Conversion Rates and Transactional Velocity
In Business profit is not king. Speed is.
The key for online success is not profit margins.
I argue that it is transactional velocity. The idea is simple. Make sales first and increase the profits as you continue to engage the prospect.
Get the sales moving.
Once you have achieved conversions to sales. It is easy to increase the profit margins on the sales themselves.
It is transactional velocity which is more difficult to achieve.
Get the sale and then you have room to move. No sale means no chance at all of profit.
The only way to increase sales is to increase traffic and conversion rate. Those are your only two levers in the equation.
The more powerful lever or pivot point is to increase the conversion rate.
The audio below was an observation that I made while shopping last Saturday and it completely changed the way that I look at leverage and profitability.
Best Regards,
David Bullock
The key for online success is not profit margins.
I argue that it is transactional velocity. The idea is simple. Make sales first and increase the profits as you continue to engage the prospect.
Get the sales moving.
Once you have achieved conversions to sales. It is easy to increase the profit margins on the sales themselves.
It is transactional velocity which is more difficult to achieve.
Get the sale and then you have room to move. No sale means no chance at all of profit.
The only way to increase sales is to increase traffic and conversion rate. Those are your only two levers in the equation.
The more powerful lever or pivot point is to increase the conversion rate.
The audio below was an observation that I made while shopping last Saturday and it completely changed the way that I look at leverage and profitability.
Best Regards,
David Bullock
posted by David Bullock at Sunday, July 30, 2006
2 Comments:
Hi David, brilliant and spot-on as usual!
Thanks for relaying the Walmart example, defining transactional velocity, and inspiring me to dig deeper into my situation to realize what my TV is and to better it.
Thanks once again!
Cheers!
Thanks Sherman.....I am glad that you are finding this information helpful.
Take Care,
David B.
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