All too often I speak with sales professionals and business owners who are frustrated with the results they are achieving and can’t find a solution to take them to the next level.
Often the reason for their disappointing results is simply that their system does not work and they have false expectations. I am not saying you should lower your expectations, but it is vital that all expectations are realistic; otherwise, they will only end in disappointment. Before setting your plans and goals, they must work on paper, and knowing your numbers is an essential part of building a successful business.
There are some very important equations to remember at all times.
The first of these is:
Sales – Cost of Sales = Profit
This sounds simple but is often overlooked. This means that if we are looking to grow our profits, we must first increase our sales. Then to understand what is achievable, we must consider the following variables.
The amount you charge for your products and services is an important consideration, yet we often undersell for fear of charging too much. It is never easy to increase your rates, but consider the prices the rest of your market is charging and place yourself in a range the market can afford. The easiest way to change your price is to also change your offer. For example you could consider adding value to existing services and products or perhaps renaming or rebranding them. Another great time to revisit pricing is at each major change in your business such as a change of location.
Number of sales staff
Sales staff should be a great investment, and as such, bring in a greater return than the sum invested. Whether you are an owner, manager or run a large operation, your sales time should be your most profitable, and seen as a high pay off activity. Time invested in selling is one way to guarantee continued growth of a business. Without the acquisition of new customers, inevitably every business at some point will fail. Planning the time you spend selling and the resource applied to your sales operation is essential to ensure you get your desired returns.
Number of appointments
I am certain you cannot have more new sales than you have opportunities to sell. Managing these numbers is essential in driving growth. Ten appointments a week is deemed as acceptable in a field sales environment, but push that up to eleven and you could achieve incredible results.
Have you ever heard the old saying, “every no is just one step closer to a yes”? In my opinion every ‘no’ is painful and should be avoided at all costs. Sales opportunities are hard to come by, often well earned and should be maximised. Always measure existing conversion rates and look to improve. You will all have encountered situations where you know you could have done better – learn from those experiences. Read business books, attend training sessions and ask for help. By continually learning and looking for slight improvements, your conversion ratios will improve.
Frequency of transactions
We spend most of our efforts on the acquisition of new customers, yet there is often massive value in increasing the number of transactions our existing customers make. This sounds difficult, yet simply maintaining the relationship through good account management and simple marketing can very easily influence the number of times a customer chooses to do business with you. Upon reading this I am sure you are thinking it all makes sense however is it worth it? Take a look below and see how a 10% improvement in each area can result in a massive overall improvement.
Take the opportunity this month to review all of your numbers, and check that your efforts are meeting expectation. Getting this right now can increase your sales and I’m sure you will agree that in order to get a different result from those accomplished in the past something has to change.