Every business owner wants to increase the sales of their company! What is less common is knowledge of how to use financial strategies to have an impact on increasing sales. If you are not employing these six strategies, you are missing out on incremental sales that could have a huge bottom line impact.
- Increase the amount of time you are spending on sales. The CEO/owner has more punch with customers and potential customers than anyone else in the firm. If the CEO increases time spent on sales from say, 10% to 20%, what would be the resulting increase in sales, and how much would flow to the bottom line? This simple concept is often overlooked and can bring more to the bottom line than many other activities, including cost cutting.
- Strategic Pricing:
- Understand your costs inside-out.
- Understand your true overhead rates (service firms, too.)
- Understand your variable and fixed costs and breakeven.
- Have a robust quoting program to accurately estimate the cost of your products/services/jobs.
- Understand the bottom line benefit to the company of winning the quoted business, including net contribution and cash.
- Identify minimum margins and products/services that are not meeting these margins. Determine how to increase those margins through reduced costs andor increased prices, or eliminate them.
- Use this information to develop “strategic pricing strategies” to win the business you want.
- Identify and Increase GOOD Customers:
- Calculate true customer profitability.
- Understand the soft side of good vs. bad customers.
- Rank customers by profitability as well the “soft” aspects. You will quickly identify the attributes of a good customer (e.g. size, industry, geography, etc.) and can then target additional potential clients with similar attributes.
- Aggressively seek out these good customers.
- Weed out bad customers. Remember the 80/20 rule – your bad customers are actually hurting the bottom line.
- Build an ROI (return on investment) model around your products or services to help your customers understand the financial benefits of using them. Have your salespeople work directly with them to fill out the ROI worksheet.
- Calculate the ROI of your advertising and other marketing activities, and employ only those that meet a specified benchmark.
- Create and implement sales incentive plans to properly reward sales staff for achieving the goals you set, increasing sales to “good customers” and following the other items laid out above.
Want to increase sales? Then these financial strategies should be included in your overall sales and marketing plans!
Need more info or help in implementing this advice?
Authored by B2B CFO Partner, Rick Perrin posted with permission