New Opportunities In Numbers
Looking for opportunities to make more sales? Well, I know one place you can find it, and you don’t even have to leave your office: examining your customer sales records.
Yawn. Looking at sales records has to be boring, right? After all, that’s in the past and just a bunch of numbers. But there’s a wealth of new sales potential in those figures if you only know what to look for.
Last December, I sat down and examined my own company’s customer sales records. Sure, I already knew who our biggest accounts are, but until I crunched a few numbers, I didn’t really understand just how my income was distributed.
I learned that one customer represented a much bigger percentage of my income than I realized. We weren’t spending nearly enough time with them; they could probably have been buying a lot more. I also realized there were other prospects very much like them, and we needed to be out cultivating similar companies. Meanwhile, we were spending resources chasing customers who actually weren’t bringing in as much cash as we thought.
The truth is that in most businesses, a few key customers account for a major amount of total revenues. There’s good news and bad news in that info.
The good news: There's probably more money by mining those large accounts. Those customers already like your products or services. What else could you be selling them? The bad news: You’re overly dependent on a few sources. What happens to you if something happens to them? You need to find other large customers to balance them out.
But you can’t know any of that if you’re not looking at your customer sales records. And not just this month’s sales, but how much did they buy from you last year? The year before? And before that?
This shouldn’t take a lot of time, especially if you use even basic bookkeeping software. It only took me a few minutes (we use Quickbooks), but as a result, we changed our sales strategy significantly.
When you look at your customer sales records, look for the following:
• Total dollar sales per customer per month and total for the year
• Total unit sales per customer per month and total for the year
• Percent of income per customer to total income
• Total outstanding balance for each customer (you don’t want to market to deadbeats).
If you have many customers from one company, look at how much that one corporation, as a whole, bought from you.
What happens if that corporation closes or changes providers? You want to know exactly how dependent you are on them.
The types of opportunities to seek out when you’re examining your customer sales:
• Determine which, if any, accounts represent a very large a percent of your overall income. Identify what attributes they have so you can look for in other prospects.
• Identify “good” customers with the potential to become “great.” Evaluate that list; why aren’t they buying more?
• Look for purchasing patterns. In which months do larger customers buy? Create a contact calendar so that you can contact them before they normally buy.
As you sit down to examine your sales records, don’t think of it as a chore.
Instead, imagine yourself as an adventurer, setting out to discover and unearth a wealth of new sales opportunities, right there at your desk.
Rhonda Abrams is the author of “Six-Week Start-Up” and “What Business Should I Start?”
WBJ Web Partners
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