Where the Rubber Meets the Roads: Conversion Rates for Startups

The goal of any business is to have a good conversion rate. It doesn’t matter if you are the oldest business in your state or today is the first day of your operations, having the best possible conversion rate is everyone’s goal. After all, it gives you an outstanding metric to help track your business, seeing where things are measuring up. Additionally, when busy and slack seasons arrive, it helps you to further understand what is going on in a full capacity.

To be clear, the way that this article is defining conversion rate is the number of sales divided by the number of customer interactions (or engagements). While conversion rates are easily understood, the challenge behind them is properly understanding several key elements, especially for the start up business trying to get going. These areas are as follows:

Time: One of the biggest issues with conversions and a startup business is the time needed for things to be successful. As the adage goes, Rome was not built overnight. Even if you get a lot of interest initially, that sudden burst will die away. Getting a solid understanding of your conversion rate, therefore, might take at a minimum a year. Most likely, it will be closer to 3 to 5 years to get an accurate feel for your business, depending upon your industry (B2B models will likely take much less time, especially if they have only a few customers that they service.

Pre conversion Efforts: The problem with our conversion rate is that it doesn’t take into account the amount of work needed to get engagements or customer interactions. Usually, you have to do a lot of work at this stage before you even begin to see interactions. It can be very slow initially, but the more effort you put into pre conversion work such as marketing and networking, the sooner you will understand your conversion rate.

Needed Investments: While not fun to hear, a lot of work that founders do initially really is an investment. There will eventually be a return seen on it, but at the outset, items that would be used in marketing need to be invested in initially with little immediate chance of a return. However, viewing things in the long term will likely yield results sooner than you expected.

Therefore, don’t be discouraged initially if things are going slowly with conversions, or it seems like your conversion rate is not nearly what it needs to be. Simply keep your focus on letting things take their time, ramping up as much as possible the pre conversion work, as well as invest where needed. You might not see returns immediately, but over time, they will begin to appear.

What should also become apparent (in addition to the emphasis on investments toward the future) is that your conversion rate truly is a numbers game. The more interactions that you have with potential customers, the more likely you are to get a conversion. The only way that this can happen; then, is to find ways to ramp up your pre conversion efforts. Find ways to grow your marketing strategy here. If you know the demographic that you are trying to attract, study their preferences when it comes to social media (while there are many platforms, consider that Linkedin is definitely the ideal platform for promotion of business services and developing a professional network. Conversely, Facebook is the most established platform, while Gen Z is definitely a fan of Tik Tok.)

Additionally, communication preferences can factor heavily. Email is still used (especially effective in transmitting large amounts of material). However, texting is becoming much more popular among older generations (it was already a preferred choice by young people as well.) Phone calls do have their place, but this tends to be reserved for older generations that prefer to talk over the phone (as opposed to electronically).

To sum up, it takes a lot of work to help things get going properly so you can accurately assess your conversion rate. Teaching information here is crucial, but analyzing it too soon will be as helpful as taking the election returns during the first hour too seriously. There is a great deal of vote that still needs to come in before you can properly make a call in a political race. Therefore, keep careful track of your conversion rate data, waiting until you sense that you have enough to start making sense of your conversion rate.