No matter how well your service business is doing, if you want long-term stability and/or growth, you likely ask yourself “How can I generate more leads and customers?”
There are two ways you can generate more leads and customers:
Both strategies work, but one will provide a much better return on investment.
In this post I’ll show you why optimizing your conversion rate is one of the smartest marketing investments you can make. For context and simplicity, we’ll focus on how this applies to your website. However, the concepts apply to any marketing channel you use.
Before we dive into the details, it’s important that we define what a conversion is. We all need to be on the same page for this to make sense.
A conversion occurs when a consumer performs an action that is meaningful to your business. This could be someone calling you, submitting a form on your website, subscribing to your email list, downloading a document on your website, or purchasing one of your services.
From the perspective of a service business, a conversion typically means a consumer has converted into a lead or customer. A lead is someone you have the ability to follow up with and a customer is someone who has purchased something from you.
Now that we all agree on what a conversion is, let’s dive into the details…
Let’s say your current marketing investment generates 1,000 website visitors per month. Of those 1,000 visitors, 25 convert into a lead or customer. This would mean you have a conversion rate of 2.5% (25 leads and/or customers divided by 1,000 visitors equals 0.025).
Now let’s assume that you invested $1,000 to get those 1,000 visitors to your website. Your cost per visitor would be $1 ($1,000 invested divided by 1,000 visitors equals $1 per visitor)
Your cost per conversion would be $40 ($1,000 invested divided by 25 conversions equals $40 per conversion).
Assuming the above numbers are what you achieve on average every month, you can extrapolate what you would need to do to generate more leads and customers by bringing more people to your website.
If you want to double the number of leads and customers you generate each month, you’d need to invest $2,000 per month which would generate 2,000 visitors and result in 50 conversions. Your cost per conversion of $40 and your conversion rate of $2.5% would remain the same.
While this example is simplistic in nature, it is applicable. If you take the time to understand your business’s numbers, over an extended period of time, such as twelve months, you can apply the above to your business with a high degree of accuracy.
This approach to generating more leads and customers works. However, you can see it requires a larger investment. An investment you need to commit to over a longer period of time.
But, there’s a better way to generate more leads and customers…
Let’s continue with our example from above. But instead of trying to get more visitors, you’ll focus on trying to convert more of the visitors you already have.
You have 1,000 visitors coming to your website each month, with a conversion rate of 2.5%, which equates to 25 conversions - leads and customers. If you can increase your conversion rate to 5%, that would result in 50 conversions.
So, how does this higher conversion rate affect your other numbers. Well, your cost per visitor would still be $1 ($1,000 invested divided by 1,000 visitors equals $1 per visitor). However, your cost per conversion would be cut in half. It would go from $40 to $20 ($1,000 invested divided by 50 conversions equals $20 per conversion). This is a step in the right direction.
While the above scenario makes sense on paper, you’re probably asking yourself how you apply it in practice.
Ask yourself this question, “if I have 1,000 people visiting my business why are only 25 of them converting into a lead or customer”?
To make better sense of the above question, put yourself in the consumers shoes. Ask yourself why you convert into a lead or customer when you want or need the service of another business.
Ultimately, the answer comes down to consumer experience. The better consumer experience you provide, the more leads and customers you’ll generate.
In a nutshell, a great consumer experience makes it easy for a consumer to find the information they are looking for, addresses the consumer’s fears and hesitations by building trust, and makes it easy for the consumer to take action.
So, if you want to increase your conversion rate, you need to provide a better consumer experience. This is achieved by optimizing every engagement point you have with a consumer.
In the context of this post, that means optimizing your website. By optimizing your website to provide a better consumer experience, you’ll improve your conversion rate and ultimately the number of leads and customers you generate.
But optimizing your website has another benefit. When you optimize your website to provide consumers with a better experience you also improve your ability to rank higher in search engines.
When done properly, providing a great user experience also addresses a number search engine optimization best practices. So, by optimizing your website, you have a good chance of increasing the number of visitors to your website without the additional marketing investment required in our first scenario.
It should be said, another reason your conversion rate may be low, is because you are not attracting the right people - people that want or need the services you offer. If this is the case, you need to rethink how you are marketing your business. This problem is beyond the scope of this post. A quick search on Amazon and you’ll find numerous books that address this problem.
As you can see from the examples above, whether you double the number of visitors to your business or double your conversion rate, you’ll end up with twice the conversions - leads and customers. However, aiming to double your conversion rate is the smarter choice as it results in a lower cost per acquisition, and generally requires a smaller investment.
So, if you want to generate more leads and customers for your service business, start optimizing your website to provide a better consumer experience.
With all this talk of conversions and conversion rates, the thought must have crossed your mind - what is a good conversion rate?
According to a conversion rate study that was done in 2014 and last updated in 2020, the average landing page conversion rate across all industries was 2.35%. The top 25% had a conversion rate of 5.31% or higher, while the top 10% had conversion rates of 11.45% or higher.
It’s important to remember that conversion rates do fluctuate by industry. For example - if you provide emergency services such as plumbing, you are likely to have a conversion rate higher than a custom home builder. That’s because a leaky pipe in your home needs to get fixed as quickly as possible. Building a home is not an emergency and requires careful consideration due to the larger investment required.
From our experience, aiming for a conversion rate of 10% or greater, is more attainable than you may think. Customers that follow our website optimization recommendations have an average conversion rate of 20%. This includes businesses across all kinds of service industries and only accounts for unique leads and customers (unlike other companies, we do not pad our numbers with repeat leads and customers).
Regardless of what industry you are in, you should aim for a 10% conversion rate, minimum. That means for every 10 people that visit your website, one of them becomes a lead or customer. This may sound like a tall order, but odds are you can do even better than that.
You know know that optimizing your website, so you can improve your conversion rate, is one of the smartest marketing investments you can make. You’re now probably wondering how you do it.
Well, you’re in the right place. We’re all about helping service businesses optimize their websites so they can win more leads and customers. We share a lot of our website optimization tips and tricks for free, so visit our website often. Better yet, subscribe to our blog so you can stay ahead of your competition.
If you want quick insights into how you can optimize your website, request a website strategy session. In 30 minutes, we’ll show you how you can optimize your website. The best part - it’s free.
What does it mean to be a small business in Canada? You may be surprised! Let's define it and dig into the numbers for insights.
Stop wasting time and money on marketing that doesn't work. Discover the proven 6-step digital marketing strategy service businesses are using to generate more leads and win new customers.