How to increase sales and profits.
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So how to increase sales and profits…most, if not all businesses, want to increase sales and profits. However, the questions arise…how do I increase my sales? How do I increase my profits?
Usually, as a direct result of increasing sales, profits increase also, but not necessarily and not if you don’t plan things and keep a control on your costs.
Here is a list of steps to take on how to increase sales and profits:
Step 1. How to increase profits.
Decide how you wish to increase your profits in the first place and whether or not this does in fact involve increasing sales too. Increasing profits can be done by not touching your sales, but instead by looking at your cost of sales and your overheads.
Step 2. Increase sales too.
If in step one you have decided to increase your sales too, you then need to decide whether this is to increase your sales of existing products or services, or are you going to introduce a new line into your business.
Step 3. Add a new product or service line.
If your decision is to add a new product or service line, this can involve a fair amount of work, not least, looking into how you are going to market the new line. Some initial market research is always advisable on anything new, particularly if it is something that is completely new to market.
However, if it is an already existing line sold by competitors, then you already know that a market exists. So your work is a bit easier and can focus more on how you are going attract customers for your new range. Also you can look into how you can either make your new product or buy it at a competitive rate.
Always remember though, it is always easier to sell to an existing customer than to a person that has never bought from you, so introducing complimentary products or services is always a smart move. Your task is then to work out how best to speak to your existing customer base and get buy-in from them, before you target new customers.
Your focus here is partly about increasing your average transaction value, whereby you are trying to achieve higher sales on each client visit, either to your website, or to your store, and partly about increasing the number of times customer return. If you achieve a higher average transaction value, you will significantly increase your bottom line, and this is one of my favourite methods of the 7 ways to grow a business.
But also, achieving an increased return rate of your customers, will also have a significant impact on the profits of your business, whilst increasing your sales also.
So as a part of this step, it is not just about introducing a new product or service line, but also about trying to get your existing customers to buy this new line, at the same time as buying one of your other ranges.
The power of increasing your average transaction value in growing both your sales, but more importantly your profits, is huge and should be high on the business growth agenda.
Step 4. Increasing sales to existing customers, without introducing new lines.
If your decision in step 2 is to increase sales, without introducing new product or service lines, then you have three alternatives…sell more to existing customers; sell to new customers, or; sell more to existing customers and/or to new customers.
If you are looking to increase sales to existing customers, you are therefor looking to increase the number of times your customers return to buy from you. This is one of our 7-ways to grow a business and this can be transformational to a business.
If this is your strategy, you will need to work out how you entice your customers to return more often. It might be that you have an array of products or services, but certain of your customers have only bought certain of your lines, but not others. So it’s your job to entice them back to sample/buy your other ranges.
This strategy can be exciting, and of course, always remember it is far easier to sell to an existing customer then to sell to a new person that is not already a customer of yours.
One of the benefits of this strategy, aside from being easier to sell to existing customers, but is linked, is that your marketing costs will be lower.
Step 5. Selling to new customers or increasing your customer base.
If in your strategy you have decided to increase your sales by selling to new customers, you will need to decide upon a marketing strategy.
In the first place any sales to new customers, testimonials will be a key element of your strategy. People on the whole are suspicious and don’t always believe what others say, and in particular, with the internet it is difficult to gain trust from people.
The best for of trust building, is to get others who have bought from you to tell about their experience and about how they like either the product or service. So always put testimonials high on the list when looking to expand your customer base.
The other aspect of marketing which is key to attracting new customers, especially if you are doing any form of advertising, is to understand that people don’t read adverts…people only read what they are interested in.
Put another way, if you are writing a headline for your advert, which in many ways the most important part of your advert (apart from possibly images), the copy needs to include something that will grab the attention of your potential customer. Do not do, as many businesses do, and make the mistake of putting your company name in the advert headline. You might like the name of your business, but it will mean nothing to others.
People really only want to know…what’s in it for me…what are the benefits…or put another way, if I purchase your product or service, what am I going to get out of it. How is this going to make my life better, what is it going to do for me, is it going to make me fitter, slimmer, wealthier, etc.
There are many other aspects of increasing sales, which in tern should lead to increased profits and you could also look at the 7 ways to grow your business to give you ideas of how to increase sales and profits.
As always thank you for taking the time to read my blog and if you like what you’ve read, please share it with others.