The Conversion Equation

Everyone is looking for a secret equation, secret formula, the secret sauce, the Holy Grail in marketing, especially social media and digital marketing.

Hint:  There is NO secret formula!  There are some rules; however.  There are a few formulas you can follow to increase your probability of success.

Sales and conversion are psychological concepts.  The question of “how can I retain, convert, and ultimately generate sales from a prospect or customer is a soft science.  Psychology is a soft science.  Psychology doesn’t work the same way as physics or engineering, where 1 + 1 always equals 2 or the diameter of a circle is always the diameter times Pi.

Psychology uses terms like probability and graphs like a bell curve to determine the probable outcome of a given set of psychological data.  Retention, conversion, and sales are all part of this soft science probability.


Teaching these concepts to executives from around the globe has forced me to become more introspective and has intrigued me to find a more definitive answer to the conversion equation.  Defining “conversion” as only a soft science probability equation, I felt was a cop-op.  So I decided to take a more serious look at what I did know about the subject and what could be argued as mathematics or probability.

The difficulty of developing an equation for conversion is that while a specific set of data, examples, and numbers may be true for this company, the outcome of the equation for a different company can vary wildly.  And using the exact same equation and data within the same company for a different product, has a different outcome entirely.  And… often using the same equation and same data that has proven successful in the past for the same company and the same product has different results when executed a second or third time.

We’ve even seen results where only a very slight change in the data can generate disastrous outcomes such as the Starbuck’s Christmas Coffee Cup “Controversy” or the New Coke / Classic Coke disaster.

Starbuck’s 2014 Christmas Cups – A Big Hit

Starbuck’s 2015 Christmas Cups – A PR Nightmare

New Coke versus Classic Coke of 1985

The problem with determining an exact equation for “what works” is that we are dealing with human perception.  What makes someone buy your product versus a competitors product or why someone opens your April email, but opts out of your May email is all about perception.  And, as we all know this is a huge variable.

Everyone has different perceptions based on values, morays, education, culture, religious beliefs, economic status, sex, age, and how they view the world on any particular day.

After studying what I did know to be true about sales, conversion, value, frequency, and revenue did lead me to a secret formula.  Here is is:

Whereas R equals Retention, v = Value, f = Frequency and C = Conversion or Sales.

When I teach advanced digital marketing, I simplify the process by saying, social media gives you a platform which allows you to interact and gain access to a huge number of prospects, e.g.: Facebook with 1,550,000,000 members, LinkedIn at 396,000 members, or Twitter with 307,000,000 members.  And that, this access gives us as marketers the opportunity to build relationships with prospects, because relationships lead to trust, trust leads to sales.

There are two primary truths here; one is that you don’t buy a product or service from a company or salesperson you don’t trust and the other is, not everyone is ready to purchase your product or service, today.  As a result, we must keep our name, logo, and brand in front of our prospects so when they are ready to purchase, they think of you first.  This is the purest definition of mass marketing.  It’s what drives McDonal’s to Mercedes. Just because you saw a Mercedes automobile commercial last night nestled in between your  reality shows or sit-coms on TV, didn’t mean that you suddenly realized that you need a new car, perhaps a Mercedes, and ran out and bought one.

Large brands know the investment necessary to stay in front of their prospects until they are ready to purchase.  This is called the buying cycle.  Another truth is, the buying cycle is different for every product and is usually based on the purchase price; the less expensive the product, the shorter the cycle and conversely, the more expensive the product the longer the cycle.  This is why a new car buying cycle is usually around three years and a pack of gum is an “impulse” instant purchase.

All of this leads to another critical question, what is the correct  “frequency” (f) of contact should  I have with my prospects to maximize conversion.  The short answer is, it depends on two variable, the form of communication and the value of the content to the recipient.  Are are several examples.

When I communicate with my prospects using the social platform Twitter, I send out three tweets everyday, Monday through Friday.  This means that I contact my prospects 15 times, every week.  What if…  I sent you 15 emails every week, week in and week out.  What would you do?  Contact Interpol and have me arrested?  Contact a mob boss and have me killed?  Exactly!

Using the email platform, frequency is governed by the technology and what we perceive as appropriate.  In the case of email, if I contacted you, maybe once or twice a month, you would fine that acceptable.  However, on Twitter, it is perfectly acceptable for me to contact you 15 times a week or 60 times every month.  That’s the power behind Twitter.  It is acceptable for me to put my name and my brand in front of you 60 times each month!  But, these truths also lead to another truth, the value of the content (v).

When teaching, I use the email scenario, where a few years back, I purchased a new Macintosh computer.  After the sale, I got an email from the company I bought my Mac from every week.  Every week.  I don’t know about you, but I don’t buy a new Mac every week, or every month, or even every year.  As a result of what I thought as incisive spam, I unsubscribed.

At about the same time, I bought a new fish tank for my office.  After the sale, I began receiving emails from the manufacturer, one each week.  There was a big difference with this company.  Their emails said “Hey, this is the first week of the month.  Did you remember to change the water in your tank?”.  The next email was, Hello Lon, this is the second week of the month, have you changed your carbon filter lately?”.  Every week’s email reminded me that there was a critical task that if I didn’t do, would result in the death of my fish and loss of my investment.

With the amount of international travel that I do, a reminder to clean the filter, test the PH, or change the water is something I could have easily forgotten with dire consequences.  The value of these communications were very important to me so the acceptable level of frequency can be significantly higher.

While the frequency of the Mac store and the fish tank manufacturer was identical, the value of the content varied greatly.  One had little value so I fired that company as a provider, while the other had high value to me, so I allowed them to essentially market to me every week.

Another short example is about a year ago, my wife signed up for a Starbuck’s card.  She would load it with $25 increments and reload it again when it emptied.  Starbuck’s would send her a notice when she purchased enough product to earn her a free cup of coffee or when it was her birthday and there was another free coffee waiting for her.  She liked that.

Then, over the past year the frequency of the emails grew to an email, every day.  These emails told her that she could participate in earning points for sales or something.  This morning she decided to “unsubscribe” from Starbucks email blast and officially switch over to Circle K coffee.  The frequency versus value equation forced to to evaluate the inconvenience of daily emails from Starbuck’s with content that had no value to her.

If it were a daily email with a code for a free cup of coffee every day, She would have welcomed their emails.  By overstepping their frequency while at the same time offer little or no value, Starbuck’s not only lost her from their ability to market products to her, they actually lost her as a valued repeat customer.

Whether you have been aware of this correlation or not, you must agree that it is human nature to perceive communications this way.

Distilling all of the above conversation down to a secret formula, you get this:

Whereas R equals Retention, v = Value, f = Frequency and C = Conversion or Sales.

If you want to keep your brand in front of your prospects during their entire buying cycle so when they are ready to purchase, they purchase from you, you have to communicate with them frequently.

The frequency depends on the platform or tool you use for communication.

The frequency is more dependent on the value of the content.  So…

Given a particular communications tool, the greater the value of content, the great the frequency and the higher probability you will convert that prospect from a prospect into a customer, which will leads to an increase in sales.

Lon Safko, Author, Speaker, Trainer

The Social Media Bible & The Fusion Marketing Bible

Lon Safko, Social Media Bible, Fusion Marketing Bible, digital marketing, author, speaker, trainer

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