9 steps to calculate your sales and marketing ROI

You may be wondering how to calculate your sales and marketing ROI. If you are not a sales manager or unfamiliar in setting sales targets this might be of value to you, especially if you are used to marketing metrics and ROI only.

For a fully aligned sales and marketing approach, you need to ensure that the ROI and metrics you are using make sense. The accountability of marketing to sales AND sales to marketing needs to be agreed upon as a vital component of the overall strategy.

We believe the only real way to ensure the sales and marketing ROI is tangible is to measure common metrics. To start the process, reverse engineer your sales objectives and flip your full funnel upside down from your desired sales (bottom of funnel) first right through to marketing (top of funnel) to determine the required marketing budget and lead activity required to help achieve your sales target.


1. What is your sales target?

What is your annual revenue target for the financial year? This can be broken down into annual, quarterly or monthly measurement for tracking.

2. What is your required sales pipeline?

Depending on the product and services you are selling, from historic performance and average trends, how many qualified deals do you need in your pipeline at any one time to reach your sales goals?

A typical rule of thumb is 3x to 5x times pipeline value in order to reach your sales quota.

3. What is your average sales cycle?

How long does an average sale take to close?

4. What is your average deal size?

What is the average dollar value of your typical sale for your product or services?

5. How many proposals and quotes do you need to deliver?

Simply divide your sales revenue by the average deal size to get an estimate of how many quotes/proposals you need to send out.

6. How many Sales Qualified Leads (SQL) do you need?sales-marketing-alignment

The definition of a SQL is based on what your sales team will accept as a qualified lead

Typically we work off a 3x times ratio for SQLs to quotes/proposals issued after sales engagement.

7. How many Marketing Qualified Leads (MQL) do you need?

The definition of a MQL is based on what marketing generates from a cold lead prospect.

Typically we work off a 3x times ratio for MQLs needed to generate enough SQLs – i.e. one in every three MQLs will progress to be accepted as a SQL.

8. How many lead prospects do you need?

In order to generate sufficient MQLs, we work off an average of 3x times leads and prospects to create and qualify MQLs through the nurturing and generation process during initial qualification.

This is normally generated from digital marketing metrics or event attendance metrics like web visitors, CPC, Google Adwords or forms submitted.

9. What is the cost of your marketing campaign needed?

By working through the sales and marketing alignment process, this will highlight how much marketing budget and investment is required to support your sales team and targets, and ultimately company revenue goals.

Summary

What period of time do you need to generate a return from marketing to sales?

We typically measure and report on a quarterly or monthly basis from a starting position of your annual target or financial year target.

Working through this process will either identify an alignment or misalignment between sales and marketing, in either, or both directions. sales-and-marketing-ROI

As an example, we worked with an IT industry client through this process, where we found there was at least a 50% gap in marketing investment to support their annual sales target of $1M – the BDM didn’t have the marketing support or budget needed to hit their sales target for the year.

This alignment process is helpful to demonstrate to executive management when planning out your sales and marketing strategies with goal setting. Working with, and to, the sales and marketing ROI required for writing the business case internally will help identify and justify whether to allocate towards either sales headcount or marketing activities.

 ROI = Sales Revenue/Profit Generated MINUS Cost of Marketing Investment DIVIDED by Cost of Marketing Investment X 100%

            An example:

Sales calculator ROI example

 

4 Key benefits of Inbound Marketing for lead generation

How can Inbound Marketing generate more leads consistently?

Inbound marketing may still be a new term to you, or it might sound familiar without you knowing quite what it means, and how it interacts with a traditional marketing model…

Inbound marketing is an approach focused on attracting customers through content and interactions that are relevant and helpful — not interruptive. With inbound marketing, potential customers find you through channels like blogs, search engines, and social media.

Unlike outbound marketing, inbound does not need to fight for potential customers attention. By creating content designed to address the problems and needs of your ideal customers, inbound marketing attracts qualified prospects and builds trust and credibility for your business.

 

Inbound-marketing
Quoted Source: https://www.hubspot.com/inbound-marketing

So what are the benefits of inbound marketing for lead generation, as a part of a broader marketing strategy and investment?

