The 7 ways to improve sales and profit - Gaby Awad

Gaby Awad - “Buying Customers”

Introduction
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 🔥🔥🔥

It would be awesome if I could hear from you in real time during the show. If you’re listening live or to one of the recordings, you can always connect and interact with us on Facebook, Instagram, LinkedIn and Twitter at IBGRNetwork.

Listen LIVE this season:

• Wed Nov 11th 2:00pm - 3:00pm (EET) Streetwise client acquisition and lifetime value
  
• Wed Nov 18th 2:00pm - 3:00pm (EET) The 7 ways to improve sales and profit
  
• Wed Nov 25th 2:00pm - 3:00pm (EET) Lead generation and nurturing
  
• Wed Dec 2nd 2:00pm - 3:00pm (EET) Engagement and asking the right questions
  
• Wed Dec 9th 2:00pm - 3:00pm (EET) Value First in Sales
  
• Wed Dec 16th 2:00pm - 3:00pm (EET) Sales Objections and how to anticipate them
  
• Wed Dec 23rd 2:00pm - 3:00pm (EET) Networking with an intention to help
  
• Wed Dec 30th 2:00pm - 3:00pm (EET) Season 3 Recap
  
• 2021 Wed Jan 6th 2:00pm - 3:00pm (EET)  Season 4 Overview
  

Today is about The 7 ways to improve sales and profit
By the end of our time together you will....

• Understand the business chassis meaning the 7 compounded ways to generate sales and profit
  
• The leverage meaning doing more with less
  
• Know more about Pipeline, take-up %, leads, average value of sale, frequency of purchase, direct cost and indirect cost or overheads…
  
• Then we will take every area of the model and discuss its benefits alone
  
• After that we will try to breaking it down by setting example targets
  
• And we will be providing example strategies and tactics along the way
  

In business your time is your most valuable asset ...

• Business does not mean BUSY-NESS or keep on doing the same things and expecting to have different results…
  
• How you invest your time is one of the keys to business success ...
  

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...

1. Your pipeline- your database of target niche
   
2. Your Take-up %— multiplying both pipeline and take-up % will give you LEADS or how many potential clients do you attract?
   
3. Conversion Rate—how many leads do you convert into clients?
   
4. Frequency of purchase—how many times a year do your clients buy?
   
5. Average value of Sale—how much do they spend each time they buy?
   
6. Cost of Sales or direct cost %, and 
   
7. Overhead %
   

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:

Every week…

• For every strategy that you use to generate lead complete an individual weekly sheet.
  
• Tabulate the week’s totals on a Daily Sales sheets
  
• For each day collect the “Number of Prospects” in the box allocated.
  
• Measure the total number of sales made
  
• Divide “No. of Customers” / “No. of Prospects” x 100 to find the “Conversion Rate”
  
• Collect “Total Sales” 
  
• Divide “Total Sales” / “Number of Customers” to find the average value of sale
  
• Determine your client Acquisition Cost (we talked about that in the previous episode of this show)
  
• Work out your totals and your averages
  
• After you have calculated your weekly totals you can transcribe into a monthly sheet and then into a quarterly sheet.
  

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, 

• how can we reach more leads?
  
• Where are they located?
  
• What do they listen to, watch or read?
  
• How can we stay in contact with them so that they will remember us on their next purchase.
  
• How can we cross-sell or up-sell in order to increase the value of sale?
  
• How can we improve our profit margins, etc.
  

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:

1. Radio Advertising
   
2. Television Advertising
   
3. Cinema Advertising
   
4. Use Facebook Live To Promote
   
5. Blogs with links Back To your Site
   
6. Social Media Valuable Content that links back to your website, or landing page
   
7. YouTube Content
   
8. Podcast Content, Links Back To Site
   
9. Create 45 Minute Sales Webinars
   
10. Promote Webinars Via Social Media
    
11. Schedule Webinars Weekly, Monthly
    
12. Invest time and money in Google AdWords and paid social media boosts
    
13. E-Mail Marketing
    
14. Have a Referral system in place
    
15. Set Up Host Beneficiary Systems
    
16. Set Up Strategic Alliance
    
17. Network events and functions
    

Whatever you do… remember these very important tips:

• All Campaigns should link to your website with a Lead Capture Capability
  

Like a squeeze page or landing page

• Consider to include more video in your marketing
  
• Sell your why not your how and Engage Audience
  
• Provide value first and don’t ask for the sale immediately
  
• When networking, network like you breath and do it with an intention to help - not to sell!
  

