90 Second Business Tip.
Double Your Profits.
6 Steps to Doubling Your Profits Without Doubling Your Work
- Know your numbers
- Find more enquiries / leads
- Convert more sales
- Increase average sales value
- Increase profit per sale
- Increase repeat sales
Get a Little Better Not a Lot Better
If I said you have to work twice as hard in each of these areas, you would laugh. The great news is you don’t. All you have to do is get a little bit better across five (5) different activities and the compound effect means you double your profits.
In fact you just need to get 15% better in each of these areas.
Or to put it another way. If you currently get 20 enquiries, I now want you to focus on finding an extra 3, that’s all. Do you think if you tried you could find another 3 enquires, not even sales, just enquiries?
When you put it like this, it’s easy! The same for each of the other areas….do you think you can get just a little bit better?
Know Your Numbers
Do you know your numbers? Do you track them regularly? Often we have a ‘gut’ feel for them but this can be wrong. Spend time working out your numbers and documenting them and keeping up to date. You can then work out what a 15% improvement looks like.
Find More Enquiries / Leads
There are 100’s of ways to find customers, the most important we would suggest is to simple ‘increase activity’. So if you currently just have one major activity, increase it to two or three. Here are just a few ideas of what you could do right now to increase the number of enquiries you receive:
- Ask for referrals from existing customers
- Increase spend on Google PPC advertising
- Add in Bing PPC advertising
- Increase social media advertising or add in new social platforms to the mix
- Attend more networking events
- Enage media / PR
Convert More Sales
Get a little bit better at selling. Nobody is perfect and the chances are you do not have a 100% conversion rate. So look at how you can improve areas such as:
- Improves sales funnel on your website
- Improved sales messaging
- Training of sales team to get a bit better at selling
The numbers:
If you had a 30% conversion rate a 15% improvement would take it to 34.5%
Increase Average Sales Value
This can also be linked to increased profit per sale. Look to get a bit better at sales. It’s a fact that if you increase your prices by 10%, you could afford to lose about 30% of your customers and you’d still make the same money. However the reality is that when you increase you prices, most (if not all) of your customers stay. Increase by 15%, or look for ways to upsell extra products or service to your clients, or offer them better solutions.
The numbers:
If your typical sales value us £1000, a 15% increase would take it to £1150.
Increase Profit Per Sale
This is often as easy as not discounting, or reduce the level of discounting. Or look to upsell additional items, products or services at the time of sale.
The numbers:
If you have a profit margin of 10%, an increase of 15% means you’ll be increasing to 11.5%
Increase Repeat Sales
We want customers coming back time after time as they always say it’s far cheaper to keep a customer than it is to find a new one. Even if your product is one which they don’t need to buy again for a long time, what about other options to sell additional products or services e.g. a service plan, a complimentary product or service to support the initial product.
How to increase repeat sales – here are just some ideas:
- Keep in regular communications
- Send a thank you card / gift after first purcahse
- Birthday cards
- Incentives and offers exclusive to existing customers
The numbers:
If you had a repeat sales rate of 25% in the past, getting 15% better would mean an extra 3.75 customers come back for more.