Increasing Conversion Rate vs. Profitability Rate

There has been much talk over the last several years about conversion and how to increase the conversion rate. But I think that we are losing sight of one very important factor – profit.

The first question that I ask is, “Are we making money with the transaction?”

• Are we making money? This is a Yes or No.
• If so how much?

The second question is, “Can we spend less to make the transaction?”

• Can we be more profitable? This is a Yes or No.
• If yes, where can we decrease costs?

The third question is, “Can we do more of these transactions faster?”

• Can we speed up the transactional velocity? This is the leverage of marketing.
• Can we find more of these people who want this product or service?

Maximum Profitability Rate – The speed at which you are making maximum profits.

Profitability Rate is made up of three components:

1. Product and delivery costs (minimize)
2. Promotional costs (minimize)
3. Conversion rate (maximize)
4. Speed Of Transactions (maximize)

I am seeing that people are skipping the first two steps and running to the marketing step – trying to make dollars before they have made a dime.

Marketing gets the word out about your product or service. But if the product is not selling, what good is it to get the word out.

The answer to increasing profits is not always a blanket more traffic and more eyeballs.

Check this out: www.davidbullock.com/toolbox. It is a talk that I did that speaks to profit channels and setting up your business to be profitable from the very beginning.

– David Bullock