The Conversion Equation is a cost-effective formula that converts Prospects into Customers.  It’s made up of four parts which are:

1. Interrupt: Identifying the problem the customer has and doesn’t want. Whether we like it or not we business owners are problem solvers.  It is critical that when you identify the problem that you identify a specific problem.
2. Engage: Now that you interrupted the customer you provide a short one or two sentences on the solution. 
3. Educate: After you engage the customer you can educate the customer in more detail as to how you go about solving the problem.
4. Offer:  Finally it’s time for an offer so compelling that the customer can’t say no.

 There are four ways to create a compelling offer: Urgency or scarcity, risk reversal, adding more value to the product, and bundling.  An offer using urgency or scarcity is saying the offer is only good until a certain time or there is only a certain amount left.  For instance, the offer is good until Wednesday or there are only 5 left so you have to hurry.

Secondly, a risk reversal is when the seller in the transaction takes the risk.  When I was in the ski business, the problem the customer had was they were not sure the skis that were being sold to them were the right skis for them.  So, our policy was to ski the ski 3 times and if it wasn’t right, bring it back for a brand new pair and keep doing it until we get it right. 

Next, you can add more value to your product or service. There are many ways to add value. When I was in the Frozen cookie dough business, the problem the customer had was they didn’t want to take up valuable oven space baking cookies. So, I knew the value of a customer (a very important metric to know by the way) and I gave away a free convection oven with every opening order.

Lastly, you can package and bundle products and services.  The important point here is that when you package products together it makes it more difficult for the customer to comparison shop.  When I was in the Ski business everyone sold ski packages, skis, boots, bindings, and poles but the customer had a hard time comparing prices.  I took it one step further and did clothing packages where I bundled a hat, sweater, bib, and parka for a first price point of $99.95. Packaging and bundling gives the perception of value.

Remember, the most successful business owners know their numbers.