How to Avoid Making this One Big Mistake that Many People Make

by MHolland | Oct 4, 2024 | Business Tips, Selling Tips

I wrote the following blog in 2018.  I think it is great for a re-visit. For those who have not read it, please enjoy…

You Cannot Increase Sales

Yes, that is true, you cannot increase sales. Go ahead, try it. You cannot increase sales or profit (or lose weight for that matter), in and of themselves.

Why? Because those 3 things – (1) sales, (2) profit, and (3) weight loss are all results. They are things you can measure, but not manage.

What you can do is manage your activities. You can manage (and measure) the activities that make up those 3 things.

For example, you can make sales calls. That’s an activity you can both measure and manage.

You can reduce expenses by renegotiating terms with suppliers. That will likely have the effect of increasing profit, all other things being equal.

You can eat less, and exercise more, that will likely have the effect of you losing weight.

I am driving this point home because the only controllable things in life are activities. We cannot pre-determine what the results of those activities will be…we can only measure those results.

The reason I am pounding this point home, is because businesspeople and salespeople often say, “I am going to increase sales”. Great intention, of course, yet that is not a controllable activity.

It is particularly challenging with sales because sales are made up of 3 things, not 1 thing.

The 3 Things That Make Up Sales

What are sales made up of? Customers buying goods and services? Yes, of course. So, let’s look a bit deeper. What are the 3 things (and only 3) that make up sales.

It plays out as a formula, and it goes like this:

1. Number of active customers

X

2. Number of times they buy from you (in accounting terms that would be transaction frequency)

X

3. The average amount they spend with you per visit (person or online)

=

TOTAL SALES REVENUE

So, why is this important?

The One Thing People Focus On

It is important because when people say, “I am going to increase sales”, they almost always mean they are focussed on getting new customers.

Of course, getting new customers is a perfectly legitimate way of growing your business, and we need to all focus on that as businesspeople.

However, as you can see in the above formula it is only one way to grow your business. There are two more (3 more, but this blog is just focussed on the 3 ways to increase sales).

And we all know that getting new customers is the single most expensive way to grow your business.

The Second Part That Even Huge Businesses Miss

The 2^nd way to grow your sales is to focus in on increasing the number of times your customers/clients do business with you.

Now, you will begin to see that as a strategy it is completely different than way #1 – increasing the number of customers in your business.

And as a different strategy, it will lead to different activities, which – as your goal and intention – lead to different results – increasing sales.

So, what could you do in your business to encourage people to come back more often?

Here are a couple of ideas:

• A quarterly newsletter talking about new products and/or services
• A loyalty card
• Phone calls, reaching out to connect with existing clients

This is where brainstorming with your Team can really create a massive list of fun, creative ideas. Then, take your list and prioritize and take on the top 3 to implement.

And remember this – what gets measured gets done.

Let me give you a real-life example of the 3^rd idea above – making more calls to your clients.

A client of a colleague of mine (a business coach) complained that his business was growing at a snail’s pace. My friend coached him to do this one thing – block every Friday morning off to call his clients.

And do what, you may be thinking? Well, it wasn’t just to connect and talk about the weather.

What this professional service provider did, was simply ask rocket-science level questions, like, “how are things going in your business?”, and “what are the issues you are dealing with now this quarter?”

Those simple questions led to them talking about their problems to this person.

This professional service provider acted wisely He did not jump in immediately with solutions. He kept drilling down with impact-type questions, as in, “what is the impact on your business of that problem you just shared with me?”

This often led to his clients asking for him to take on some of these issues. This led to more work for the professional service provider.

What were the results? They shocked him. Sales doubled, and soon he moved into a bigger home to retire to.

And his clients were happy, as the professional services firm became more involved and solving chronic problems for his clients.

That simple activity of blocking time to call his clients and ask simple questions led to more work for the company.

And here is the kicker – do you think those clients felt more cared for, or less? Do you think that increased or decreased loyalty?

And this was an activity the business did rather than focusing on getting new clients.

Lastly, what do you think the cost of those new sales were? Higher or lower than going after new clients? Only the cost of his time to make a call.

The 3^rd Part That McDonald’s Has Mastered

The 3^rd way to increase sales is to increase the average sales value of each transaction.

I think we can all see that this, again, like way #2 is a completely different strategy than way #1.

What are some ways you can increase your average sale?

• Bundling – putting together a package of goods and services hat solves a total problem for the client/customer
• Scripting – just asking for the sale! (I will talk more about that below…)
• Asking questions
• Newsletters
• Price increase

Again, as in number 2 above, you will want to brainstorm ideas here with your Team and come up with 3 to put into practice right away. Measure your results.

Let us take a closer look at 2 of the above ideas. One is scripting, the famous McDonald’s “would you like fries with your burger?” is an obvious example. McDonald’s measure everything and that script has measurably increased sales and profits dramatically.

Another way to increase sales is to affect a price increase.  I can hear many of you reading this saying, no way, I cannot do that without losing customers!

I hear that all the time, when I suggest businesses increase their prices. It goes something like this: “I cannot do that, Mark, because I am in a competitive industry and if I do that I will lose too many customers and scare off new ones too!”

Just last week, I met with a client whose production manager convinced the owner (who was an initial “no” to a price increase) to increase prices by 5%.

They did. Do you want to know how many customers they lost?

Zero. That’s right, zero. They have loyal customers who love their product (organic food supplements), and a 5% price increase was too small to have them leave.

