Increasing Profits with Sales Conversion
My focus is helping you achieve your business goals – be that a certain profit level, a quality of life or the ability to sell the business and retire. For any of these goals, creating a consistent, high level of profits is critical. So last week we started reviewing the 5 Steps to Increased Profits framework – focusing on one of the five steps each week.
As a review, the five key profit-generating metrics are: Lead Generation, Conversion Rate, Average Dollar Sale, Average Number of Transactions, and Profit Margins.
I’ve highlighted the five keys in the following equation:
Lead Generation
x
Conversion Rate
=
# Customers
x
Avg. Dollar Sale
x
Avg. # Transactions
=
Revenues
x
Profit Margins
=
Profits
This week we’re focusing on Sales Conversion Rate – this is the percentage of your leads that you convert into customers. If you focus on increasing your sales conversion rate, you won’t need to spend more on generating more leads. It’s a much more cost-effective way to increase profits. Over the past 20 years in which ActionCOACH has been working with business owners, we have developed over 80 ways to improve your sales conversion. Here are my top seven:
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Written Guarantee:
What are your customer’s key frustrations in buying from you, or from your industry? What could you guarantee that would eliminate or reduce the risk of that frustration? For example, a hairdresser that guarantees ‘you will like your haircut and so will 98 per cent of your friends’. For an attorney the guarantee could be a fixed price — You’ll get for patent filed for $5k.
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Use Sales Scripts:
These are absolutely essential whatever business you’re in. Once you find the right (or very close to right) way to sell something to someone, why change it? Write down exactly what you said, and then do that every time. And make sure your team does the same. Every customer is different, but the objective is always the same: match the product to the buyer. You should have scripts for everything – from answering the phone to saying good-bye.
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Define Your Unique Value Proposition:
This one is critical. If there’s nothing different about you, people will only buy from you because of convenience, or price, nothing more. Added to that, you’ll never be able to raise your prices; if there’s anyone doing it cheaper, people will buy from them. You need to work out what is special about you, and then articulate it clearly and communicate it loudly.
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Benefits and Testimonials:
Create a sheet (and a page on your website) that you can give to every person who meets with you. It contains the 4 most important benefits of your product, or the 7 reasons yours is a better choice for them. It should include testimonials – that is, direct quotes from your past customers about how good you are. A video testimonial is the most powerful way of communicating all that you do for your customers. If you say it about yourself it’s a lie, if someone else says it about you, its true.
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Use a Defined Sales Process
In order to determine the optimum way to sell to your customers, you have to create a process to do it consistently. Only then can you find the best way. If you’re always shooting from the hip, or your sales team is all doing something different, you’ll never know what works the best to generate the most profit.
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Provide Something Extra:
To seal the deal, throw in something they didn’t expect – something that gives them the perception that they are getting a great deal. Then place a time limit on it, which pressures them into making a decision. Make sure it’s something that they will value highly which doesn’t cost you very much — i.e.: high perceived value, low cost to you.
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Provide Quality Products:
People will buy quality when it’s affordable and they perceive a high value. Sell value not price. By providing the best, you put yourself a cut above everyone else.
To learn more about the 5 Steps to increased profits, come to one of my seminars or workshops.