Here are some key areas to consider in generating leads with an investment in inbound marketing:

  • Organically sustainable higher quality lead generation

Inbound methodology is proven to increase digital online engagement from targeted prospects, throughout the stages of landing page visits to contacts to converting to customers. The ability to track and report allows for an automated lead generation method that reduces inefficiencies and the higher costs associated with traditional outbound marketing methods. As well as the cost savings, inbound marketing ensures time and people resources are used more efficiently and with higher rates of success.

Inbound process offers content-driven insights to help make ongoing assessments on digital marketing campaign budget and ROI across different social media channels. Once published, online content does not have an ‘expiry date’, and with some repurposing and shaping, the material can be designed to appeal on an ongoing basis to the target audience.

The most common challenge in the lead generation process is to gain more new contacts in order to generate more qualified lead conversions. Customizing content and writing towards a target persona or audience can initiate a new source of contacts and leads, including from new markets where you had no previous reach.

An example of this from one of our clients’ scenarios of where the content mapping process is key can be found here: Case Study: Digital Marketing Automation Process Improvement

Typically inbound content development needs to be an ongoing, organic approach to lead generation marketing, which complements other forms of marketing activities and channels. We recommend testing a campaign across three to six months in order to gain momentum, target, and track to establish a benchmark of KPIs and/or lead generation. Once the campaign and internal process is refined, then firmer KPIs can be determined.

  • Marketing automation streamlines lead generation process

Traditionally the cost of outbound telemarketing methods present a low rate of return, is resource intensive, and largely timing based for a push approach.

Digital marketing automation is the vehicle for delivering an inbound marketing strategy that eliminates the higher overheads of a traditional outbound call centre resource. It is less invasive and more personalised, and better suited to modern consumer behaviours throughout the buying journey.

Automated tracking of marketing activity provides historic reporting as well as selected and more personalised outreach strategies to attract the ideal prospects. These days, the key to marketing effectiveness is utilising data analytics to determine what is working and what is not, and presenting the data to enable management to make informed decisions about sales and marketing engagement, resourcing and budgeting process to drive growth.

  • Higher ROI from inbound marketing

Ongoing research supports the suggestion that inbound marketing automation generates a higher ROI than traditional outbound campaigns. Companies are 3x as likely to see higher ROI on inbound marketing campaigns than on outbound.

Inbound marketing is the dominant marketing strategy for companies with fewer than 200 people and has delivered proven higher ROI.

84% of small businesses are predominantly using inbound marketing.

Digital-Readiness-Assessment
Data from State of Inbound Marketing 2015
  • Reduced overheads from sales resourcing.

It’s typically challenging enough to secure or allocate budget in a sales and marketing department, or to justify a business case unless there is a guaranteed ROI.

The cost of headcount and FTE for experienced sales resources is prohibitive for many, considering both cash flow and timing-wise with a chicken and egg approach… do you build capacity and they will come, or sell first and build sales and marketing resourcing as you need it?

A transfer of budget to a highly targeted inbound marketing campaign may alleviate some of these challenges and disconnect, while delivering consistently well-qualified leads without the resource heavy requirements of the traditional outbound approach, and in turn a higher ROI. Inbound creates a smoother lead generation, nurture and handover process across the marketing and sales functions, and a more streamlined buyer’s journey.

For an independent review of one leading marketing automation tool in the marketplace, please read  Independent Review – Hubspot Marketing Automation Tool.

For an obligation free discussion or assessment on how inbound marketing could help boost your lead generation strategy and increase ROI, feel free to contact us at info@alchemiseconsulting.com

Digital-Readiness-Assessment

Selecting Marketing Automation Tools – An independent review of HubSpot

Alchemise Consulting would like to acknowledge and thank you to our guest independent reviewer Jamie Strachan for providing this article.


One of the key technology trends of 2016 in small-to-medium enterprises (SME) is the increasing adoption of sales and marketing automation tools to help businesses retain and grow their customer base and increase sales revenues.

A recent SME Directions survey suggests that more than 60% of businesses plan to use automation technology in the next financial year to help cut costs and streamline existing processes. 

A benefit of this technology is enabling businesses to better understand their growing volumes of customer data with the use of customer relationship management technology (CRM), SEO and online and social analytics. This in turn helps to identify buying trends, devise targeted campaigns and revise and improve inbound sales and marketing strategies over time.

