Improve your sales by understanding the numbers

Assuming that what your business sells is wanted by someone somewhere and you have already sold it once, selling more is pretty simple.

At a most basic level it’s a numbers game. Let’s say you discover that for every hundred people who visit your website, ten of them buy something. To sell another ten items, all you need to do is attract a further hundred website visitors.

In sales, the numbers do tend to work that way, as long as other variables remain the same (i.e. you have attracted the same quality of website visitors). It’s what can make sales reasonably predictable.

People talk about a sales pipeline, where you feed a load of raw leads in one end and get revenue out of the other end.

So should you just focus on getting more leads in at the start of the process? That would be a simple way of increasing sales; but it is more effective to understand the numbers that affect leads turning into revenue and what happens when you make a number of small tweaks.

Here’s how to build your sales model and test changes to generate more revenue.

Record every scrap of info

Quality information is everything so the first step is to record everything that happens in your sales process. You don’t need to spend money on expensive software; a simple Excel spreadsheet or even a piece of paper would do. Keep track of every lead you get including where it came from. Track proposals and sales. Look at your revenue each month and work out the source - where did the original lead for each client come from? This information will be vital as you make changes down the line.

Work out the numbers

Once you have tracked that information for a few months, you will start to see patterns emerge and be able to work out the sales model of your business. Work out the key conversion rates – how many leads become opportunities? How many opportunities become sales? How many sales have opportunities for additional revenue? Are leads from some sources more likely to convert than others? Establish the numbers and test them by predicting future sales. Compare the actual results to the predictions to establish if your model is correct. If it is, congratulations – your model is an extremely powerful sales tool that few small businesses understand or use. You now have the potential to walk all over your competition. Ready to use it?

Test and measure

Making changes to your sales model is not about change for the sake of it. By testing and measuring you can make small changes to see what positive (or negative) effects they have. But it’s vital that you only make one change at a time, to ensure you are see the genuine effects of your test. For example if you introduce a new improved proposal, you mustn’t make any other changes to that stage of the sales process for a few months, so you can see what effect it has.

Work on conversion rates

Now go through your entire model and try things. Got a web page that turns 30 per cent of visitors into customers? Then make a small adjustment, see what happens. If your conversion rate gets worse, undo the change before trying a new one. If it gets better, fantastic! And now try something else. Avoid the temptation to revolutionise your model. You don’t need to do that, but you should be constantly trying to get better results from your sales model by making a series of small tweaks.

Upsell

One vital part of the sales process that is often forgotten by new businesses is the upsell. Think of how burger chains ask if you want to supersize your meal, or shops offer three for the price of two. How can you apply this principle to your sales model? In some cases getting this correct at the very end of the sales process can have quite dramatic effects on your revenue figures.