This transcript was generated from the episode audio and may contain minor errors.
A listener has heard that increasing your conversion rate, which is the percentage of people who see your offer and buy it, is more important than finding new customers. But how do you do it? Well, this is a good time for a reminder. There are only three ways to make more money from your business. If you're starting a side hustle, a little small business, whatever it is, you've only got three ways to make money from it.
You can, first of all, acquire more customers. So if you've got a few customers, you're like, "Where can I find more?" That's how most people tend to think. Number two, you can sell more to existing customers. So you can either raise your price or sell more products, provide more services, etc. Or number three, you can increase the conversion rate.
Again, the number of people, the percentage of people who see your offer and buy it. So in the long run, you'd like to do all three of these. But most inexperienced business owners and side hustlers focus mostly on the first one. All they think about is where can I get new customers. But conversion is extremely important.
We're going to talk about it in this listener question today. But here's a quick example. If you have 100 people who see your offer, and one of them, one of every 100, if you have 100 people coming to your website every day, let's say, one of them signs up for purchases, that's a 1% conversion rate, which in some industries is not bad. Now, you could focus on finding 200 people to see your offer, or you could work on trying to increase that conversion rate, perhaps to 2% or higher. And of course, if you could do that, well, the same number of people are coming to your site or otherwise seeing your offer, but you're converting twice as many, or whatever the number is.
So conversion rate is very, very important. What are some ways we can actually tweak it or improve it? Let's talk about it after this quick message from our sponsor. Thank you, sponsor. Hey, Chris, this is Jahim.
I started listening to the show since last year. I've heard you say that increasing your conversion rate is more important than finding new customers. That makes sense, but how do we do it? What are some ways other small businesses have been able to improve in this area? I've heard about A/B testing, for example, but it sounds complicated and more like something a big company would do.
If you have any other ideas, I would love to hear those too. Thanks, Chris. Jahim, what's good, man? Thank you so much for listening, and you're totally right. Conversion is the way to go, and you're actually on the right track with A/B testing.
So let's talk about this. A/B testing, also known as split testing, it's not only for big companies. And for anybody who's not familiar with this, A/B testing is when there are two versions or multiple versions of a website or anything else that you interact with online. And you only get to see one of those versions when you're a consumer. But the business is actually seeing how different people respond to different copy or different design or some element.
And over time, they kind of add these things up and say, "Okay, well, version A is better than version B or vice versa." And then you start testing another variable. And yes, it can be very sophisticated. So that's why some people think, "Well, this is only for big businesses." Some businesses are constantly testing dozens of variables and adjusting in real time and such. But the reality is a lot of big increases in conversion rate are not going to come from these tiny changes in all the dozens of variables. They're going to come from a couple of key things.
And so if you have a website, if you use Google Analytics, which I usually encourage people to do, it's free. You can put a tag on your website, and Google allows you to do a certain number of experiments where you have two different versions of the site. WordPress, if you're using that, also has free or low-cost plugins. So just search WordPress split testing, WordPress AB testing. If you use Shopify, they also have a way to do that.
So basically, wherever your website is hosted, look and see if there is an easy solution for it. If there's not, you don't want to try something else just because they are so common now. And then once you get going, you should always be testing something. As I said, test the big things. Big things are headlines, other messaging, pricing in particular.
Like I've seen more than once that increasing the price doesn't actually cause conversion to go down sometimes. So then you make more money on every sale. In some cases, it may actually go up. Like a higher price can conveys more confidence to buyers, depending on the product and such. So that's the most important thing that I would start with, delving into that world a little bit.
A couple of other small things, ask for referrals. People are referred to your business, like there's this built-in trust element compared to just somebody who stumbles upon it cold. Display testimonials and reviews also builds confidence, shows social proof, perhaps add a guarantee if you don't have one. And that depends on the kind of business, of course. I usually say have a really bold guarantee, like a really strong guarantee or none at all.
But these are just a couple of tips. I think overall just exploring that world of A/B testing is going to be good. For Jaheim and anybody else in that situation of I've got a business, like how do I actually increase my sales? Do I just go out and find new customers? Or is there something else I can do?
The something else you can do is explore how to increase your conversion rate. I hope that is helpful. Listeners, if you've got a question of your own, sidehustleschool.com/questions. Thank you so much. New episode every day.
Subscribe wherever you get your podcasts. My name is Chris Guillebeau. This is Side Hustle School. from The Onward Project.
