Believe it or not there are only a few days left in 2020!
At this time of year many people start PLANNING for 2021 with the intention of ACTING in 2020. If you want first quarter RESULTS, I suggest ACTING now!
Here are a few thoughts to consider if your goal is more sales and profits in 2021. Some strategies may have an immediate impact, but most will take months to generate results.
More Leads: The time it takes to drive more leads will be impacted by the type of marketing technique and your industry. A systematic referral strategy could begin to pay dividends in a week or two. A 3 step contact pattern consisting of direct mail, e-mail and phone could take a month to generate leads. Attending more tradeshows could take months to a year depending on the tradeshow schedule. Arranging a strategic alliance with another business or association could take 3 to 6 months to really impact the lead flow. My recommendation is to implement a combination of short, medium and long term lead generation strategies.
Better Conversion: Seeing improvement in the conversion or close rate from prospects to clients could be very quick, or extremely long depending on the sales cycle of a particular industry. A retail business with a short sales cycle could see a rapid increase in conversion with some sales training and the development of a unique selling proposition and guarantee. Once the techniques are effectively implemented, they could have an immediate impact on the bottom line because clients decide relatively quickly.
However, if a company is selling software, those same sales technique improvements would take much longer to reach the bottom line because the sales cycle could be 3 to 6 months or more. The key takeaway is to expect to see measured improvement a full sales cycle AFTER your company has effectively implemented the enhancements.
Average Transaction Size: This will also generally follow the sales cycle. If a cross sell or upsell is integrated into the sales process, results could be seen within the typical sales cycle. "Would you like fries with that?" Could have an impact the day it is implemented. Adding some custom options to the software our software company sold would likely be measured in months. It is possible the implemented changes could pay dividends in a shorter period than the sales cycle as prospects would be at various stages in the decision-making process.
Average Annual Number of Transactions Per Client: The time to see an impact will vary greatly by the industry. Creative programs to ask clients back after the first transaction would have a quick impact on a restaurant, coffee shop, bookstore, grocery store, hair salon and other businesses where loyal clients visit frequently. A chiropractor might not see a measured increase for several months. The key to remember is that multiple transactions depend on the first experience going well! A 5% increase in client retention can result in a 25% to 125% increase in profit depending on the industry.
Profit Margin: Profit margin can be impacted almost immediately with the right strategy. If a business negotiates a blanket order with a 5% decrease in their cost of goods from their vendor, it can go immediately to the bottom line. A 5% increase in prices will also increase profits as soon as it is implemented. Many businesses have not increased their prices for years and have watched it erode their bottom line. The New Year is the perfect time to align prices with the value you provide. Eliminating habitual discounting in the sales process can also have a major impact. Overall, the profit margin often offers the fastest way to bottom line impact.
If we now take a second to look at our plans for a fast start to 2021, you can see that it starts with actions taken right now. For companies with longer sales cycles, the early 2021 results will be a result of actions taken in third quarter 2020. If your business has a short sales cycle, there is still time to get off to a fast start in 2021. If your business has a sales cycle measured in months, there is no time like the present to be taking ACTION to impact the second quarter. Remember that a 1% improvement each week equates to a 67% improvement in a year. Best wishes for a prosperous new year and a renewed sense of urgency.
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