The result was a direct increase to sales that fell right to the bottom line as an equivalent increase to profits!

It costs you nothing to implement a price increase…

Creating a Profit Improvement Plan

Ok, so now it is time to put it all together.

If you concentrate your energies on all 3 areas of your sales – increasing new customers, increasing the number of times they do business with you, and increasing the amount they spend per visit, you will have an amazing compound effect on your sales.

Try it out. Print out and fill in the blanks of this Profit Improvement Chart and see the impact of a 5% change in these 3 ways to grow your sales has on your bottom line.

You will be amazed…. thanks for reading!

You Say You Have Awesome Service…Does it Show Up on The Phone?

by MHolland | May 15, 2024 | Business Tips, Selling Tips

**The following blog is a re-print of one I wrote in early 2019. I believe it is more relevant now than ever.**

Every single touch point in your business is an opportunity to wow, or not, your customers…

In a competitive business world, (when is it ever not?), often the only way to rise above the crowd and risk being a tall poppy is through awesome service.

Yes, all businesses must DO great work, yet how they deliver that work, the way they present it to you, if you will, is the fulcrum point, the centre of gravity on which all else rests in your business.

In fact, I would assert – because how you do one thing is how you do everything – that awesome service practiced with rigorous performance standards will elevate the technical work of your business.

Said another way, if you have extraordinary service in, say a restaurant, with hyper-clean bathrooms, tables, floors, and so on, then it is unlikely you will walk in the kitchen and see a dirty mess.

How You Do One Thing is How You Do Everything

How you do one thing – clean bathrooms – is how you do everything.

This translates to the phone…

How you talk to your Team on the phone is likely how you are with your clients.

Or is it?

Are you gruff, abrupt, curt with Team members, and gushy and sweet with customers when they call?

Ok, better hope your customers are not listening when you are on an internal call then.

I am really surprised at how few businesses get that the phone is one of the most frequent contact points for your business, especially in today’s virtual world, where it is often the only point of contact.

What happens when you call your own business?

Is the phone answered on the second ring? (First ring is too abrupt for most, on the 3^rd ring impatience is kicking in…)

If not, why not?

How is someone greeted on the phone when a customer/prospect calls?

Do you have a script? “Good afternoon/morning, ABC Company, this is Mary Jones, how may I help you?”

How does the call end?

On a high? Do you say, something like, “thank you for calling, have a wonderful day!”

Who hangs up first?

Always hang up last. Why? For that one out of five times where the customer says, “oh, one more thing!”. And you are right there waiting for them…

Also, better that you get the hang-up clunk in your ear, than them. Again, always leave them on a high.

Customers in the Store Versus on Phone

People in line at your store take precedence over people just phoning, right?

Wrong.

Let’s say you are a computer store selling high-end computer systems, and some parts too.

The fellow in your store is looking for a $6 USB cable, and wants to know all the different makes and sizes, and after spending 30 minutes with your sales clerk decides to leave and order on Amazon for $4!

Meanwhile the clerk ignored the phone (person hung up after 12 rings, which shows amazing patience, most of us will hang up after 3-4 rings). The person on the phone was interested in talking about a high-end computer system for her business that she was budgeting $50,000 for and had a few questions to ask before coming in.

I admit my example is extreme, yet I bet most of you reading this have had similar experiences of calling to ask about a high-end, expensive item (maybe to find out if it is in stock), only to be treated with total indifference on the phone! Perhaps ignored completely or left on hold while they serve the “real” customers at the till.

Ok, so what happens if your Team is serving customers in the store and the phone rings?

Easy, you look the person in the eye you are serving and ask if they mind if you take that call and you will only be 30 seconds.

You take the call, answer with a grin and a script, “good afternoon, ABC Company, this is John Smith, how may I help you…”

Then very quickly say this, “I am just finishing serving a customer in the store, would you mind if I place you on hold for a brief 1-2 minutes?”

Buzz for help if you can, or quickly serve the customer and get back to the phone.

You may need to hire more people if you get a lot of calls, or walk-ins to deal with this if it persists.

Poor Service in Stores

In many stores these days the service is so bad that you don’t get service either on-the-phone or in-the-store!

A couple of weeks ago I came back to Vancouver from Salt Spring Island, and I usually am very careful when I pack up my laptop, second monitor and all the little cords that join it all together in road-warrior fashion.

This time I forgot one small simple cord.

No problem, I will go to Staples and see if they have one – good service from the young man in the electronics section, but no such animal in the store.

Ok, no problem let’s try 2 other well known big box retailers (I won’t mention who). Nope, no cord, no service, no care.

So, after spending hours really trying to buy local, I went home and late Saturday ordered the item on Amazon (for 25% the price), and it was delivered to my door on Monday at noon!

In fact, at one retailer (a big one too) there is just no one on the floor to serve people. No one. I even asked a customer who looked like he worked there for help.

One clerk I finally found was stocking shelves and with total indifference barely even pointed the approximate direction of the item I was looking for. He mumbled the aisle number and I had to ask him to repeat it. He looked annoyed that I had actually interrupted his real work of stocking shelves.

And, people wonder why Amazon has gotten so big.

Perceived Indifference

You see, perceived indifference is the number 1 reason (for 7 out of 10 people) why people stop doing business with a company.

Coming back to the phone…

That is how you can show perceived care. How you answer and handle each step in the phone call.

At our firm we have 8 Performance Standards just for the phone…

Thanks for reading….