By Robert Noad

It appears that what every entrepreneur aims for is an increase in sales. Boosting sales figures is widely seen as the key to increased profitability! Can I assume that if I get more customers who buy my products I would be more profitable? Not necessarily! There are other factors that need to be taken into account too!

How then do you increase profits? You get more customers, or you resell to existing customer base right? It would be incorrect to take a narrow view by examining just one aspect of business. You might have 3000 customers which once bought a product or used a service before and never again. How else can you grow your business? Here are some factors I think you need to consider in sales:

1. Leads
The quantity of leads refers to the quantity of people you, or your staff, talk to in an effort to make sales. Leads can be people who contact you in response to a marketing campaign or perhaps your sales force has established contact with them. Qualified leads are always better to save time and money. Good quality leads are people with money who are looking for your product or service and are ready to buy. Someone once told me that you should know what people want and then give them what they want. People love to buy, but hate being sold to! People enjoy having their problems solved and a lead is likely to be the person that has a problem or a need! Your product or service must be the solution to that leads problem. More leads can be increased by using creative ideas where people can see the picture and the want be turned into needs and must haves! A security fence becomes a need when someone else has been robbed, or hi-jacked.

2. Conversion ratio
This is a skill that only a few can master effectively! Building quality relationships with clients will increase your conversion ratio. For you to be able to determine your conversion rate it is important to record the quantity of leads versus the quantity of sales turned over from such leads. This is the quantity of leads that turn into actual sales, expressed as a percentage. If, for example, you try to sell 10 people a product or service, but only 1 person buy, your conversion ratio would be 10%. If you don’t record your leads versus closing the deal you will not be able to determine your conversion ratio.

3. Repurchase
To get you current customer base to re-use your products or services is ideal. Satisfied customers who have a good relationship with you or your company is that factor that will bring them back to repurchase.

4. Reducing overheads
You can increase profitability by reducing your overheads. More money would be available to invest in those areas that increase sales like training of staff to increase productivity.

5. Margin
To sell goods or services without making a profit on transaction would be pointless. The percentage mark-up on goods sold constitutes the gross margin. Costing plays a vital role in fair and profitable margins. Your competition could deliver a similar product at a better price if you are not fairly priced. Here too information recorded is of utmost importance! What you cannot measure you cannot analyze properly. Figures speak volumes and a good business owner must be able to analyze the figures so he can take corrective action.

6. Productivity
Having the correct people at your work place who wants to be there and make a difference is what we all strive for, but unfortunately some people is just at work! The ideal is to get people who are willing to do more than what is required from them and then reward their ideas and efforts as they make a meaningful contribution increasing profitability!

Robert Noad

URL: http://www.mbimarketing.co.za

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