Marketing automation tools allow both marketing and sales teams to work together more seamlessly. A lot of manual processes around content creation, management and personalisation are removed, while creating more qualified and targeted leads for sales reps to engage with. Lead and customer data is updated and shared by both teams and stored in the CRM.

According to Forrester Research, companies that implement marketing automation experience a 10% increase in their sales pipeline contribution.

HubSpot, a US-based company, is looking to lead the way in this market with a cloud-based platform offered to SMEs.

5 Benefits of the HubSpot offering:

  1. For small businesses needing an “all-in-one” online strategy, HubSpot will host your site, publish landing pages and blog content, while optimising it for search engines with keyword research relevant to your content and market.
  1. Manage your social media presence (Facebook, Twitter, Instagram) with scheduled posts, and report on brand mentions and social engagement with your content and services.
  1. Grow your inbound audience by creating simple search and social media advertising all from within the HubSpot dashboard. Track and optimise your ads as you go to increase your traffic and conversions.
  1. Create targeted email campaigns to new and existing customers with strong call-to-action (CTAs) offers.
  1. Use HubSpot’s native CRM or integrate with Salesforce to track engagement with your campaigns, CTAs, and record all customer interactions with plug-ins for common email clients. Integration to your existing CRM via the HubSpot API is also available.

HubSpot in the Cloud

Taking advantage of the today’s growing Platform-as-a-Service (PaaS) offerings, HubSpot has built a robust, secure and highly-available service for its 18,000 plus customer base.

Basic HubSpot CRM subscriptions are free for up to 100 contacts. As extra functionality is added for content creation, analytics, optimisation, CRM integration and more, subscriptions can range from AUD $300 – $3000 per month.

With digital strategy becoming evermore critical to business success and revenue growth, HubSpot offers a compelling turnkey solution for traditional small business content management and hosting. Added to this sophisticated inbound strategies, marketing and analytics provide the secret sauce that can add real business value, grow the bottom line and makes sales teams and marketers more productive.

Please contact us if you would like to continue the conversation about marketing automation and inbound marketing, and how it can help to grow your business.

Thank you once again to our guest independent reviewer Jamie Strachan for providing this article.

For further information about the current data and future of sales and marketing, feel free to register to download your FREE copy of the State of Inbound 2017 Report published by Hubspot.

State of Inbound 2017 Report

 

 

3 Business Challenges for Small Business Owners – The PROFITABLE Approach

Three of the biggest business challenges for small to medium enterprises (SMEs) are 1) cash flow, 2) access to resources and expertise in this fast paced and dynamic market. The third challenge is 3) scalability and how to grow the business in a structured planned way.

Freelance and project-based contractor approaches are becoming more widely used as the market shifts away from the traditional employee model. The need to access specific skillsets, often for a short period of time, is driving a more dynamic strategy to staff and resourcing.

In a very competitive and commoditised environment the cost of employment can prove prohibitive to scale and growth for SMEs. Recruitment fees, poor-fit staff, superannuation, and additional staffing overheads all contribute to operational costs, and impact actual net profit.

In order to solve complex challenges, we believe that a project-based model that is cross-functional can provide a pathway to achieving business outcomes, while working from the same client value set and beliefs.

We acknowledge that the traditional consulting model relies on a top-heavy assessment and recommendation approach that can prove costly for SMEs, so we function to deliver specific outcomes through tight scoping and a shared risk model. This offers access to and collaboration with a team of globally experience senior executives from the CxO management level.

As the end of financial year approaches, we know internal resources are limited. A locally delivered augmented strategic or tactical project can help to ensure that day to day challenges, as well as critical issues, are addressed and resolved. Whether you need resources in IT, HR, marketing, sales or finance and operations, we can customise a consulting engagement that suits your desired outcome using a shared risk value proposition.

For an initial obligation free consultation on how our independent advisory services can assist with a low cost approach, please visit www.alchemiseconsulting.com or contact us via info@alchemiseconsulting.com or call +61 39225 5022 to speak with one of our senior consultants.

