There are many steps a small business can take to improve cash flow and convert more leads, many of which we outline here, here and here. Of course, one of the most obvious measures is to increase sales. But what if you’re doing everything right when it comes to getting new leads for your business, only to convert a small percentage of those prospects into paying customers?
Whether you run an online, freelance, retail or service business the process of converting leads into sales, and sales into cash is essentially the same. Here are seven ways to boost cash flow by improving your lead to sales conversion rate.
1. Make Conversion a Part of Your Marketing Plan
Most businesses have an idea about how they’ll go about attracting new customers (events, flyers, brochures, compelling calls to action, etc.), but it’s also equally important to have a clear strategy for what you’re going to do with those customers once there in the sales funnel. This will vary by your business but should address each phase of the conversion process. Think about what tools your sales team needs, it might include case studies, customer testimonials, a product demo, addressing objections, pricing incentives, and so on.
Build a marketing plan that accounts for each stage of the conversion cycle and the sales and marketing resources that will support each step. Don’t forget to allocate budget to these items as you plan your big picture marketing for the year.
(See below for more tips on how to structure your sales funnel and populate it with the right marketing touch points).
2. Target, Target, Target
Being specific about the target audience you are trying to reach and then talking to them in their language should carry across all your sales and marketing plans and communications. Many small businesses worry about narrowing their target for fear that there simply won’t be enough customers to go after. But having a huge sphere of potential customers with different wants and needs to go after wastes time and money, yes you’ll make some money, but your ROI will take a hit.
To find your ideal customer, start by identifying 5-10 descriptive terms that paint a picture of that person or business. Dig specifically into the characteristics that define that person or business. Look for patterns and usual suspects and ignore the exceptions. Apply what you learn everything that you do or sell. If you need to change your product or service messaging, do it. The goal is to give your target marketing exactly what they’re looking for.
3. Talk in Way that Connects with Your Prospects
Identifying your ideal customer can help you focus your marketing activities where you’re going to get the biggest reward, but defining your ideal customer is only half of getting started. You’ll also need to talk about your business in a way that’s going to make this customer want to do business with you.
Work on communicating succinctly what you do, what problem you solve, how your business is different, and how your customer’s life will be different after doing business with you.
4. Send Prospects to Offer-Based Landing Pages
If you’re doing any outbound marketing with a specific call to action, don’t send prospects to your home page. Instead, create a dedicated landing page that features images and content that’s relevant to your target market and to the offer you’re promoting. For example, if you’re marketing your product or service to a particular industry segment, send interested prospects to a page that talks to their industry needs and challenges and entices them with an offer, rather than sending them to your homepage and having them navigate around from there in a quest to find information that’s relevant to them.
5. Warm Your Leads with the Sales Funnel
Are you asking for a sale too fast? If you’re selling a complex or expensive product, setting up a sales funnel can help build trust, nurture a relationship and win the customer over with your exemplary product and/or expertise. A basic funnel goes through three key stages: 1) awareness (the point at which the customer first interacts with you), 2) interest, and 3) sale.
This is where the marketing plan that we discussed in tip #1 above comes in handy. With a some strategic planning and timely execution, leads can be progressed from cool to warm to hot.
For example, a customer who is interested in purchasing a home alarm system can be nurtured through the sales funnel by marrying your sales and marketing efforts to educate and engage them through the following stages:
- Offer home safety tips via your blog, videos, cheat sheets. Explain how your product can help and why you’re different.
- Encourage them to sign up for to your email list (with the promise of good info)
- Have a PR strategy that gets you media coverage and third-party reviews
- Create a tailored email campaign that sends interesting content (videos, testimonials, etc.) in a staggered fashion to new email sign-ups. (Tip: Now that the prospect is in the funnel you know more about them, make sure your messaging reflects that)
- Email them an incentive to sign-up for your product now.
- Follow up with a sales call
The point here is that you’re offering value before you’ve even made a sale. By slowly guiding your prospect through the sales funnel you’ll earn trust and develop a deeper relationship, ultimately improving your conversions.
6. Test, Test, Test
Testing is something that should be happening throughout the conversion process, starting with your calls to action. How you test is up to you. It could be as simple as tracking how many users clicked a unique URL associated with a marketing campaign. Alternatively, you can get into A/B testing using software that tests the effectiveness of alternative versions of web landing pages based on headlines, images, the offer, layout, etc.
There’s no silver bullet, and learning about what works and what doesn’t involve a long-term commitment to testing everything.
You also want to take a look at trends in your conversion funnel. When are prospects dropping out? Is your conversion process too long or complex?
7. Focus on Your Best Prospects First
This is something that applies whether you’re a freelancer or a multi-national company, and will not only help your conversion rate, but bring in cash sooner. Most businesses can typically gauge from previous experience what a good prospect looks like. Score your prospects and focus first on those who have the potential to convert first.
What strategies have helped improve your lead conversion rates?
