Why a high sales conversion rate isn’t always a good thing

I’ve been there myself when I used to take pride in the fact that I could land 4 out of 5 prospects after a sales meeting and turn them into clients. Over the years I’ve realised that this wasn’t necessarily a good thing and the high conversion was due to our prices being below the market average.

Claim your FREE strategy meeting by watching our webinar :

when I’m talking about conversion rates, what I’m talking about is how many people that are interested in buying. So let’s say five people are interested in buying your product, how many of them actually go through to actually buying your product? As you all know, not everyone that’s interested in what you’ve got to sell actually ends up buying what you’ve got, so what you’ve then got is a conversion rate. So maybe if five people are interested in buying what you’re selling and only 3% go on to buy it, then you’ve got a conversion rate of 60%.

The reason I want to do this video is, and I’m guilty of it myself, but I see lots and lots of business owners over of the years who are really proud of their conversion rates and business. Obviously, if they’re doing it for the right reasons, then they should be proud, but what I’ve also seen is when things are going well with the sales conversion rate, as in you’re talking to five people and all five people end up buying your product, then people tend not to question it too much. And that can lead to a really big pitfall, because when you’ve got five people and you have that meeting with those five people and all five people want to buy from you, what that means is one of two things.

Firstly, your marketing is absolutely amazing, so you’ve got the touch points in your funnel absolutely right, and by the time people even get to talking to you, they’re ready to buy straight away. But it could also mean something else. The other thing it could mean is you are way too cheap in terms of what you are selling. It may be that these people have looked around everywhere, found that your competitors, if you have competitors, one of my other videos talks about why you shouldn’t have competitors, but if there are similar businesses and they are selling something that the client perceives, the prospect perceives to be similar and for £1,000, and they come to you and you’re selling that for £500, then they are just going to bite your hand off to get it.

Those are the two main factors around a high conversion rate, and one of those factors can be really, really good, but the other factor can be really, really bad, because it means your margins are completely eroded and it means that you can’t really grow and scale your business because you don’t have the cash to do it. So the real takeaway point from this video I want people to have is that if you’re doing really, really well in the sales and you’re getting all those prospects over the line into becoming clients, it’s still worth questioning if you’re doing it the very best way you can, and whether it is because you’ve got a great marketing infrastructure and offering, or if it’s because you are too cheap. Sometimes it can be a bit of both, but the key thing is always question it, and in general, don’t just question the bad stuff in your business. Question the good stuff as well. Is this aligned to our overall objective? Is it happening for the right reasons?

What I’d really like to tell you about is we’ve got a webinar that we’ve released. It’s how to create an exit strategy that will maximize your business’ sale value. So if you’re interested in finding out a bit more about our webinar, which you can access below.

Scroll to Top

Free online training for small business owners

How to Create an Exit Strategy...

This session will cover:
  • The THREE things stopping you from scaling your business
  • The ONE thing you MUST do if you’re serious about exiting on a high
  • The tried and tested model you must implement NOW to lock down a high-value business sale later

Free online training for small business owners

How to Create an Exit Strategy...

This session will cover:

  • The THREE things stopping you from scaling your business
  • The ONE thing you MUST do if you’re serious about exiting on a high
  • The tried and tested model you must implement NOW to lock down a high-value business sale later

Search a topic or subject