Increasing your return on marketing investment for sales growth

“Want to increase your return on marketing investment? It’s All In Your Mind…”

Too many business people and marketers remained grounded in one-dimensional thinking habits. Marketing is a tool of the mind, and it’s in the mind where true wealth is made. Before this starts to sound like some kind of New Age lecture, let me give you an example of what I mean.

Let’s say you mail a sales letter to 50,000 people at an average cost of $1 each, for a total cost of $50,000 – That’s a fixed cost. If you get a poor response and only manage to break even then there is a strong tendency for you to give up and say: “Why should I spend $50,000 and go though all that work, only to break even?”

If by scientifically changing and testing a few characteristics of the mailing piece you are able to multiply the response by five, fifteen, fifty or even five hundred times then you are using leverage. The concept of A/B testing for digital marketing or trial and effort is part of the marketing lead generation strategy as an art and science.

How To Massively Boost Your Response…

The sales letter that broke even has the potential for almost infinite change. It’s highly likely that something in the sales letter can be improved to increase response. Often, simply using a stronger opening headline, or making a better offer in the body copy of the letter, a bonus, or trying a different price, can increase response dramatically.

By improving the content of the sales letter, and doing it successfully, you employ the leveraging action of marketing. You’re still sending a sales letter – but it’s not about the physical tool. It’s about the infinite possibilities impregnated in the marketing concept carried by that tool.

How To Never Run Out Of ‘Marketing Budget’

Other than available cash flow, there should be no such thing as a marketing budget. It is a ridiculous idea based on the assumption that marketing is a cost rather than a revenue generator, so the return on marketing investment should be seen a key indicator for sales growth.

Here’s why:

If an ad costs $1,000 and the revenue generated from the ad is $1,200, why would you stop the ad just because your budget dictated it? With a scientific approach and providing the cash is available, the marketing budget is unlimited. It is self-generating. Understanding this self-evident truth is the key to marketing leverage and massive business growth.

Your can never truly run out of ideas. In marketing, persistence almost always pays off. Marketing ROI can leverage a losing or a bland idea into something spectacular – if you have what it takes to make it happen. It’s all about thinking out of the box!

Alchemise Consulting is able to assist with “thinking out of the box” marketing campaigns and drive profit multipliers for stronger sales growth.

To learn how you can grow your sales with the 7 profit multiplier method, click here below to register for your FREE E-Book or our recent blog article

Feel free to comment, follow our Company Page if you liked this post or contact me to discuss any specific needs.  www.linkedin.com/company/alchemise-consulting

http://bit.ly/2nZCapG

 

 

How sales and marketing alignment can increase your revenue by 208%

Alchemise Consulting recently was interviewed by Thirst Creative on How Sales and Marketing alignment can increase your revenue by 208%.

‘The digital and online world has changed the way prospective buyers engage with your brand to be more personalised and direct. Hence the marketing funnel has deepened and so has most of the buying cycle before sales engage. Meaning sales now engage much later in the sales process.’ – Chak Ng, Managing Director of Alchemise Consulting

Please see the article writeup and also as a guest speaker at the “If you build it, will the come” event hosted by Thirst Creative here.

Sales and Marketing as a Service

 

How to increase your business gross profits using the 7 profit multipliers way

Business gross profits is usually the key indicator of performance and new business development activities and sales.

It is a sad truth that 80% of businesses fail in their first five years of operation, and one 1 in 25 will survive their first ten years.

The main reason is because they don’t have enough customers buying from them regularly – they simply run out of cash.

  • They don’t attract a sufficient number of qualified prospects;
  • They fail to convert their prospects into profitable customers;
  • They let their current customers slip away to do business with their competitors.

So, the only way to succeed in business is for the owner to have a clear understanding of the market for its products and services.

  1. Lead Generation – Getting more qualified leads

Before a person becomes a customer, they are merely a name, a lead. A customer is someone who has made an actual purchase. A lead in merely a potential customer. A prospect. The more leads or prospects you have, the more you can convert into paying customers.

How do you get more prospects?

There are many methods:

  • Advertisements
  • Direct mail campaign
  • Referral program
  • Internet marketing
  • Promotional techniques
  • Joint venture arrangements, and many, many more.

Because the choices for finding more prospects are many — and not all created equal — choosing the correct ones becomes a prime area of concern.

