Full Version: How to increase your sales,easily!
From: AnthonyC [#1]
9 Dec 2005
To: ALL
The thing is, when you look at the numbers closely, you have a better idea of what needs to be changed.
There are only 3 ways to grow a business!
1. New Clients
2. Increase the size of the sale. (Upsell!)
3. Frequency of sale.
If you want to increase your business dynamically, you need to increase it geometrically, as opposed to linearly. You need to look at your marketing methods through a funnel, rather than a tunnel.
Let’s crunch some numbers. Let’s look at a very simple 10% increase in each category.
(I’m going to use easy math just to demonstrate the concept. I have an Excel spreadsheet which I can email you if you want to crunch your own numbers.)
Clients: 100
Sale: $50.00 (Average)
Frequency 3 times a year (Average)
Total =$15,000
Now, let’s say you get better at finding new clients, or selling your services for a higher price; or you add a new product line for them to purchase. This creates a 10% increase in each area.
Clients: 110 buy
Sale: $55.00
Frequency 3.3 times a year (Average)
Total = $19,965.00
The increase is no longer 10%, but has jumped to a whopping 33%. Try a 20% increase in each area and see what happens! I think you will be shocked!
By manipulating the 3 groups, it's a whole lot easier to increase your sales and revenue, rather than just chasing new business.
Number 1 is commonly known as the front end sale and 2 & 3 the Backend (More on this later).
A large number of businesses generally think of increasing revenue by acquiring new customers (Frontend). This is probably the most expensive, as well as the most difficult. New customers don’t really know you. You don’t have a relationship with them.
“People buy from people."
There is so much money to be made in the backend. Try doubling the numbers for 2 & 3 and tell me what happens. I guarantee it’s probably easier and cheaper than trying to double your clients.
So what can you do?
Increase the size of the sale, by upselling or selling a complimentary product.
Keep in contact with your clients and contact them when it’s time to buy, or when you produce or release a new product.
(This really is easier than it sounds.)
I buy flowers from a florist, here in Montreal, and they record their transactions in a database. About a week before an Anniversary or Birthday, I get a call asking me if I want to buy flowers.
Of course I do, because it makes my life easier. More on databases later.
I hope this makes sense. Once you start playing with the numbers it really starts to make life really interesting.
The reason I started here, is because, when you understand this concept it makes all your sales and marketing decisions easier.
I’m more than happy to share my ideas and the things I’ve learnt here on the forum. You can take them or leave them, it’s entirely up to you, but I guarantee, if you take some sort of action, no matter how small, your business will grow.
The website is still under construction, but the email is up and running.
Feel free to email me your comments at
results@ultimate-marketing-solutions.com
Best Regards
Anthony Coyne
Ultimate Marketing Solutions
PS For those who know this stuff, hang tight the really good stuff is coming.
EDITED: 9 Dec 2005 by DGL
From: Liberty [#2]
10 Dec 2005
To: AnthonyC [#1] 10 Dec 2005
I'd always heard it a little differently, but the same basic end result.
5 Points of Leverage
Leads (point 1)
X
Conversion Rate (point 2)
=
Customers
X
# of transactions per year (point 3)
X
Average $ per Transaction (point 4)
=
Revenues
X
Margins (point 5)
+
Profits
Work on all five points.
From: Rolf (RJB2108) [#3]
12 Dec 2005
To: AnthonyC [#1] 5 Jan 2006
THANK YOU ANTHONY!!
This is great stuff.
I will my eyes on this. And learn and learn and learn ..........
Thanks again
Rolf
From: Cody (BOBTNAILER) [#4]
5 Jan 2006
To: AnthonyC [#1] 5 Jan 2006
What you've shown here goes hand-in-hand with a book that I read called "Return on Customer".
The author points out that most of us have a "new customer acquisition" mindset, but that this is often counter-productive. They go on to demonstrate that, at least in most cases, if we work toward realizing the potential of our existing customers, we'll see much more benefit.
The law of diminishing returns creeps in at some point, because each customer only has so much money. However, we should work toward maximizing the value that each customer brings to our shop.
The book has a lot of insightful points...many of which are over my head. I think I've gotten enough use out of it to cover the purchase price. B-)
Thanks for bringing this up!
Cody