It is important to make sure you are focusing on the right numbers.
There are 5 proven drivers that we found can significantly increase your profits. Focus on increasing the five drivers below and you will see a positive impact in your bottom line.
5 Proven Drivers to Increase Profits
- Leads – the total number of individuals / businesses that you talk to you about your business and that express interest in your goods/services.
- Conversion Rate – the percentage of leads that actually buy from you.
- Number of Transactions – the average number of revenue generating transactions that you have with each client annually
- Average Dollar Sale – average dollar amount of a sale transaction in your business
- Margin – % of you revenue left over after all the expenses have been recorded or paid
What you may be surprised to realize is that your focus should not be on customers, revenue and profits as they are outcomes which can not be changed.
It is important to focus your time and energy increasing all the other drivers which can be impacted such as: leads, conversion rate, number of transactions, average dollar sale and margins.
We can look to increase our number of leads through networking, online marketing, creating a referral program and forming strategic alliances.
Conversion Rate is the area of greatest potential. In order to convert prospects you must create a process which will enable you to discover where leads convert or fall out. Utilizing sales scripts for your team is a great way to implement a process that is consistent and it allows you to understand where in the process the leads aren’t converting. You can also offer guarantees in your sales process. If you provide a guarantee for your service and you can stand by it – it may help convert skeptical customers to buy.
You can increase your number of transactions by offering additional products/ services to your current client base.
The average biz spends 6X more to get new customers than it costs to bring back old customers.
How can you increase your average dollar sale? “Would you like fries with that? Three out of ten say yes. So,what can you add on?
Margin – Increase your prices! Watch the margins on your goods or do job costing on your service and sell more goods/services at higher margin. Outsource things like payroll and bookkeeping.
Whatever your business challenge is, we can help you starting today.
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