Selling is an art, and everyone can't become a successful salesperson- it is common to hear such remarks in India (and elsewhere too), particularly about someone who has joined the sales profession recently, or a business owner, just about to begin the activity!
But what exactly do people mean when they compare sales to art? Like every profession, sales require specific skills for success; verbal communication, quick thinking, a sense of respect, and gratitude are typical qualities that help a salesperson to shine and grow. But in today's complex world of business, one needs a balanced and holistic approach not only to succeed but to survive as well.
Along with the `art’, the `science’ of selling is equally important. Without using the tools and scientific methods, managing a business is impossible – from analysis to planning and monitoring, several activities are crucial to a business. The purpose here is to find out some of the action points that may supplement the marketing head of a company or a business owner (as well as a sales professional) in making sales grow profitably superfast!
Sales profitability improves when one, or, all of the following happens:
- When the number of customers increases
- When your customers buy more each time (more significant size of each transaction)
- Higher frequency of purchase (your customers buy several times in a given period – daily, weekly or monthly)
- When the prices of your products go up
- When you can reduce costs (both direct and indirect)
Successful companies work out action plans, strategies with a single-minded focus on customers. They (customers) are everything for a business, and sales link customers to a company.
Let us now look at some of the actions and strategies that may influence 2X sales profitability. While plans are specific to companies and businesses, we review the general ones for a conceptual understanding of increasing sales profitability. Then, you can decide on the suitability of the concept for your firm.
Ten Tips for Improving Sales Productivity
1. Always keep the sales goal in mind
For a large corporation, the top management, the owner of a small business, must focus on the revised sales target to accelerate growth.
2. Empowering the sales team
Everyone in the company connected with sales must have explicit knowledge of competitors, products, logistic arrangements, after-sales, and more. Besides competitors, a thorough understanding of the company's products/services is necessary.
Good knowledge of products and competitors helps in converting prospects into customers.
3. Team motivation
Motivating the team is an important action for achieving higher than market growth (in companies without a sales team, this is applicable for the owner or the individual responsible for sales).
Recognition of performance, public praise do wonders to increase motivation. Other measures may include incentives, rewards.
4. Creating more productive time for your team
Using technology can reduce monotonous work like routine reports, replying to customer emails; surveys indicate that companies with automated sales processes have a higher productivity per salesperson.
5. Focus on existing customers
Proper analysis of buying patterns and some research can help increase sales from your existing customers.
Find out the customers who are not using (or buying) all your services/products. Then, approach them in an organised way with your entire range of items. In a retail business, a more comprehensive display of things leads to higher sales.
You can use referral discounts to attract new customers through your existing ones. Several studies have proved that for many items, word of mouth works best. An appreciation gesture like freebies and discounts works well with regular clients.
6. Price, schemes, and discounts
Price is a sensitive and complex factor for any management. A straight reduction may not give you the desired increase in sales. Customers perceive price and quality as related factors, and thus, a price reduction may not lead to higher sales.
Discounts and offers are an integral part of marketing, and companies utilize this strategy for short-term gains.
When the objective is a rapid increase in sales, schemes may be an effective model. However, the discount presentation is critical, and customers must see it as an incentive for them (and not as a stock clearance measure).
A price increase also will lead to higher sales if the company is confident of retaining the earlier sales volume. Pricing, however, depends largely on market conditions, and a company must avoid being out-priced (in the market) under any circumstances.
7. Increasing sales channels
When an existing store opens a new outlet at a different location, starts a home–delivery service, or sells directly to an institution, they increase the revenue stream.
Advanced technology today has opened many doors for small businesses, and a small company can sell products and services online globally. Collaborating sales with a complimentary item, affiliate sales are new channels to explore for achieving sales growth.
8. Energise your marketing campaign
Marketing and increase in sales go hand in hand. Product promotion is a prime necessity in the present market scenario but selecting the type of promotion that suits your business is critical. It is best to take professional guidance for results if required.
Digital channels like a website, PPC, email marketing should be used for a renewed campaign to attract new customers.
A proper survey to identify your prospective customers will increase your marketing spend's effectiveness by audience-focused communication.
Traditional channels, like outdoor, in-shop, news media, should be considered; when allocating the promotional budget, the company should keep in mind the objective (maybe a 2X sales growth in one year!
9. Monitoring and control
A robust monitoring system is a primary requirement for a company attempting a higher than average sales growth. The internal system should be in sync with the practices in the company but must be quick enough to highlight individual achievements and deviations from the target.
The objective of the monitoring has to be a prompt evaluation of strategy and performance and course correction for immediate improvement in areas of under-performance.
10. Cost Reduction
Economies of scale reduce input costs for a company with higher sales volume. The management needs to work out the probable cost reduction against the higher sales.
At the outset, making the sales of your company 2X profitable may appear as a daunting task. But business is scalable with the right inputs at the opportune time. Whether a large company or a small business, the correct strategy can lead a company to the desired level of success.
A focus on sales is crucial, being the primary channel for improving profitability. On the other end, the company's promotion strategy should utilise the product features and benefits, and expertise to build customers’ intent, desire, and credibility. A few business tips may make the task a little simpler.
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Q. How can a business increase profits quickly?
Ans. Profits can go up only for two reasons – a) increase in sales and b) reduction in costs. Achieving either will require proper planning and dedicated efforts.
Q. How to improve the profitability of a 10-year old retail store?
Ans. An established store will have a regular clientele. Therefore, you can look at the following suggestions:
1. Try to increase the unit purchase value of each customer. This means selling more items to a customer on each visit to your store. It may not be challenging to implement – you can request the customer to buy one or two low-value items. Even if you succeed with half of your customers daily, it will generate reasonable additional sales (and profits) at the end of the month.
2. Review your stocks and remove old and unprofitable items. Use the space for high traffic stocks.
3. Consider sales extension by way of home deliveries. You can find new customers and also provide better service value to the existing ones.
Q. My sales are growing – how can I reduce overheads and focus more on sales development?
Ans. Using technology to reduce overheads is one solution. For example, you can shift to digital accounts, which will take care of all your accounting requirements, debtors, creditors, and the like. Low-cost digital accounting solutions are readily available online, and you can choose the one which meets all your needs.
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