2 Surefire Strategies to Increase Sales Revenue
Success in sales comes down to one thing: selling enough to make a profit. That's going to be every salesperson's and small business owner's goal. Of course, that can be easier said than done! There are two very different strategies you can pursue to get to the point of profitability.
If you're not doing as well as you'd like with selling, you have two basic options to help you improve your numbers.
Increase Your Sales
Increasing sales is usually the first strategy that salespeople adopt. It simply means increasing the total number of sales that you make. If you normally sell 100 widgets per month, you might set a goal of selling 125 per month instead. That means increasing your sales activities (e.g. making 50 cold calls a day instead of 40) or else improving your conversion rate (sticking to 40 cold calls per day, but changing to a new cold calling script that gets you a higher percentage of appointments).
Increase Your Margins
The second strategy is a bit more subtle but can also be a bigger revenue booster. Instead of increasing your total number of sales, you try to increase the quality of your sales. You focus on selling those products and services that return a higher profit margin. So instead of bumping your monthly goal from 100 to 125, you would look at a breakdown of your sales and try to increase the percentage of premium sales. If you've been selling 75 regular widgets and 25 premium widgets per month, you might aim to sell 50 regular and 50 premium widgets instead.
The reason this can end up making you a bigger profit than the first strategy, is that profit margins are typically higher on high-end products than on the lower-priced ones.
Choosing a Strategy
So which one is a better strategy for you in your current situation? You'll have to look at your sales activities and metrics closely to decide.
First, sit down and make a list of your daily on-the-job activities. Ideally, you would spend a couple of days writing down everything you do as you do it, including how long you spend on each task. This can get awfully tedious, but the results are often eye-opening. You want to figure out exactly how much time you're spending on sales activities (calling prospects, attending appointments, etc.) versus other activities (writing reports, attending company meetings, etc.).
If your time is being eaten up by non-sales tasks, you can either try to delegate those tasks to someone else or work on ways to cut corners and slice off some more time for sales tasks. Sales is a numbers game. The more time you spend on actual sales-related activities, the more sales you will make.
On the other hand, if you're spending plenty of time on sales activities and your sales metrics look good (i.e. you're converting a respectable percentage of prospects into sales) then it's time to shift your focus from quantity to quality. After all, selling 100 widgets at a $1 profit margin is not nearly as good for you and your commission check as selling 25 premium widgets at a $10 profit margin.
If you're working on a sales team, you may want to set a meeting with your sales manager and ask him or her which strategy is better for you. The sales manager will probably have a better grasp of company goals as a whole and can offer you a different point of view, which can help keep you from tearing off down the wrong path.
Another option is to try the first strategy for a month, then try the second strategy for a month, and compare your numbers. Did you have a really hard time finding premium prospects? Then the first strategy is probably best for you. Or if you really struggled to fit in more cold calling time, then you probably should focus on increasing quality instead of quantity.
At the end of the day, the strategy that best fits your selling style is going to work better for you.