Understanding Tracking and Sales – Conclusion
In previous posts it was discussed that in order to make decisions about marketing and promotion, that a company needed to understand four core principles in their numbers. First and foremost, a company needs to understand exactly how much they’re spending on marketing.
Second, companies should be clear on how many leads are being generated from that expense. Third, the company must know the exact percentage of those prospects that eventually buy products and services. Lastly, the company should know the exact dollar amount of what each customer spends when they come to the location.
While there is much discussion in business circles about increasing the amount of traffic that arrives at a business’ doors or website, the most profitable companies maximize the average customer value of each transaction. To benefit from this principle, you will want to first determine the average number of dollars that a customer spends with you during a certain period of time.
The easiest way to track this number is to calculate it annually. In some contexts, this number is called the lifetime customer value and it is calculated to determine how much a customer will spend over a lifetime. However, the most useful concept for a small business would be to use an annual average value of each customer.
As was the case with the sales conversion number, this metric measures the buying process. When you conclude your analysis, you’re likely to consider additional training of your staff and front-line salespeople.
What exactly can they do in order to improve this marketing benchmark?
The primary focus that your sales process willtake on is that of “up-selling”. And while the term has often been called cross-selling it basically means that your company is looking for opportunities to provide extra value at every single transaction.
In the case of a website transaction, you’ll want to make sure that the buyer sees related products and services as soon as they make their purchase.This is likely to occur on their checkout page and in other case it may occur on their“thank-you” page.
In addition to this, your company should be utilizing e-mail effectively to assist in this process. You can do this by making sure that when a prospect becomes a customer that they are given the opportunity to buy more to enhance the value of their purchase.
Looking for opportunities to provide additional value is the way that you’ll want to have your sales people at your physical location look at this concept also. What you don’t want, is for your organization to have a sales-at-all-costs mentality. While making the sale is important, you want customers to tell their friends and family about the experience they have with your business. In order to do that, you’ll want to make sure that the selling that you do is always relevant to other purchases that they’ve made.
You may have noticed that when you purchase electronics from a big-box retailer that it is pretty typical that they will offer you the opportunity to purchase a maintenance plan. The amount that you pay is typically nominal when compared to the value of replacing your electronic device. This offer is presented to you as you are making the purchase of an electronic item. Once they know that you have committed to an actual purchase, a relevant and valuable offer is presented.Both you and your staff will find a number of opportunities to provide additional sales at every transaction. Care should be taken to make sure that any upsell offer is relevant to the purchase that they’ve made.