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 %:

1. You Are Seen As An Authority Figure
   
2. There Is An Offer and the Offer Does Not Hurt Your Business
   
3. The Offer Matches Prospect's Perceived Need
   
4. The Offer deals with a Potential Solution
   
5. Give Access To needed Information like downloadable PDF
   
6. Provide Access To Know How and valuable content 
   
7. Your communication Is Shown Where Prospects Frequent
   
8. The Offer Talks In The Prospect's Language
   
9. 17. Easy To Follow Links To Take Next Step
   
10. Have a Simple Next Step Action They Can Take
    
11. Make the offer Believable
    
12. The offer Is Desired By Target Audience and relates to them 
    
13. Offer Will Leave Them Wanting More
    
14. Scarcity i.e. the Offer Will Run Out
    
15. Use or CRM systems like Hubspot, InfusionSoft, Or Salesforce
    
16. Setup Quality Automate Sequences and intelligent digital funnels
    
17. Use Automated customer journeys (I use Mailchimp for that)
    
18. While at it Use High Perceived Giveaway To Get their Opt In
    

Whatever strategy you consider to improve Take-Up % please remember these very important tips:

• Get Very Clear On Buying Personas
  
• Qualify leads before targeting like Make sure Leads Have Money And Can Buy
  
• Offer Can Be Viewed On Smart Device
  
• Collect The Number Of Leads
  
• Collect The Cost Of Leads
  

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
conversion.

However, you do need to work in both areas to gain synergy and longer lasting results.

Some strategies that might improve conversion are”

1. Provide value first… value … value … value … then ask for the sale
   
2. Align your USP With Clients Outcomes
   
3. Shorten The Sales Cycle
   
4. Sell What's Gained Not What's In Content 
   
5. Sell On Strong Benefits, Not Features
   
6. Stack Bonus Offer As Reason To buy
   
7. Have Time Based Offers - They Run Out
   
8. Increase Frequency, Quality Of Interaction
   
9. Have Strong VIDEO Testimonials From Clients
   
10. Survey Existing Clients and Survey Past Clients to know why they are not Buying
    
11. Have offers for early birds, Full Payment, or 3 Payment Period Option
    
12. Revisit your Sales Scripts and improve
    
13. Offer try before your buy
    
14. Take credit cards
    
15. Have financing options
    

1. Use D x V + F < R
   

1. Have Monthly Sales Training
   
2. Have weekly sales meetings with your team 
   
3. Role Play Using Scripts
   

Whatever strategy you consider to improve Conversion Rate please remember these very important tips:

• Collect And Monitor Conversion %
  
• Collect Conversion Matrix by lien of product or service & Improve
  
• List Objections, Build Ways To Overcome
  
• Flowchart Sales Process, & make buying simple and Improve touch points WOW factor
  

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:

1. Set Up Automated Sequence Via CRM
   
2. Keep Relevant Data On Clients and Use Call Cycling
   
3. Have a Calendar Timeline Of Communication
   
4. Make us of Email Marketing
   
5. Design and launch a Loyalty program or a membership program
   
6. Book your next meeting today 
   
7. Keep a record of their Future Needs
   
8. Follow Up And Follow Up Again
   
9. Create A Wow Atmosphere
   
10. Change your business model to a Repeat Business Environment (major software solutions are now selling subscriptions and not perpetual licenses)
    
11. Make Offers On Next Purchase
    
12. Invite dormant Past Customer to Events / Promotions
    
13. Sell More Consumables
    
14. Keep clients informed about Promotions
    
15. Inform Customers Of Entire Range
    
16. Introduce Upgrades Regularly
    

Whatever strategy you consider to improve The Frequency of Purchase here please remember these very important tips:

