The third way to grow your business - Increase your sales conversion rate
The third way to grow your business is to increase your conversion of prospects to sales.
This is relevant to all businesses, but particularly relevant to those who prepare proposals and quotes on a regular basis.
What you can measure you can manage.
Start by working out your current sales conversion rate for the past quarter by dividing the number of quotes converted into sales by the number of quotes prepared. For example, if you sent out 156 quotes over the past three months and 85 of them were successfully converted to sales, your conversion rate for that quarter is 54% (85 / 156 = 54%).
When you know your current conversion rate, you're immediately drawn to the revenue your business is missing out on by not achieving a higher success rate. In the above example, if that business increases its conversion rate from 54% to 64%, and if the average sale is $6,500, that's additional sales of $405,600 over one year.
In other words, it may be well worth the time, effort and some cash outlay on improving your systems and training your sales team to achieve a lift in your conversion rate.
There are many ways to increase your sales conversion rate. Make a note of the ones you believe are most relevant to your business:
1. Your sales system.
You need to document your sales process, step by step. Who does what and when? Include your sales meetings, quoting and proposal processes. For example, how quickly should a prospect receive their proposal after you've gained conceptual agreement? What is the follow up process if a prospect doesn't respond to the proposal? The more comprehensive and effective your sales process, the better your conversion outcomes will be.
2. Your sales team.
No doubt some of your team are achieving a better conversion rate than others. This isn't luck. It's because they're more effective (plus, they're probably following a tried and true system). Train your team on how to sell more effectively and ensure they're following your sales system.
3. Follow up, follow up, follow up!
You'll get better sales outcomes just by following up all of your sales meetings, proposals, or quotes. If prospects don't respond to your follow up call, keep going until you get an official no. Did you know most business is won on the fifth and subsequent contact with prospects?
4. Offer a product or service guarantee.
This might sound scary at first, however it's the easiest way to de-risk your prospective customer taking that step and doing business with you. It's also a powerful way of demonstrating your absolute commitment to quality. Only guarantee what you can manage.
5. Proposals with options.
Presenting a proposal where your prospects can choose one of three service options increases your chances of having at least one of those options accepted. This sales technique is often referred to as 'the choice of yeses'. Make sure you keep it simple and limit the options to three or four, or your prospective customer will be overwhelmed by too much choice.
These are just some of the ways to improve your sales conversion. Call us on 03 474 0475 if you'd like to set up a meeting to talk with one of our business advisers about how to grow your business.