Sustainable, measurable growth in business is founded on a set of 6 simple metrics. They apply to every type of organisation, whether an established super entity like Apple, the local hairdresser down the street or a start-up business that sells organic flowers online.
Following these could see anyone double their profitability within a year to two years from now. It’s what I like to call The Profit Calculator System.
So, if you find yourself walking the tightrope of hope and fear, (I hope I sell enough, I fear if I don't) - then pay attention.
The first metric to look at in your business is having a continuous supply of qualified LEADS rolling into your business.
Monitor, measure and analyse your current lead generation strategies and systems according to the cost per lead, what is working and what is not.Use this data to improvise and automate your systems for better results.
The second metric to look at in your business is the process you follow for CONVERTING a “lead” into a “sold”.
There are a ton of things to consider, one being that your process appeals to both immediate and future buyers. To supplement this, look at sales scripts or pitches to contain the appropriate information to empower salespeople to cover all angles when communicating with their prospects.
The third metric to look at in your business is the number of TRANSACTIONS you are closing.
Think about this: “The probability of selling to an existing customer is up to 14 times higher than the probability of selling to a new customer.”
Here’s another one: “It can be 5 – 15 times more expensive to attract a new customer than it is to retain an existing one.”
How many times per year do you sell to your clients and buyers? Do you have additional services or products to offer that may add value to your existing customers’ lives?
The fourth Metric to look at in your business is offering your products and services at HIGHER PRICES.
Business owners often share the same frustration of believing they have to decrease their margins to compete in their marketplace. There always seems to be someone who is willing to go further just to get that deal!
However, if you are competing on lowest price, stop it! Discounting is a losing battle and here’s a simple example why:
When a business owner typically sells at a margin of 40% and gives a 10% discount, he would have to sell 33% more to make the same profit.
On the other hand, if a business owner increases his sales price by 5%, he could potentially lose around 10% of sales, yes, but still, have the same profit at the end of the day.
The truth is that nobody notices or cares about a 5% increase from, let's say, $150 to $158 for the product or service they know and trust.
Don’t discount, rather look for ways to combine different products or services by adding something with a lower initial cost and higher perceived value. This will subsequently increase sales outcomes by up to 30%.
The fifth metric to look at in your business is making HIGHER PROFITS.
Look for ways to decrease the cost of doing business. I mentioned this concept in metric 3 earlier: “The cost of retaining clients is far less than exclusively creating new ones all the time.” Another way to decrease your cost of business is by employing interns or young people fresh out of college. They need experience and credit toward their resumes and of course, in return offer their enthusiastic, creative minds and hands without the added cost. One more way to increase your profit is to renegotiate procuring expenses and or terms with your suppliers.
The sixth metric for business success is keeping a HISTORY to reflect and improve on.
By keeping track of your business, you will gain valuable information from past deals to improve future success. Once again, a system of monitoring, measuring and analysing your business continuously will help you find the answers to why you are winning and losing sales.
Integrate this knowledge into your selling process to win more deals and deliver consistent results.
By combining these 6 important basics to business success and simply focusing on one at a time you will have the backbone to calculate, improve and even double your profits over the next 12 – 24 months.
Predictable Success can examine your sales processes and deliver an accurate road-map after determining where you’re on track and where you need a course correction. Predictable Success can provide a cost/benefit analysis and expert recommendations to improve your sales performance on every level.