website free of charge, as long as the author's byline and website address are included. Word count: 665 The Three Things You Must Know In Order To Increase Your Sales Without Cutting Prices Type “increase your sales” into Google and you will have 31 million six- hundred thousand websites to choose from! Talk about information overload! When it comes to ideas for increasing your business revenues, it is a daunting task just to know where to start. The one place you should NOT start is by cutting your prices. When you consider all of the available advice, the guerrilla marketing strategies, the myriad of “how to” articles and books, there are really only THREE ways to increase your business. 1. Increase your number of customers/clients. 2. Increase the average size of each sale per customer/client. 3. Increase the number of times a customer/client returns (annually) and buys again. That’s it: number, order size and frequency. Set about learning these three numbers as regards whatever business you’re in and you will be able to develop a workable plan that can result in additional business. Is calculating your number of customers/clients, figuring the “average” amount they spend per transaction and determining how often they purchase worth your time and effort? Let’s set up an imaginary example. Let’s say that you have 2,000 clients that average $20 per transaction and that they make three purchases in a 12 month period. 2,000 x $20 x 3 = $120,000 total revenue in one year. You can actually start with your total annual revenue and work this formula backwards the first time you do it, adjusting and tweaking the numbers to fit the total. Here’s the “magic” of using this formula: if you can increase each of these 3 factors by 10%, you will achieve a 33.1% increase in revenue! A 10% increase for each number looks like this: 2,000 customers x 110% = 2,200 – an increase of 200 $20 per sale x 110% = $22 – an increase of $2 3 visits per year x 110% = 3.3 2,200 x $22 x 3.3 = $159,720 – an increase of 33.1% A 25% increase for each number will DOUBLE your sales: 2,000 customers x 125% = 2,500 – an increase of 500 $20 x 125% = $25 – an increase of $5 3 visits per year x 125% = 3.75 2,500 x $25 x 3.75 = $234,375 – which DOUBLES sales. These examples are over-simplified but they clearly show the sheer power of how to grow your business via this geometric formula. These examples also show how vital it is to KNOW these three numbers as regards your own business. Creative thinking is the answer to increasing any one or all three of the above factors. Maximize what you already have. Search out new business using NEW methods, not just continually doing what everyone else does. Pay a higher commission on the FIRST sale to any NEW client. Your salespeople’s motivation to find new business will increase by leaps and bounds. Initiate a program to gain back old clients that have wandered to the competition. Do this on the basis that it way more expensive to get a brand new customer/client than to gain back an old one. 80% of lost clients did not abandon you for a reason or reasons that cannot be overcome. Work it! You need to constantly search out ways you can out-think, out-perform and out-earn your competition. “Test” rather than “plunge.” Bob and weave. Turn your customers into your best sales force. It CAN be done and it IS being done by lots of small fish in big tanks everywhere. Bob Schumacher has a wide range of experience gathered in over four decades as an individual entrepreneur, chain retail national sales manager and media marketing director. He is also an author and small business coach. E-mail your questions or comments to Bob at marketingemporium@bresnan.net. He’ll reply to you directly or visit his website: http:// www. 20do80.com for a complete directory of his articles and books. |