; they do not intend to make purchases;

2) weather conditions. For example, in the summer, when it rains, the number of visitors to the store increases, but this is not due to their desire to purchase goods, but to the need to wait out the rain. The number of sales at this moment does not increase in proportion to the increase in the number of visitors, so the conversion rate decreases;

3) false advertising information. It happens that an actively advertised product is out of stock and customers who came specifically for this product leave the store without purchasing. However, their visits are counted and reduce the conversion rate;

4) end of the month, days after holidays. At the end of the month or after major holidays, buyers complain about lack of money and postpone purchases until payday. During this period, customers visit the store to get acquainted with the range of goods and prices and do not make purchases.

These internal and external reasons prevent potential buyers from turning into real ones. This reduces the conversion rate and indicates low efficiency of the store, which negatively affects not only the owner’s opinion of the store’s work, but also the employees (they are deprived of bonuses and even fired).

Another reason for a reduced conversion rate is an incorrect visitor counter reading. The fact is that the counter is currently installed at a height of 140 cm, so it counts not only adults who are able to make a purchase, but also children of primary school age, baby strollers and carts from grocery stores. Thus, the meter readings are inflated and artificially reduce the conversion rate, making it unreliable.

Based on the above, recommendations have been developed to reduce the risks of unreliable calculation of the conversion rate and increase its value:

1) regular implementation of activities aimed at improving the quality of service to visitors: training in sales techniques, trainings for sales consultants, monitoring their knowledge and practical skills through certification, and it is also recommended to timely identify and screen out ineffective and unmotivated salespeople;

2) advance replenishment of inventory in accordance with the assortment matrix of the trade organization, sorting the store not only by size ranges (if this concerns children's clothing and shoes), but also by new collections; from time to time it is necessary to add new items to other product groups (for example, toys , baby food and so on);

3) control of the display of goods on the sales floor: it is necessary to monitor the correct arrangement of goods by product groups and appearance exhibition samples. In addition, it is recommended to make navigation around the store easy to understand so that customers can easily navigate it and find the products they need on their own;

4) sorting of goods upon receipt from a supplier or warehouse and carrying out pre-sale preparation of goods. This measure will prevent the appearance of defective products on the sales floor, which will increase the level of customer confidence in the quality of the product and will facilitate shopping;

5) to encourage visitors to make purchases in bad weather conditions (for example, during summer heat, rain or severe frosts in winter), you can offer customers a discount on goods of the same name - a discount on the weather. This will increase customer interest in the store during adverse weather conditions and avoid forced downtime;

7) if the solvency of customers decreases at the end of the month or after holidays, you can set discounts in the store for a short period, for example, for the last 3-5 days of each month. A buyer who is unable to purchase an item at full price is more likely to make a purchase if the price is reduced.

Special attention is given to the recommendation to move the people counter from the current level of 140 cm to a height of 160 cm. This will reduce the number of counter activations on objects that are not store visitors (baby strollers, grocery carts, as well as on children who are not independent shoppers). are). By excluding such “visitors” from the general incoming flow, you can find out the real (reliable) rather than artificially low conversion rate.

The recommendation to place the visitor counter at 160 cm is not accidental - it is based on data on the average height of women in Russia (men are usually taller than women, so their height does not affect the location of the counter). According to medical reference book, a woman is considered to be of average height if she is between 160 and 170 cm tall. The lower limit of the specified range can be taken as the recommended height for the location of the people counter at the entrance of the store.

In addition, in order for the conversion rate to be calculated correctly (that is, to provide reliable information), it is necessary to exclude from the entire flow entering the store the service personnel who visit the store for official needs, for example, cash collectors who collect the store’s proceeds, garbage collectors, cleaning service workers and employees the store itself, leaving workplace during the day. To do this, it is recommended to prohibit personnel from using entrance group store, allowing entry and exit of the store through the technical exit.

Compliance with the recommendations proposed in the article will allow the children's goods store to calculate the conversion rate, which will reliably show how many store visitors have turned into its customers, and will also help increase its level.

Recommendations for calculating a reliable conversion rate and increasing its value developed for a children's goods store are also relevant for other retail organizations that have similar operating conditions.

REFERENCES:

1. Aleshnikova L. Methods of working with visitors and increasing conversion // Marketing. – 2014. – No. 6 (164).
2. Romanova O.N. The influence of the conversion rate on the performance of the director of a retail chain trade enterprise // Society and economic thought in the 21st century: ways of development and innovation, materials of the II International scientific-practical conference. – 2014. – P. 83-89.
3. Tsibanova N.N. Efficiency ratios of fashion retail stores // Young scientist. – 2015. – No. 2 (82). – pp. 344-349.
4. Romanenko E.V. The influence of conversion on the efficiency of an online store // Innovative science. – 2016. – No. 6-1. – pp. 212-214.
5. Medical reference book. Access mode: http://med-tutorial.ru.