A sales funnel (also known as a “customer acquisition process”) is the series of steps a business has in place to convert leads or prospects into clients. From small companies to the mega-corporations of the world, all successful businesses utilise them.

Traffic + Conversions = Sales

The real challenge is that the amount of money invested in generating the traffic compared to gross profit will need to be lower. You cannot invest £200 on advertisement and generate 150£ sales with a loss of £50.

The most important number that you need to understand “Average Visitor Value” for your website. Average visitor value tells you how efficiently your website is converting traffic to sales.

This is calculated as below for a particular sales day:

  1. Number of Sales e.g. 10 units
  2. Times the value of transaction = £100
  3. Total Revenue: 100 x 10=£1000
  4. Divided by unique visitors: 1000
  5. Your Average Visitor Value: 1000/100 = £1/visitor

This means that the average value of every visitor you got that day to your website was £1 to your business. This number is more important to your business than any other. If you don’t know this, you can risk investing more than your expected average customer value and hit the bottom.

The following help:

  1. Having high-value items that pay more. The customer conversion will be low but per conversion value will be higher.
  2. Have back end product mix that you can upsell to an existing customer. This increases the conversion value per customer as to get the next sale you won’t need advertisement but just a follow up meaning an investment of time rather money.

Further read: http://nectafy.com/calculate-value-website-visitors/

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