Improve Your Conversion Rate with a Manufacturing Approach

Conversion Rate with a Manufacturing ApproachWhen we hear words like “continuous improvement” and “reducing defects,” we typically think of a manufacturing operation. However, ecommerce merchants can take the same approach and apply manufacturing concepts to ecommerce conversion-rate improvement.

Valuing Visitor Actions
Every action by a visitor to your website has a certain value. A sale is value-based on the average revenue or gross profit; a lead is valued-based on percentages that convert over time. For example, assume a close ratio — also called a “conversion rate” — on a website is 1 percent and it is equal to $100,000 of value, from a marketing spend of $20,000. If we can increase the close ratio to 2 percent, we will get — for the same marketing spend — $200,000 worth of value. If we increased sales without improving conversion then we would have likely had to increase marketing expense, which would have decreased or destroyed profitability. But using close-ratio improvement allows us to grow sales without increasing expenses, which allows the company to now invest in many other aspects that create additional growth.
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