  1. Improving Conversion Rate – Turning more prospects into customers 

This means a higher percentage of sales based on people served. For example, if a company were averaging 20 sales per 100 people contacted, a worthy goal would be to increase sales to 35 or 50 per 100 prospects.

There are ways to make this happen: Improved telemarketing scripts, more attractive offers, testing different prices, improving quality, and more.

  1. Increasing Average Sale Value – Creating repeat customers

One of the Holy Grails of marketing excellence is the repeat sale – or more specifically, creating repeat customers who come back to buy again and again. Far too many businesses ignore this simple-to implement, common sense strategy to boost profits.

Repeat sales are sometimes called “back-end” sales. For many companies, sales on the back-end are where the true profits are made. For many companies, first sales may generate little or no profit, or even a small loss. This is sometimes called a “loss leader.” It’s a low-profit sale designed with an eye on making real money on the second and third sales. But whether one makes a profit on the first sale, or not, getting more sales after a first is a major key to higher success in marketing and selling.

  1. Increasing Gross Profit Margin – Getting the most out of every transaction

It takes a certain amount of time and effort to make each sale. Why not squeeze more out that transaction while the customer is in the process of buying? It’s easily done. For example, if a customer buys a shirt, he may also buy a tie at the same time – but the customer is far more likely to do so if actively prompted by the seller. Suggesting an additional sale at point of purchase is called ‘Cross-Selling’. A cousin of Cross-Selling is ‘Up-Selling’. An example: “You can get the larger soft drink for just 25 cents more. It’s a better value.” The idea is to prompt the customer to buy a larger size, amount, etc.

Profits can be increased with each sale by manipulating packaging, whereby the customer pays slightly more but gets an item of extra value.

The small amount of extra profit obtained from each sale represents a higher level of profit because no extra money needs to be spent on marketing. Even in packaging deals where premium products are given away, special deals from wholesale suppliers can make the extra giveaway items well worth the cost because of increased overall sales and mark-ups.

  1. Increasing the Number of Purchases – Create a lasting relationship

When customers buy an initial product from a company, and that products delivers value, benefits, and enjoyment to the purchaser, a good company should feel obligated to sell that person more, to improve that customer’s life even more. If a company is proud of the products it sells and the customer agrees that the company delivers high quality, all sides win if more purchases are made.

What if the company has no additional products to sell a customer who has been sold once? The obvious answer is that efforts should be made to obtain second-tier products. But if this is not immediately feasible, the original seller can refer the customer to another non-competing company who may have something the customer can use. Why make the effort? What’s in it for the original seller? Among other reasons, it’s a terrific opportunity to build good will with a future potential joint venture partner. The second business may often return the favor and send new customer back to the original seller. Finally, an arrangement can be made so that a commission or profit share is provided.

  1. Increasing Lifetime Value – Know what each customer is worth to you

In knowing the ‘lifetime value’ of your customers tells you scientifically how much you can spend to acquire new customers.

What is the ‘Lifetime Value’ of a customer?

‘Lifetime Value’ is the true Total Worth of a customer to you.
To maximise your customers’ lifetime value, consider the following contributing factors:

  • Average purchase value
  • Average number of times they buy in a year
  • Average number of years they remain your customer
  • The monetary value of their referrals.

Knowing this customer value can not only help you better understand and achieve sales and revenue targets; knowing this value can also help you to strategically structure your marketing budget.

  1. More Referrals from Customers – Leverage the power of your customers

As much as 90 percent of new business comes through referrals of new customers made by existing customers. Providing extra value, referrals cost next to nothing. Referrals are powerful because it’s an endorsement of a product from a trusted source – a friend, colleague, or acquaintance – not a advertisement which has been specifically constructed to make you think or feel a certain way about a product or service.

Consider how businesses can ‘distribute’ their brand:

  • Single Channel of distribution – Most businesses typically rely on one method of generating income from direct sales and hence time versus effort is the limited factor to achieving massive results.
  • Multiple Channels of distribution – This provides instant leverage and multiple income streams to boost sales revenue and profitability from a lower cost base exponentially than linearly.