• Collect And Monitor The Number of Transactions 
  
• Discuss this number with your team and look for new ways to improve it
  
• Sometimes just staying in contact with your best customers is all that is needed to improve this number
  

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:

1. Segment your audience and define High Spenders
   
2. Systemise / Automate Lover Valued Sales
   
3. Remove Can’t Deal With & Should-be-Sacked Clients
   
4. Increase Prices start slowly and on higher stock items
   
5. Reduce Discounting
   
6. Give something extra Instead Of Discounting
   
7. Focus with your team on Selling Higher Margin Items
   
8. Open Longer, When competitors Are Closed
   
9. Teach your team how to cross-sell and to up-sell by having scripts and roleplays 
   
10. Carry Exclusive Lines
    
11. Package Services With Products
    
12. Know Competitor Faults, Set Viable Options
    
13. Know Objections, Create Overcome Scripts
    
14. Offers like: 4 For The Price Of 3 
    
15. Hire Better Sales People
    
16. Have the client to select from a menu or a Checklist
    
17. Put Team Incentives For Bigger Sales
    
18. Take All Cards e.g. Amex, Master, Visa
    
19. Impulse Buys At Point of Sales or cashier
    
20. Have A Minimum Order Value
    

Whatever you select as strategies remember this:

• Review these Conversion Rate Strategies frequently and update when needed
  
• Sell On Value Not Mark-up %
  
• Measure The Average Value Sale Per Sale
  
• Measure the Average Value Sale Per Client
  
• Set Average Value Sale Targets & Monitor
  

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?

1. Review Distribution Methods
   
2. Change Suppliers
   
3. Buy A Portion From the source
   
4. Purchase by credit card and Get Points or Cash Back
   
5. Negotiate Better prices Buy From Small Suppliers, Negotiate
   
6. Negotiate Better Terms
   
7. Get Tenders For Larger Costs
   
8. Have No Middle Person, Buy Direct
   
9. Bulk Buy, Pay/Receive Overtime
   
10. Simplify Product, Reduce Parts
    
11. Repackage Smaller/Own Label
    
12. Charge Finance Costs
    
13. Charge For Delivery
    
14. Upsell Warranties
    
15. Charge Separately For Advice or consultation 
    

Whatever you select as strategies remember:

• Know Your Actual GP Margin
  
• Track Cost Per Sale And Assess Quarterly
  
• Perform regular inventory counts To Reduce Theft or errors
  

Now let’s dig into reducing Overheads…

1. Set yearly budgets and review Monthly against your P&L
   
2. Track variances against expenditure budget and take corrective actions
   
3. Review All Monthly Payments & Reduce
   
4. Have your Suppliers To fix their prices for 12 Months
   
5. Change Suppliers or services and source of overhead like marketing fees, gaz and utilities…
   
6. Negotiate the rent
   
7. Meet With Accountant Monthly and challenge the figures
   
8. Pay Owners’ Salary Via Dividends
   
9. Pay your General Manager Salary based on Net Profit
   
10. Change salaries where applicable from fixed to per item produced 32. Sales Team Base Salary To Cogs
    
11. Reduce Unnecessary Management Fees
    
12. Make use of today’s new normal / work from home and leverage on Technology (Skype, Zoom, Google Calls)
    
13. Systemize To Reduce Rework/Mistakes
    

Whatever you select as strategies remember:

• Know Your Actual Net Margin and find new ways to improve 
  
• Always Ask For A Better Price
  
• Set KPI To Production Outcomes
  
• Remember that errors have a direct impact on cost thus reducing your net profit. Have systems in place to reduce reworks and scrap and to lower the cost of error.
  

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:

• Identifying / refining your 7 Ways strategies and tactics
  
• Come up with 3 to 5 strategies for every area of the 7 ways
  
• Test and measure the outcomes of these strategies for the next 90-days
  
• Re-adjust after that by removing the non-effective strategies and adding new ones.
  

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.

You can connect with Gaby on any of his seriously social platforms
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Send an email: gabyawad@actioncoach.com

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