In a tight economy, a complaint we are hearing from business owners is customer fear of spending and the time it takes to achieve a sale. So, what can you do to overcome their fears and speed up the sales process?
Sell the solution not the product
Branding is wonderful but unless your brand is mighty and instantly recognisable, it’s unlikely people will purchase what you have based on brand alone. It’s more important than ever to have clarity about why your product or service is valuable to your customer/client, and why they should be buying it from you and not your competitor – or online!
Solution selling is a process where you holistically consider your customers’ needs and recommend specific products/services to best accommodate or alleviate the individuals’ problems or concerns.
You must also take time to consider how you differ from your competition and why you are the best choice. This can be difficult as the product can be purchased cheaper online, but could there be value add benefits to purchasing from you that an online store does not offer?
Sell the savings/benefit
Does your product offer any form of efficiency gain or added benefit? Can you justify it with real examples such as testimonials and worked examples/results? If it does, you need to ensure that you articulate and deliver this message to potential customers.
Try and stay away from long range forecasts. If it is going to take a few years to see the real value, this is not a compelling selling point in the current market.
Value added discounts
Discounting is a common strategy to increase sales, but it comes at the cost of your margin. If you are going to discount, do it strategically.
In tough economic times, it’s common for the volume of products purchased by customers to go down. You can overcome some of this resistance by packaging items together and encouraging sales volume by offering a discount on the second item or on bundles.
If you are going to bundle package, ensure you are not packaging low margin products and then discounting them. Packaging works best when you package products with higher profit margins or where you boost the sales volume of slow-moving stock by combining it with faster selling stock.
You may like to think about offering a loyalty discount/bonus to existing customers. The probability of selling to an existing customer is around 14 times higher than a new customer, so this could be a great way to boost sales.
You are only as strong as the weakest link in your sales process
It is important to remember you are only as strong as your weakest link. If you have any weak links in your sales chain, you need to fix it.
Help your team identify and capitalise on opportunities by giving them the training and structure they need to succeed.
If you have the cashflow, the federal government is offering 120% tax deduction for expenditure incurred on external training courses provided to employees.
For more information on these deductions, click on link below.
What is your cost of sales?
Cost of sales, also referred to as cost of goods sold (COGS) is a very important financial performance metric, as it tracks your ability to manufacture/deliver goods and services at a reasonable cost.
As your cost of sales represents the direct costs related to the manufacturing of goods/services that are sold to your customers, what is included in the cost of sales section all depends on which industry you operate in.
Learn more about cost of sales for your industry in the link below. This article includes a simple formula you can use to calculate your cost of sales as well as an infographic to help you understand what should be included in the cost of sales section of your financial statements.
Why is cost of sales so important?
Whilst calculating the cost of sales is relatively simple, knowing this number will help to assess how effectively you are managing the manufacturing/service delivery process and help you ascertain the business’s overall gross profit margin.
The cost of sales formula is vital in understanding your business’s financial performance in greater depth.
Critical numbers and key metrics
All businesses have certain numbers that define success. Some figures, like profit, are universal.
But what about other numbers? There’s certainly no shortage of data to measure – sales, costs, margins, cash – the list goes on and on. They’re all important, but what are the most important numbers for your business?
What is your critical number?
We have an eBook to help you understand the importance of measuring and monitoring your critical numbers – the key metrics for success in your business. Click the link below to learn more.
How can Walsh Accountants help?
Tailored around setting and achieving your goals, our business advisors will work with you providing their skills, knowledge and expertise to help you to better understand your numbers and in turn grow your business to increase your profits and the value of your business.
We are in the business of business – we live it, we breath it, we love it, and we’re here to help you.
Contact us today for a complimentary discussion based on your personal circumstances.