Based on limited resources and investment in overheads this is far more effective to select complimentary channels to help grow your business. With every referral obtained the growth potential is increased by the number of channels who are active.

Summary

Increasing just one of these profit multipliers will help your business to grow organically with existing clients and help acquire new clients.

Increasing all of these multipliers by just a small margin will exponentially skyrocket your bottom line profits and should be considered as part of your sales strategy.

To have a further discussion about improving your business’ sales profits, and to better understand how to implement these strategies effectively, please contact us for an obligation-free conversation or register for our FREE business growth assessment.

http://bit.ly/2ndtwXt

Sales Growth Tip #6: How to Leverage the Power of Profit Multipliers

It is a sad fact that 80% of businesses fail in their first five years and over a 10 year period 24 out of 25 businesses fail. Why, because they don’t have enough customers buying from them on a regular basis.

The main reason is because they dont have enough customers buying from them regularly! They literally run out of Cash…

  • They don’t attract a sufficient number of qualified prospects.
  • They fail to convert their prospects into profitable customers.
  • They let their current customers slip away to do business with their competitors.

So, the ONLY way to succeed in business is for the owner to have a clear understanding of the market for its products and services.

The REAL Purpose Of A Business… The main function of any business is the acquisition of new customers and fulfilment of current customers needs to make a PROFIT.

So, regardless of the type of business, market, products or services:

ALL businesses are Sales & Marketing businesses.

…Because its purpose is to create a customer, the business has two – and only two – functions; marketing and innovation. Marketing and Innovation produce results, all the rest are costs.”

Peter Drucker

Reality No. 1. Having a ‘great’ product or service alone will not achieve success… BUT a ‘quality’ product or service marketed in a superior way WILL GUARANTEE your success.

Reality No.2. The KEY to a profitable business is to successfully implement effective and affordable Marketing and Innovation.

Alchemise Consulting looks at Simple And Scientific Principles That Can Help Nearly Any Company Double Revenues And Profits Within 12 – 18 Months.

As part of the focus, businesses need to focus on proper priorities:

  • Market Share: Focus on numbers –getting more customers
  • Wallet Share: Focus on customer penetration – filling all their needs

The quickest, easiest, most inexpensive road to growth and profits is to concentrate on:-How much, how many, and for how long can you sell to each of your customers?

If you are not leveraging off this focus and leverage around these 7 Profit Multipliers with your clients then you are losing sales revenue and increased profit margin per client to your competition and not adding significant value.

There is a limit to how much you can CUT COSTS before quality and service is affected.

Therefore, it makes sense to use LIMITLESS STRATEGIES: The principal of Business Growth Multipliers- ‘7 profit Multipliers

1. Lead Generation – Getting more qualified leads

Before a person becomes a customer, they are merely a name, a lead. A customer is someone who has made an actual purchase. A lead in merely a potential customer. A prospect. The more leads or prospects you have, the more you can convert into paying customers. How do you get more prospects? There are many ways: Ads, a direct mail campaign, a referral program, Internet marketing, promotional techniques, joint venture arrangements, and many, many more. Because the choices for finding more prospects are many — and not all created equal — choosing the correct ones becomes a prime area of concern.

2. Improving Conversion Rate

This means a higher percentage of sales based on people served. For example, if a company is averaging 20 sales per 100 people confronted, a worthy goal would be to increase sales to 35 or 50 per 100 prospects. There are ways to make this happen: Improved telemarketing scripts, more attractive offers, testing different prices, improving quality, and more.

3. Increasing Average Sales Value

One of the Holy Grails of marketing excellence is the repeat sale – or more specifically, creating repeat customers who come back to buy again and again. Far too many businesses ignore this simple-to implement, common sense strategy to boost profits. Repeat sales are sometimes called “back-end” sales. For many companies, sales on the back-end are where the true profits are made. For many companies, first sales may generate little or no profit, or even a small loss. This is sometimes called a “loss leader.” It’s a low-profit sale designed with an eye on making real money on the second and third sales. But whether one makes a profit on the first sale, or not, getting more sales after a first is a major key to higher success in marketing and selling.

