How to increase your sales

Selling more

Just two choices

There are only two ways to either grow or rescue a business. You can:

Cut Your Costs

or

Increase Your Revenue

These two areas need constant attention if you are to stay in business (and stay sane). You need to “sit where you can see the money”. The details of what to do vary but essentially it comes down to measuring actual cash coming in (your sales) and actual cash leaving (your spending).

Know your numbers

You should always know these numbers:

In this briefing we are going to look at some ideas for increasing your revenue.

Three ways to increase revenue

Sell More

Without sales your business is dead and understanding the process of sales is crucial. You can do four things to increase sales:

1. Increase the number of new prospects

Even a small increase in the number of new enquiries can lead to a big jump in eventual revenue. What can you do to increase this number? Many small business owners do the same things over and over again while expecting a different result. What else could you do? Think about new tools, new places and new approaches. Could you encourage previous customers to help you?

2. Increase the number of conversions

Study your successful sales. What was it that helped a new prospect make the decision to buy? Would you convert more of them if your systems were better or if you provided more information or if you took more time to answer questions? Could it be as simple as providing alternative ways to pay?

3. Increase the average transaction value

How can you increase what your customers spend? What is the most it is possible for a single customer to spend with you? If you are selling a book for £7.99 then the most your customers can ever spend is £7.99. Could you create a chain of opportunities so if someone buys once you can offer them something else to buy? Is there an incremental sale you can offer them at the time of purchase? This is the reason that a shoe shop assistant asks whether you need polish and McDonalds ask whether you want to “go large”.

The best time to get an extra sale is when they are already buying.

4. Increase repeat and referral

For a small business this is the most important priority. Understand the lifetime value of a repeat customer and treat them accordingly. Go the extra mile. Pleasure them. Give them something to talk about and make it easy for them to tell their friends.

This table shows a business with 30 enquiries that result in 10 leads (33% conversion rate) each spending £1,000. If we make a 10% improvement in enquiries along with converting 10% more of them (36% conversion rate) and increasing the average spend by 10% the result is a big increase in revenue.

A 26% improvement in leads takes us from 30 to 38. A 26% improvement in conversions take the conversions from 33% to 42% and if each one of those spends 26% more then revenue doubles.

Enquiries Conversions Spend Per Head Revenue
30 10 £1,000 £10,000
33 (x 10%) 12 £1,100 £13,200
38 (x 26%) 16 £1,260 £20,160

At the bottom of this pages is a working sheet to capture some ideas for working in these three areas.

Charge More

Perhaps the simplest way to raise revenue is to charge more for what you do or sell. Always be looking to nudge prices up by 10% unless your business is unduly price sensitive or tightly regulated. Always aim to be as expensive as you can so you attract value buyers rather than price buyers.

Diversify

Maybe the time has come to do something different. Watching money being spent should become your study from now on. When you are out and about see if you can spot where the money is going. Even in hard times money flows around, it just flows to different places. What else could you sell? What problems could you solve for people? What is the competition doing that you could do as well? What are they not doing that you could do?

Why do you buy?

What do your own buying habits tell you about why people buy? If you have recently spent money on a product or service you probably went through a process similar to this:

What does this process show you about how your own customers buy from you? Is there anything you could do, at any stage, to make it easier for them?

What stops you buying?

Similarly, you have hesitated, held back, not bought goods or services recently. Some businesses have actually put you off. Is there anything you can learn about by walking through your own company’s buying process as if you were a customer? Use the table below to capture your ideas:

More Enquiries More Conversions Higher Spend
Make a list of ideas for bringing in more qualified enquiries Ideas to convert more of these enquiries into sales Ideas, offers etc. to encourage a higher average transaction value