To improve the quality of your business decisions, you need basic sales information. For the purpose of this article, you require the average rand value per sale in your business. The premise is that, if you can increase the number on average, your turnover and ultimately your profits should also improve.
- Upsell (think McDonald’s “supersize” sale’s technique) and cross-sell (think Samsung with different product lines – laundry equipment, computers, TVs, cameras and mobile phones) are two of the most widely used methods to increase the monetary value of a sale. Are you already applying these techniques in your business? Do you know what the profile is of clients who are more prone to go for an up– or cross-sell? Client education can assist in informing clients about other products and services on offer by our business, supporting both up- and cross-selling.
- The future sales value, or lifetime value, of a client is another perspective worth mentioning, because the immediate sale might be low in monetary value, but understanding who the client is and what unfulfilled needs they have that can be addressed by your products/services at a future date, means that you can proactively engage with them to prompt a quotation and ultimately a sale. The record keeping and follow-up processes in the business would need to be streamlined to ensure that you don’t miss out on future transactions. By being proactive you can limit the impact of the competition from the sales process.
- Rewards for ongoing patronage (like offering a discount or added value) can go far in building brand loyalty and, therefore, help to increase the rand value of transactions. The sales value and pipeline of future business can also be improved by offering a special deal when a client upgrades to a new model/at the release of a product. The new product will carry a larger price tag, ultimately leading to a higher turnover figure; in this way you secure a future sale (or multiple sales over time), which will be worth more to your business.
- Freebies with a high perceived value can be added to the sale of a product of service, especially when the up-and cross-sell options are chosen. The inclusion of freebies can support the business closure process for the sale (e.g. a video explaining how best to use the product or to implement the service).
The take-home message is that, if you want to improve the current and future rand value of
transactions, you need to know the current figures (average rand value per sale) and then implement a sales strategy and process which can be influenced and managed. A mere 10% increase in the average rand value per sale can lead to a >10% increase in profits, because of economies of scale and fixed overheads, which are transaction value insensitive.
By Jannie Rossouw, Head: Sanlam Business Market