4. Increasing Profit Margin

It takes a certain amount of time and effort to make each sale. Why not squeeze more out that transaction while the customer is in the process of buying? It’s easily done. For example, if a customer buys a shirt, he may also buy a tie at the same time – but the customer is far more likely to do so if actively prompted by the seller. If the salesperson does not ask for an additional sale, the customer is far less likely to make one or even think about it. Suggesting an additional sale at point of purchase is called ‘Cross-Selling’. Fast food restaurants have made billions with the Cross-Sell strategy. Buy a hamburger and the worker says, “Would you like french fries with your burger?” A cousin of Cross-Selling is ‘Up-Selling’. An example: “You can get the larger soft drink for just 25 cents more. It’s a better value.” The idea is to prompt the customer to buy a larger size, amount, etc.

Profits can be increased with each sale by manipulating packaging. Fast food restaurants are again on the cutting edge of this method. They offer toys, glassware or something else with the purchase of a basic meal package. The customer pays slightly more but gets an item of extra value.

The small amount of extra profit obtained from each sale represents a higher level of profit because no extra money needs to be spent on marketing. Even in packaging deals where premium products are given away, special deals from wholesale suppliers can make the extra giveaway items well worth the cost because of increased overall sales and mark-ups.

So remember: Cross-Selling, Up-Selling, Added-Value Packaging

5. Increasing the Number of Purchases

When customers buy an initial product from a company, and that products delivers value, benefits, and enjoyment to the purchaser, a good company should feel obligated to sell that person more, to improve that customer’s life even more. If a company is proud of the products it sells and the customer agrees that the company delivers high quality, all sides win if more purchases are made.

What if the company has no additional products to sell a customer who has been sold once? The obvious answer is that efforts should be made to obtain second-tier products. But if this is not immediately feasible, the original seller can refer the customer to another non-competing company who may have something the customer can use. Why make the effort? What’s in it for the original seller? Among other reasons, it’s a terrific opportunity to build good will with a future potential joint venture partner. The second business may often return the favor and send new customer back to the original seller. Finally, an arrangement can be made so that a commission or profit share is provided.

6. Increasing Lifetime Value

In knowing the ‘lifetime value’ of your customers tells you scientifically how much you can spend to acquire new customers.

What is the Lifetime Value of a customer? 

‘Lifetime Value is the true Total Worth of a customer to you! It is:

  •  Average purchase value x Average number of times they buy in a year x Average number of years they remain your customer + the monetary value of their referrals.

7. More Referrals from Customers

Established business owners know that as much as 90 percent of their new business comes through referrals of new customers made by existing customers. Better yet, referrals cost next to nothing. A referral is simply an existing customer telling a friend about a product they bought from X Company, prompting that person buys from X Company as well. Referrals are powerful because it’s an endorsement of a product from a trusted source – a friend, colleague, or acquaintance. People automatically distrust ads, for example, because they believe that most ads contain a least some hype, if not outright falsehoods. Not so a referral from a trusted friend. There are specific methods you can employ to encourage customers to make more referrals than they would normally do.

  • Single Channel of distribution – Most businesses typically rely on one method of generating income from direct sales and hence time versus effort is the limited factor to achieving massive results
  •  Multiple Channels of distribution – This provides instant leverage and multiple income streams to boost sales revenue and profitability from a lower cost base exponentially than linearly. Based on limited resources and investment in overheads this is far more effective to select complimentary channels to help grow your business. With every referral obtained the growth potential is increased by the number of channels who are active.

Profit Multiplier summary:

Increasing just one of these profit multipliers will help your business to grow organically with existing clients and help acquire new clients.

BUT by increasing ALL of these Multipliers by just a small margin will exponentially skyrocket your bottom line profits!

For a confidential discussion around these profit multipliers and how they can help with your business, please contact Alchemise Consulting to understand how we can tailor effective sales strategies to help achieve your profit goals.

Profit Multipliers

———————————————————————————————–

Our business is to help you grow your business and maximise your sales profits”

Chak Ng- Director, brings over 17 years experience with strategic sales, business consulting, business development management and marketing expertise. He also has specific global experience within ICT and Telecoms markets with leading organisations such as Ericsson, IBM and Singtel-Optus. He is able to provide strong insights and innovative approaches in developing and implementing effective business growth strategies with sales models and systems dealing directly with business owners or key stakeholders.