We have all heard the comparison that your website should act like a sales person who works for you 24 hours a day 7 days a week. But how many website visits does it actually take to generate just one new customer for your business? In order to answer this question there are 3 key metrics you need to know and understand.
Close rate is the percentage of opportunities your company successfully turns into customers over any given period of time. There is no set number which this has to be, you take a coffee chain like Starbucks as an example and their close rate may be 99%, in other words 99% of people who walk through the door proceed all the way through to a purchase. Perhaps you are a large construction contractor which lands 10% of the projects your company bids on. You can figure out your companies close rate by looking at your last 10 to 100 opportunities and calculating your win percentage. If you had 3 new customers from your last 10 opportunities your close rate is 30%.
Unless you are an e-commerce business your website is most likely not solely responsible for your close rate, you most likely have a sales process which takes leads or prospects and turns them into opportunities. The next two metrics we need to calculate are based on this process.
SQL Conversion Rate
A Sales Qualified Lead is a person who is ready to make a purchase decision and has requested a quote, product demonstration, sales information, or a meeting to discuss their opportunity with you. SQL Conversion's can be calculated by taking the number leads you generate and dividing it by the number of meetings, quotes, demo's, or deal opportunities you generated from those leads.
For example, if your sales team was given 250 leads to reach out to and 50 of them turned into sales opportunities (a.k.a deals), then your SQL conversion rate is 20%. Without using a CRM this is a difficult metric for you to measure. A CRM will help you calculate this number by showing you the effectiveness of your sales process with activity and deal reporting.
The question we opened this article with was "how many website visitors do you need to generate a customer?". The final metric required to figure out this number is your visitor to lead conversion rate. In other words how many people who visited your website over any given period of time filled out a contact form, downloaded a piece of content, engaged in a live chat, or called you for more information?
The answer is probably "not very many" some of the best websites in the world only convert 2-5% of their visitors into leads. So for every 100 visitors you have on your website only 2 to 5 will turn into leads for your sales team.
You can find your lead conversion percentage by looking at your Google Analytics or website traffic report in your CRM, and dividing it by the number of leads generated over the same period of time.
Let's say your goal is to work with 200 new customers within one year (average of 17/month). Your current close rate is 35%, then you’ll need to generate approximately 50 SQL's per month for your sales team. If a “guesstimated” 20% of your leads move all the way through the buyer funnel to opportunity, you’ll need to generate 250 leads per month. At 3% visitor to lead conversion rate, you’ll need to generate 8,300 visitors per month to create 17 new customers per month for your business.
Knowing these metrics is beneficial for your business budgeting as well as managing expectations. If your website only getting 100 visitors per month it would be unrealistic to expect it to generate any sales for your business. However, if your website is generating thousands of visits per month but is not converting them into leads or customers, then the problem is likely in one of these 3 key metrics.
Growth-Driven Website Design can help you generate more website traffic and convert visitors to leads. CRM technology can help your sales team turn more of those leads into customers. Larmahil offers solutions for both of these problems.