Exponential Marketing

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The sole purpose of marketing is to sell more to more people, more often and at higher prices.
-Sergio Zyman

Three Critical Pieces of Information — Your Core Sales Numbers

There are three pieces of information or data which you, as the business owner, must know:

1. The number of prospects generated by your advertising
2. The conversion rate of prospects to customers
3. The average value of each customer

Armed with your Unique Selling Proposition and an understanding of the principles of Exponential Marketing, you will be ready to see some real growth in your bottom line and your own understanding of how your business really works.

Traditional marketing only focuses on item #1, increasing the number of prospects.

By focusing on all three of the Core Sales Numbers, your bottom line will increase three, four, and even five times more when even minor improvement is made to all three of these areas.

Identify your Core Sales Numbers

Every industry and every company in that industry has some ongoing sales process or it wouldn’t be in business.

For example, in retail, advertising or direct mail might generate traffic coming into the store. The sales representative then helps the prospect and either generates a sale or doesn’t.

A professional will generate leads using personal calls to referrals, direct mail, or he might generate leads by placing ads in professional journals. These leads or prospects are followed up on for an appointment and the professional either closes the prospect or not.

Manufacturers might generate leads by being listed on a bid sheet. Then, they have an opportunity to place a bid and get the contract or not.

Service businesses might do a combination of advertising and marketing to generate leads. These leads or prospects are taken through some process of presentation and closed.

During the closing process, the customer is fitted to the service or product that best fills his need. However, a man who intends to buy a suit will also need shoes, socks, shirts, ties, and other items to go with his new purchase.

By tracking the dollar amount spent by each customer, a business can determine if the salespeople or staff is filling all of the customer’s needs rather than just the item or service requested.

The ABCs of Building Your Business

Your advertising creates “A” amount of prospects. A prospect is anyone who walks through your door, calls you on the phone, agrees to listen to a presentation, asks for any additional information about your business, etc. In short, anyone who responds in any way to your invitation to do business.

For every prospect you encounter, “B” % will become your customer. This is someone who purchases a product or service.

The average revenue generated by this new customer is “C” dollars. This number is arrived at by combining two numbers: the actual transaction amount during a purchase (this is increased by upselling), and the amount of times the customer comes back to your establishment to purchase (this is increased through several different strategies).

Your Core Sales Numbers represent the ABCs for growing your business. These Core Sales Numbers work to grow your business THREE ways instead of the traditional marketing approach of only increasing the number of prospects.

Let’s look at an example of 20% growth, first focusing on just increasing the number of prospects, then we’ll look at a 20% increase in all three of the Core Sales Numbers.

Sales

A – Prospects – 200
B – Closing Rate – 20% which equals 40 customers
C – Average Transaction amount – $1,000
Total Revenue Generated: $40,000

1) Sales with a 20% increase in prospects

A – Prospects – 240
B – Closing Rate – 20% which equals 48 customers
C – Average Transaction amount – $1,000
Total Revenue Generated: $48,000 

2) Sales with a 20% increase in closing ratio

A – Prospects – 200
B – Closing Rate – 24% which equals 48 customers
C – Average Transaction amount – $1,000
Total Revenue Generated: $48,000 

3) Sales with a 20% increase in the average transaction value

A – Prospects – 200
B – Closing Rate – 20% which equals 40 customers
C – Average Transaction amount – $1,200
Total Revenue Generated: $48,000

4) Sales with a 20% increase in all Core Sales Numbers

As you can see, small improvements in each area give you dramatic growth overall:

A – Prospects – 240
B – Closing Rate – 24% which equals 48 customers
C – Average Transaction amount – $1,200
Total Revenue Generated: $69,120 

Performance is maximized only when all marketing assets are leveraged in a multi-pillar system, growing the business in all three ways:

By integrating the Unique Selling Proposition into all of your employee training and prospect & customer follow-up systems, you can optimize your current marketing efforts for exponential increases in sales.

For more information on how exponential marketing can dramatically increase your revenues and profits without spending more money on advertising, contact us today or just call 646-450-4120.

Or, click here to find out more about the next pillar: how to use databased marketing to assure a solid business that survives and flourishes.