How to Increase Gross Sales
To increase sales work on three areas in marketing: number of prospects, the closing ratio and the average transaction value.
For example in this monthly scenario. A business gets 200 prospects, has a closing ratio of 20% and an average transaction of $1,000
200 prospects x 20% closing ratio = 40 customers x $1,000 average transaction = $40,000
If a business goal is set to increase gross sales by 20% or $40,000 x 20% = $8,000 . Total gross sales will be $40,000 +$800 = $48,000
When I consult with a business owner I explain that what we can do is increase the marketing goals by 20%. Watch what happens to gross sales when I increase prospects by 20% , closing ratio by 20% and average transaction by 20%.
220 prospects x 24% = 52.8 customers x $1,200 average transaction =$63,360. I beat the business goal by $15,360 or 32% .
Let’s now look at each area and see how the increase occurs. The increase in prospects can be achieved in a variety of ways but simply stated increase the traffic to the business and capture it. The closing ratio can be increased with training or coaching on listening and decoding the buying strategy of the prospect. The transaction value can be increased by increasing any or all of these factors per customer : number of transactions, number of items, cost per item.
This is what we focus on as the key performance indicators. All metrics flow into these indicators.