As a follow on from last week’s “5 Key Drivers to massively increase profit” I thought it would be useful to look at the actual acquiring of more leads/inquiries, more quoting and ultimately more customers!
First up, what is your USP i.e. your Unique Selling Proposition?
What is it that differentiates your product or service from your competition?
What makes it unique, better?
Is your product cheaper, is it faster, is it lighter or smaller etc. Maybe it’s your superior customer service that put’s you ahead of your competition?
Whatever it is, make this your point of difference and make sure your target market is aware of it.
Next, do a stock-take of your marketing collateral. What does this mean?
Look at it with the eyes of a potential customer; would you be interested?
Does your marketing use the AIDA principles of Attract, Interest, Desire, Action?
Do you have a presence on Internet?
Is your webpage outdated or is it a live, up to date interactive experience? These days with the popularity of tablets and smartphones your audience expects dynamic data, not a static “About Us”. Obviously your site should be compatible with mobile platforms as the modern internet user has a very short attention span with badly designed websites.
Does it have information to attract, get prospects interested, stimulate desire and importantly a call to Action?
For example you could offer a free “how to guide” about your industry, product reviews or a tutorial, available in return for the prospect entering their email address agreeing to be added to your newsletter list. This contact then becomes a potential lead and with the right systems in place will be followed up.
Follow up is critical, how often do your sales team follow up on a lead or inquiry?
How do you know?
Lead Generation: Are the sales team making the most of “no to low cost strategies?”
The soft sell, the consistent presence in the marketplace. Are they networking, business group breakfasts etc. Industry associations? Chamber of Commerce?
Are leads being captured? How?
What is the follow up procedure? You do have one??
What is the conversion ratio?
Do you maintain a database or better still a CRM accessible to everyone who will deal with a customer throughout the project?
A great tool which is essential to you being able to let go, to walk away knowing that KPIs will be met, is to implement a CRM i.e. a Customer Relationship Managment database, ideally one that is internet based allowing you the owner to log-in from anywhere in the world (e.g. from the back of your yacht) and check sales activity, orders, profits etc.
One such product is Sales-force; after researching the CRM software available for a particular client of mine, I can say that it is perfectly suited to manufacturing/service oriented businesses & is affordable both in implementation and maintenance with no need for software updates and expensive SQL servers.
Whether you use a CRM or not it is imperative to measure every aspect of the sales process. At the minimum, insist on your sales team completing a comprehensive report on the week or month just past and their intentions in the following reporting period; in other words, make them accountable.
Insist that your salespeople read this book: www.businessballs.com/freespecialresources/Consultative_Selling_ebook.pdf
You should also seriously consider investing in a “mobile app” for smart phones which your customers could download onto the one thing they all have with them at all times, their phone! This would allow you to target customers by region, by demographics, by the type of product they buy and then send them details of specials etc. A great way to increase the frequency and average value of each customer. There are many developers of apps on internet who for a minimal fee will have your app up and running in no time.
Do you know that by focusing on the following five profit drivers and measuring the results regularly in each you can transform your business?
- Increase leads: create and send newsletters regularly to your existing database of customers & prospects, ask for referrals and testimonials, join industry associations and local business groups. Attend networking events.
- Increase conversion ratio: develop scripts and follow-up processes.
- Increase the number of times a customer buys from you: Treat them as a VIP buyer, give them discounts, celebrate milestones with them, ask for feedback and act on it
- Increase the average sales value per customer: encourage your sales staff to up-sell, create a simple form that they tick off each of the options they have offered their customer
- Increase your Gross Profit: through the systemization and continuous improvement of processes (which I will go into in a later article) it is more than certain that you can increase your current GP by 10%
For example you have 100 leads and a 20% conversion ratio, now let’s apply the 10% increase:
|Average Sales Value||$25,000||10%||$27,500|
|Average Customer Value||$125,000||Becomes||$151,250|
|Average Customer Value||$125,000||21%||$151,250|
|Gross Profit %||20%||10%||22%|
|Total Sales Increase||$2,500,000||46%||$3,660,250|
|Gross Profit % Increase||20%||10%||22%|
By focusing on each of these key areas and achieving 10% increases in each, we have increased profit from $500k to $805k!
Is this possible? Yes, I believe so, but even if you were to only achieve 5%, wouldn’t that still be worth the effort?
Remember also, that what gets measured gets results.
Focus on increasing the number of leads, the conversion ratio, the number of customers, their average sales value and the profit on each sale and you are guaranteed to get incredible results!