Defining Conversions for Small Businesses

When people are starting a small business, they very often do so with a solid understanding of the area or niche that they are entering into business in. This means that their product or service is something that they are going to understand very well. They will be able to create a high quality product, or offer an excellent service in their area of expertise. What they may lack however, is a deeper understanding of the concepts of business itself. That is why learning a few marketing tips for small business owners is something that is certainly advised for small business owners that don't have a background in business.



One of the things that small business owners need to understand is the whole notion of conversions. Conversions and, specifically, the conversion rate of a business are very important concepts for tracking and monitoring the success that a business is having in their sales and marketing campaigns. There are many different metrics and statistics that companies can use to determine how effective their marketing is being, but of all of these, that of conversions may be the most telling statistic of all.

A conversion is what business people call it when a lead becomes a sale. Essentially, a lead is any person that you have contacted, or who has contacted you in some way about your service. This could include someone that visits your website, your store, who you cold call, or who calls you for any information about your services. If you manage to take that lead and turn it into a sale, you know that you've made a "conversion".

The "conversion rate" then, becomes the percentage of the leads which you receive which are turning into sales. This is frequently used to assess the effectiveness of a marketing campaign, such as an email campaign that you send out to your subscribers. For example, if you sent an email to 1000 subscribers and made 20 sales, you would have a 2% conversion rate. If you then made changes to your email template, font, and copy writing, and then sent the message to another group of 1000 and instead made a conversion of 3%, you would know that the second email was the more effective.

This is why using the notion of conversions can be very helpful to a business. They can use this to help assess each of their marketing elements in turn. Changing marketing constantly in order to improve it and get better results is an important part of growing a business. Using the notion of the conversions you make on traffic that visits a websites is also an important way for small businesses to improve their results. There are many different things that you can change about a website over time. By using an analytics program to track the traffic that is coming to your website and making note of any changes that you see in the conversion rates that you are achieving, you can eventually come to what is going to be the most effective iteration of your website.