Dun & Bradstreet conducted a study that evaluated the factors that contribute to business success. They concluded the following:
- businesses with high sales tend to succeed
- businesses with low sales tend to fail
- all else is commentary
We can cut our costs, improve our efficiency, consolidate our purchasing power, etc. However, ultimately, our success is going to be measured by how well we sell our goods and services. Hence, our future success lies in how effectively we pull on those levers that influence sales growth.
Sales Growth Success
Brian Tracy is the person who introduced me to the following approach related to sales growth. He describes adherence to the following as The Way to Wealth.
In order to generate increased sales revenue, we need to determine how we can leverage the four inputs that drive sales.
First, we need to find more leads who we will convert into prospects. (This step requires that we know where or how we can find leads.) In turn, we need to convert the resulting prospects into customers. Both of these steps have a corresponding conversion rate. That is, what percentage of our leads do we turn into prospects and what percentage of prospects become customers?
Can we find more leads and increase our conversion rates?
Once we have customers enjoying our goods or services, we need to know the number of transactions per customer that have occurred during a given period. For the sake of illustration, let’s consider a 12 month period.
How do we increase the number of transactions of each customer?
Finally, our measurements need to capture the average dollar amount per transaction during the 12 months under consideration. Do we have a strategy that we can use to increase this number?
Now, please understand that measuring the above numbers are critical to understanding where we can apply greater leverage to our business. So, if these numbers aren’t part of our current key performance indicators, we need to realize that flying in the dark can be extremely hazardous!
In summary, we know that the levers to our sales success include finding more leads and converting them to more prospects and subsequently converting them to a greater number of customers. What can we do to improve our lead/prospect conversion rates? Once we have them in the door as customers, what actions can we take to increase the frequency of their purchases and the dollar amount that is spent on each purchase? This is where we might put on our marketer’s cap to contemplate such things as segmentation and differentiation, as part of our marketing strategy. But, that is for another post.
Now it is time to leverage your sales growth to greater heights! May the fulcrum be with you!
For some greater detail on the above subject, you might like to listen to a webinar that I recently conducted for SmallBusinessSolvers. It can be watched below:
http://www.youtube.com/watch?v=01V2ZSoUxUM
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