Often the difference between solid business growth and stagnation is the type of sales operations and strategies that are implemented. Companies that thrive are able to perpetually increase profitability without compromising the quality of products or services. Those that fail tend to lack the insight it takes to keep up with competitors.
These are ways to maximize your business’s profitability and position it for long-term success.
1. Know Your Demographics
One of the biggest precursors to success is understanding who your target audience is and catering to their needs and wants. In some cases, this will be a broad demographic that encompasses a large audience. Other times, this will be much narrower and your efforts will be focused on a tiny audience. Basing your products or services, marketing campaign, and company culture accordingly should make it easier to reach your demographic and create a legion of loyal customers.
2. Focus on Valuable Customers
When applied to business, Pareto’s 80/20 principle implies that 80 percent of customers account for 20 percent of sales, and the other 20 percent account for 80 percent of sales. By understanding and implementing this principle, you can prioritize your efforts and aggressively pursue the top 20 percent of customers that result in the bulk of sales.
Knowing your demographic ties into this because creating a general profile will help you rank leads so you know which ones to focus on. You can take it one step further by utilizing lead scoring software like Marketo, which use data to rank leads.
3. Up-sell to Your Customers
Whenever a customer is about to make a purchase, it’s smart to make them aware of an additional product or service that can enhance their initial purchase. Perhaps the most classic example is a fast food employee asking “would you like fries with that?” when ordering a burger. Since a customer has an obvious interest in a particular product or service, there is a good chance they will be open to buying something to complement it. For a brick-and-mortar business, this is often done at the point of sale right before a customer is checking out. For an eCommerce store, you can list a relevant product or service on the checkout page. Just make sure your sales techniques are good ones.
4. Capitalize on Trends
Just like in life, the business world is constantly fluctuating. Staying abreast of industry trends should keep your company relevant and increase profitability when something is hot. If consumers are going crazy over a particular product, you could order a large quantity to meet demand. One way to keep an eye on things is with Google Alerts, which provides you with up-to-date information on your industry. Whenever a new trend arises, you will be the first to know, and you can take the appropriate actions.
5. Strive for Customer Retention
Generating new leads is an important part of business growth. The problem is that some companies are so fixated on this that they fail to retain some of their most valuable customers. From a practicality standpoint, converting first-time customers into repeat sales is very effective and lays out the foundation for a successful future. This could be as simple as creating an incentive program.
According to “Marketing Metrics,” it’s 50 percent easier to sell to previous customers than to new leads. That’s why it behooves you to reach out to existing customers and try to get their repeat business. This can include offering professional customer service, sending out thank-you emails after a purchase, or alerting previous customers of special deals that apply to them.
Increasing profitability isn’t rocket science. It just requires a logical approach and incorporating the right strategies. By consistently giving customers what they want, you can maximize profit margins in the short term and ensure that you remain competitive in the future.