No doubt you have already set some goals for the year ahead, lose weight, stop smoking, start running blah blah blah.
Why do we need a “New Year” to do this? Why don’t we do this all the time or at any other time throughout the year? We are halfway through the first month of 2018, so how are you tracking with your New Years resolutions?
I insist that my clients track their business success throughout the year, often businesses will wait for the new financial year to start making changes or setting new goals. You can set goals and plans for your business at any time, the key to success is sticking to them. So while setting your personal goals for the year ahead, start by making sure you are doing the same for your business.
Are you constantly tracking your progress? Are you looking for new ways of doing business? Have you asked your customers what they loved most about dealing with you in the past year? Have you asked your customers what they would like from you in the New Year? Are you looking for new markets? Are you looking at how to grow your business?
Last year saw many businesses reducing head counts, cutting back on marketing and other “expenses” (please note, I do not see marketing as an expense but rather an investment), doing all this as a way of trying to reduce expenses. What if you looked at things differently? Instead of looking at reducing costs by cutting back, find ways of growing your business to reduce costs.
There are a few simple ways to start doing this; you need to increase your number of leads. What do I mean by leads? It’s the number of potential clients you can pour into your sales funnel. Then look at how you increase your conversion rate of these leads.
Let’s work on a simple example to illustrate the importance of lead and conversion rates in your business to help understand the importance of these and why you should be monitoring them. Assume your average sale with a customer in your business is R 100 if you get 10 new leads into your business and your current conversion rate is 40% that means you would have the potential of generating additional income of R400 from your leads. If you were able to increase your conversion rate to 60% you would increase potential revenue to R600, which would be a 50% increase in your revenue.
Now, what would happen if you were able to increase your leads as well as your conversion rate? Let’s assume you increase your leads from 10 to 15, at a conversion of 40% you will generate R600, if you apply a conversion rate of 60% as mentioned above your revenue now goes from R 600 to R900, so by increasing your leads and conversion rate, you increased your revenue by 125%!!! Now does that not sound like a great goal?
Now you may be questioning, how you get more leads? You market your business. There are so many ways of doing this and they do not all need massive marketing budgets to achieve this. Try simple methods like networking, social media and referral strategies as a start.
The best way to increase your conversion rate is to ensure you know who you are selling to and make sure you meet their needs. When we do not convert a customer ask them why. This is something people cringe at when I suggest it, why? Well, we get embarrassed at the thought, because we don’t really want to know the answer. It's almost like that rhetorical question… do these pants make my butt look big, are you willing to hear honest feedback? To reach your goals you need to be. The thing is the answers you get can assist you in growing your lead and conversion rate and in turn your revenue. Let’s take some examples of possible reasoning:
• We did not feel you were going to provide the solution we were looking for
• Your pricing was out (a great excuse used by salespeople)
• We got a guarantee from your competitor
These few examples can help you define new ways of selling or positioning yourself in the market against your competitors. For example, if your price is too high have you sold your value correctly?
There are other ways of increasing your bottom line, these include increasing your average sales value per client, as well as the number of transactions you have with them, upselling. Then ensure you understand and monitor your margins, mark up, and discounts, anyone can sell something for nothing, but business needs profitable success.
If you need guidance on how to improve these areas in your business, contact me
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