Gaby Awad - “Buying Customers”
Hello all Leaders! You are NOW listening to the IBGR Network - known as International Business Growth Radio Network
My name is Gaby Awad AKA The Coach on Wheels (you have to watch my YouTube channel to know why 😉), and I am your host for the BUYING CUSTOMERS radio show 🔥🔥🔥
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Listen LIVE this season:
Today is about The 7 ways to improve sales and profit
By the end of our time together you will....
In business your time is your most valuable asset ...
So how can we do things differently with the end in mind. And the end here is revenue and profit.
To build yourself a bigger or better business you need to find the money to invest in the business. Finding the money is our topic today. There are 7 areas that you should be concerned with… I call those the “7 Ways”, and massive results are possible by achieving only small improvements in each of these areas...
This simple but effective system of evaluating your business in terms of marketing, sales, and profit efficiency allows us to benchmark where we are right now… The idea is to test and measure these at least 6 months and to come up with a baseline score to improve them.
And by testing and measuring I mean go granular. I provide my clients with testing and measuring templates and I tell them:
If you don’t know the score you will not be able to improve the score. Next set a SMART goal for every area for example, in the next 90-day we will improve the conversion rate from 20% to 22% (an apple a day not 7 apples on Sunday)
Brainstorm with your team strategies and tactics to meet those goals. Ask yourself,
Once you have selected the strategies for your business, put a simple action plan for the next 90-days and work on implementing them and don’t forget to Test and Measure the results.
While at it, don’t come up with things like we want to bring more clients, have more sales, or increase our profitability. Clients, sales, and profit are results of you doing things. So these are the outcomes and not the activities themselves that will lead you to achieving these outcomes.
Now image the framework like a series of multiplication (and this is where the compounded effect magically fits in)… It goes like this:
The first 2 important areas have to do with marketing: Building Your Pipeline and Take-up %. And Pipeline x Take Up % = Leads. What is the definition of LEADS? Well they are prospects that fit your niche and you have collected their information.
Building your pipeline is about creating initial interest in what your business has to offer to get that person to inquire or start the process of becoming a buyer.
The initial states are (1) interest generated x percentage that takes up the perceived offer = leads.
In a walk-in retail situation, the offer is your signage and enticements to get people to come into your store.
In a service business like an consulting or marketing firm, it can be the material in a brochure,
item on your website or LinkedIn advertisement.
Let’s say we have identified our niche market to be around 100,000 suspects. How we tell them we exist and that we have the solutions to their buying needs? Here are few examples:
Whatever you do… remember these very important tips:
Increasing Take-Up % is the conversion of people who have been enticed by your offer and are
converting to a lead. As an example, if you were advertising online, and a person started the process of entering detail into a form but did not finish or were driven to your advert but did not go any further.
This is the take-up percentage. Leads are a two-step process … an enticement (offer) x the percentage who take up that enticement and become a new lead.
When developing lead flow it is ideal if you look at both steps in the process.
Here are few example strategies to improve your Take-Up %:
Whatever strategy you consider to improve Take-Up % please remember these very important tips:
Next in the framework is Conversion Rate… Increasing your conversion rate flows from:
Leads x Conversion Rate = Clients. To gain an increase in clients you need to work in both areas (1) Lead Increase and (2) Conversion Improvement.
Normally conversion improvement is a less expensive area to work on than increasing leads. In most cases, it will cost money to generate a lead BUT save you money when you improve
However, you do need to work in both areas to gain synergy and longer lasting results.
Some strategies that might improve conversion are”
Whatever strategy you consider to improve Conversion Rate please remember these very important tips:
Frequency of Purchase is repeat business. This is the area that will sustain a business or will break it.
Most business want to sell more… this can be sell more cars, sell more consulting jobs, sell more consumable items, etc.
Selling more equates to more units sold and Units sold is a two-part equation of
clients x frequency of purchase = total units sold in a specific period.
In an accounting firm if the client does a tax return and an internal controls assessment
and a business analysis then this is 3 times the frequency of purchase. a1 client x 3 sales = 3 units sold.
The key is to find out the averages e.g. the average number of times a client buys from us in a specific period say a year or a quarter.
How to increase that number? Some strategies are:
Whatever strategy you consider to improve The Frequency of Purchase here please remember these very important tips:
Average Value of Sales: If Units x Average Value Of Sale = Revenue, how to improve this Average $ sale?
Increasing your average value of the item sold is a great way to increase your revenue AND increase profits and cash flow.
Remember what we talked about in the previous episode? Each client costs you money to get and to service… if they buy more on average then it’s great for your business. This will increase the lifetime value figure…
To increase your revenue, you need to work in two areas! More units sold and at a higher average value. If we sell 2,500 units at an average of $150 that equates to $375,000.
An increase of 10% only to the average value will change the revenue from 375,000 to $412,500. This also works by department and different product/service lines.
Some strategies that work here are:
Whatever you select as strategies remember this:
Let’s talk a bit about improving our GROSS PROFIT.If I buy something for $50 and sell it $100 then my Cost of Sale as a percentage of revenue is 50%.
If I buy the same item for $50 and put my price up by $5 to $105, then my Cost of Sales as a
percentage of revenue is reduced to 47.62%
Putting prices up is a dual strategy for both profit increase and cash flow improvement. A direct price increase goes to a positive cash flow. The $5 in the above example is pure profit
and pure cash flow.
There may be a reduction in the number of clients from a price increase AND there
may also be an increase in client numbers. The goal is to assess the situation for your business.
So then if Revenue x Cost Of Sales % = Gross Profit then what can we do other than increasing our prices to reduce this COGS or simply Cost of Sales?
Whatever you select as strategies remember:
Now let’s dig into reducing Overheads…
Whatever you select as strategies remember:
Remember that you should work ON your business and not only IN your business… Working ON your business means you are strategizing, planning, and implementing ideas to acquire customers and to increase revenue and profit. But it all starts with knowing your targets and smart goals and then decomposing the projects and tasks that will help you reach those goals. This episode today was all about how to think to find the money. In business, if you don’t know the score you won’t be able to improve the score, so change your mindset from doing the same things and expecting different results to testing and measuring everything from take up %, number of leads, conversion rate, number of transactions, average $ sale, acquisition cost, lifetime value, margins, etc.
As an action plan for next week, consider:
Written by Gaby Awad
As a Business and Executive Coach, Gaby helps business owners, leaders, and teams grow and achieve their goals through alignment, business re-education, coaching, and mentoring. He has more than 25 years of experience in executive positions and transforming businesses. Currently he is the Franchise Owner of ActionCOACH in Lebanon and in this position he also coaches Business Owners, CEOs and other top level executives. Gaby hold international accreditations as certified coach from ActionCOACH, Marshall Goldsmith, The John Maxwell Team, and Jeffrey Gitomer Sales Academy. Gaby is also the founder of Good Session Coaching, an online learning platform for executives and business professionals where leaders can go through self-paced learning.
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