By Tony Monisse (Brentnalls WA – Affiliate Firm)
It is that time of year, where budgets have been set for the year and it is important that businesses get good momentum early in the financial year to achieve these budgets. My experience is that there are generally four tactics, which I describe below, to increase your sales revenue and get this momentum.
Number of customers
Increasing the number of customers is mostly about how you can increase:
• the number of leads; and
• your conversion rate from these leads to a sale.
To increase the number of leads, it is important to have multiple channels to market to get to your target customer and to have good levels of activity to engage with these prospective customers. Businesses who are doing well in this space are active in social media (Linkedin, Facebook etc.) and using this to engage with their target customers. The key is to understand where your target customers go, and to focus on the right channels to reach them.
To increase your sales conversion rate, it is important to have a good sales process – this can be either online or if the sale is more consultative, then a face to face sales process. My experience is that most businesses do not have a defined sales process and do not invest the time to maximise this opportunity. By defining your optimal sales process and understanding how your current sales may differ from this, you can look to improve this area and increase your sales conversion rate.
Frequency of the customer spend
Increasing frequency is about building a relationship with your customer and understanding their needs and wants. Again it is about activity and engaging with the customer either online or in person. A good CRM (customer relationship management) system where activity is monitored, tracked and automated can help this process. I see a lot of businesses who often cannot get out of the office and are not active in engaging with their customers. It is not surprising, when they do get out to customers how much additional work they pick up.
Average customer spend
Increasing your customers’ average spend is once again about having a good sales process including taking the time to really understand their needs and the challenges they face. The example most cited is McDonald’s “would you like fries with that?” and the amount that this simple question contributes to McDonald’s revenue and profit. This simple question is an example of upselling, where customers are offered an additional product or service which will complement the product or service they have already committed to buying.
Other opportunities to increase sales can include bundling products and services, creating multiple offers (gold, silver and bronze) and cross-selling other products and services. It is far easier to get a customer to buy more when they are already in ‘buying mode’ than it is to get them to come back for the purchase at another time.
Increasing prices (or rates) is often overlooked by most businesses. My experience is that when businesses do increase prices there is generally minimal pushback from customers and where there is pushback, it is from unprofitable customers. The great thing about increasing prices is the increase in price goes straight to the bottom line.
If a business were to achieve a 5% increase on the previous year in all the above areas, the increase in sales revenue for the business would be 21.5%. Consider what that might look like for your business. For this reason it is important for businesses to look at all the areas where they can improve their marketing and sales process and increase their level of activity.
If you would like to discuss how you can improve your business’s sales revenue, please contact Harris Black on 07 3032 0200.