More sales for less effort

If you think of what you do as solving a problems for your customer, what other problems could you be solving for them? And what sort of impact could that have on your sales? You surely know by now that I’ll want to talk you through some figures! Let’s have a look, and I’ll use the same figures as my last blog. Your sale is £50 and your customers buy on average 4 times a year (but you’ve now increased this to 5!). However let’s just stick with 4 times just now. If there was something extra that your customers could buy at that point, and it might be an extra £5, that’s £20 per customer. You’ve got 500 customers so that an extra £10,000 in sales. That’s the equivalent of another 50 new customers.

Now I know it’s easy to come out with figures and I don’t really expect all your customers will buy more every time. But can you see how this is worth considering?

It could be that you offer different levels of service to different customers and that’s how you can increase the average spend. There is evidence to suggest that 10% of customers will always buy the most expensive option. If you don’t offer them alternatives you could be leaving a lot of money on the table. Or they may even go elsewhere for that premium service or product.

We’re all familiar with the upsell, for example:

MacDonalds – ‘Do you want fries with it?’

Restaurants – ‘Would you like a drink while you’re looking at the menu?’ ‘Would you like a dessert/coffee?’

Airport parking – ‘Do you want us to park your car for you?’

Hairdressers – ‘Would you like a treatment to keep your colour longer?’

There’s a whole load of others and I’m suggesting if you’re not doing it in your business then you are not solving all of your customers’ problems. Some of your customers are really short of time and would appreciate something to help with that. Some of your customers trust you and are happy to buy more things from you. Some of your customers like to have the best quality. So why not help them?

To be frank if you don’t help them they may think you just don’t care enough and go to your competitor anyway. And you don’t need to provide it all yourself. There may be a like minded business owner you can join up with and recommend (for commission or not) to your customers. They in turn may well return the compliment.

By thinking in a slightly different manner you might not need so many extra leads or new customers. It’ll cost you less to use your existing customer base, you can do it in less time and you can strengthen you customer relationships at the same time.

More Secrets to Increasing Sales

So how do you get existing customers to buy from you more often? I don’t know your specific circumstance so I’ve got to be pretty general here to try and cover as many bases as possible. But if you look at the maths (I’m pretty keen on this!) it could make a real difference to the sales and profits of your business.

Say you have a product/service you sell for £50 to your customers on average 4 times a year. What happens if you can get them to buy once more from you? That’s £50 more from each customer and you only need 4 of your already happy customers to buy once more from you to replace a new customer. If you have 500 customers then  that’s £25,000 in extra sales right there. Can you see why this could be really powerful?

So how can you go about this?

If you’re in retail and you sell to consumers there’s lot of things you can do and I’m sure you’re already doing some of them. For example if you have a seasonal sale and offer extra discounts to your loyal customers. This could be enough to encourage them to come back to you for some extra bits and pieces they wouldn’t normally have bought.And might just give you the opportunity to sell something else to them while they're there.

A general one we can all use is send a newsletter to keep them informed of what’s new (or the new lines you have) and how you can solve a particular problem they might be facing. You may be able to give them some tips that will generate some thoughts about how else they can use you.

You might even be in the type of business where you can give them a call when you know they may be running out of a particular product. Or you know they have a challenging situation you could help them with. This can be used by personal services too eg hairdressers, dentists, beauticians, gyms/trainers ('hello, haven’t seen you in a while').

None of this is rocket science it’s really just looking at ways we can help customers, because after all we’re here to solve their problems in some way or another.

Next time I want to look at increasing customer spend and how you can increase your sales by solving more of their problems (and perhaps ones they didn’t even know they had!)

Who are your customers?

Do you give much thought to who your customers are? It’s really easy when first starting your business to go after anyone who will give you some money. Then after a while you find that your time is taken up with lots of customers, some profitable and a lot that aren’t. How did that happen?

If you’re in that situation what can you do about it? Take a big breath and get rid of the customers that give you most of the hassle, don’t pay on time, and want lots of discount. It’s the old 80:20 rule, 20% of your customers probably give you 80% of your profit and conversely 20% of your customers probably take up 80% of your time.

By getting rid of them you can offer the customers you do like a much better service and clear the way to attract the customers you do want. You will have more time to go back to your existing customers and tell them about the other products or services you offer and help them spend more money with you.

You can then think about who your ideal customer is and write a description of them. What do they look like, what age are they, do they have kids, how much do they earn? Whatever is relevant to building up your customer profile.

Once you’ve done that design your marketing to attract them. Your customer profile will dictate how and where you market and advertise. By the end of this process you will have a better business and you’ll enjoy serving the fantastic customers you have.

Turnover or Profit, which would you choose?

Turnover is vanity profit is sanity! You’ll always hear me saying this.Why? Because it’s easy to have £1m turnover and not much profit. You can be a busy fool, so the profit is of major importance.

Being an accountant I’m always around business people and I love to hear about their business. But as soon as I hear someone bragging about their turnover I get alarm bells ringing in my ears.

Don’t just set goals for your sales make sure you have a profit target as well.  It’s really easy to make unprofitable sales – it’s called giving it away! What’s the easiest way to make a loss? Don’t charge enough for what your doing. So make sure you’ve got a really good handle on how long things take to produce or service. Look at your whole process and what’s involved.

It can be too easy to think about your profit in terms of an hourly rate and compare that to a salary. Remember if there’s only you in the business then you can’t spend 35-40 hours a week producing or serving your customers. You’ve got admin, you’ve got quotes, you’ve got meetings!

In general, one third of your time will be spent generating the money and two thirds doing everything else. Doesn’t look quite as generous now, does it? Set your profit targets and then work out how you can get there. And if you’ve got incredibly tight gross profit margins I would look at what you’re doing and ask if it’s worth all the hard work.