All too often I speak with sales professionals and business owners who are frustrated with the results they’re achieving and can’t find a solution to take them to the next level.
The reason for their disappointing results is often that their system simply doesn’t work and they have inflated expectations of its success. I’m not necessarily saying that you should lower your expectations, but it is vital that all your expectations are realistic. Otherwise, they’ll only lead you on a path to disappointment. Knowing your numbers and whether your plans and goals actually work on paper is an essential part of building a successful business.
There are some very important equations to remember at all times.
The first of them is this:
Sales – Cost of Sales = Profit
This sounds simple but is often overlooked. This means that if you’re looking to grow our profits, you must first increase your sales. Then, to understand what’s seriously achievable, we can consider the following variables.
Price
The amount you charge for your products and services is an important consideration, yet I often see people underselling for fear of charging too much. It’s 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 might consider adding value to existing services and products, or perhaps renaming or rebranding them. A major change in your business, like a change in location, is another great time to revisit your pricing strategy.
Number of sales staff
Sales staff can be a great investment. At their best, they bring in a much greater return than the sum invested. Whether you’re an owner, manager, or director of a large operation, your employees’ sales time should be your most profitable, and seen as a high-payoff activity. Investing time and energy in selling is one way to guarantee the continued growth of a business. Without the acquisition of new customers, eventually every business will fail. Planning the time you spend selling and the resources you apply to your sales operation is essential to ensure that you get your desired returns.
Number of appointments
Of one thing I am certain: you can’t have more new sales than you have opportunities to sell. Managing these numbers is essential in driving growth. Ten appointments a week is deemed acceptable in a field sales environment, but push that up to eleven and you could achieve incredible results.
Conversion
Have you ever heard the old saying, “every no is just one step closer to a yes?” Well, to me, every “no” is painful and should be avoided at all costs. Sales opportunities are hard to come by, often well-earned and should be maximized. Always measure existing conversion rates and look for ways to improve. I’m sure you’ve 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 acquiring new customers, yet you can often find massive value in increasing the number of transactions your existing customers make. This sounds difficult, yet simply maintaining the relationship through good account management and simple marketing can easily influence the number of times a customer chooses to do business with you. Upon reading this you might be thinking, “It all makes sense, but 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 leading you to meet and exceed your expectations. Getting this right now can increase your sales dramatically. I’m sure you’ll agree that in order to get a different result from what you’ve accomplished in the past, something has to change.
