Insights From Conversion Rates During Growing Pains

One of the best questions that should be asked when trying to understand why a company is doing things that are not working is why. At the end of the day, while there can be a good bit of confusion and a lack of clarity about what is causing the problem, things boil down to the simple reality that there is a misalignment with the organization somewhere, and that some form of adjustment is required. The why question can be especially helpful on this point, since you are trying to find the story behind the misalignment. Other questions might help, but here, you are attempting to hit the heart of the matter.

Why is the conversion rate not working properly? In a situation like what you are currently facing with a company going through growing pains, there is a very good chance that on paper, everything is fine. In fact, there is a distinct possibility that it is actually performing better than usual. With all of the existing data, such a reality seems to be defying explanation. How could a company that is in the beginning of a crisis (or even the middle of one) have a conversion rate that is either hitting the required benchmark or even overperforming?

Recall the misalignment from the first paragraph. If the company is performing well or even overperforming, is the company prepared to handle that volume from an organizational (or even personnel) perspective? The conversion rate might be generating a volume that is more suited for a staff that is twice the size, therefore causing people to be overworked and the result is a drain on efficiency.

Conversely, an underperforming conversion rate likely means that something has shifted with the business model. Either an insufficient amount of resources is being allocated, or channels that had previously been effective are now no longer functional. An excellent example of this can be found in issues with polling. Up until the early 2000s, much of what was in use for polling depended upon landlines, and when compared to election results, in many cases it was extremely accurate. However, as the 21st century has progressed, polling has tended to be less accurate. This is because as landlines have disappeared, pollsters have had to adjust their methodologies. Most likely, as the 21st century progresses, pollsters will eventually figure out how to adjust with the changes in communication preferences, but right now, it is clear that things are not quite there yet.

While not a perfect analogy, the pollsters' issues with determining sample size, etc., has caused challenges that are obvious for all to see. The takeaway from this should focus on the fact that a shift away from landlines had a sizable impact that has skewed results rather substantially. When it comes to business, this same reality could be happening. A channel that had once been successful has now, for one reason or another, shifted substantially, and the result now is a substantial decrease.

Either way, both situations are best diagnosed with the “why” question. This is because if you ask it in either situation, you will begin to see the story unfold in front of your eyes. Most likely, it has taken time to get to this point, and understanding all of the issues requires patience and a thorough approach. Once all of this has been ascertained, ask yourself: “What needs to be done in order to realign everything properly?” If you have been through in answering the “why” question, the “what” will be substantially easier and much more straightforward to answer. One final caveat here: be prepared for some minor adjustments along the way. Once you have identified the needed changes, most likely, you will need to go back and add some tweaks here and there. 

When going through growing pains as a business, there are usually quite a few things that could be going wrong (hence why this stage can be tricky). When it relates to the conversion rate your business has, there is very likely a story it can tell in where and what the growing pains are, and who is facing the brunt of the issues. If you simply sit back and ask why and let the story unfold in front of you, the most likely scenario is that you will get a clear picture of what is going on so that you can determine what needs to be done to fix it.