Learn how to dramatically increase you sales with three small tweaks to your business.
Many organizations and salespeople have the long-term goal of doubling sales. But that’s simply outrageous. Right?
Actually, no. In fact, it’s not outrageous at all. You simply need the right strategy to get there. Or, more accurately, the right formula.
Jill is the owner of a $1M marketing company that unfortunately is not producing much profit at the current level of revenues. She recognizes that in order to achieve her profitability goals, she must double sales. This sounds like a herculean task, but it doesn’t have to be. Just a few key tweaks to her business model will allow Jill to achieve her ambitious sales goal.
There are three basic ways to increase sales in a business like Jill’s: She can increase her conversion ratio of closed sales, her average sale size, or, finally, her prospect pipeline. When most people want to increase sales at their organization, they zero in on just one of these approaches, but the best strategy is to combine all three.
Jill uses the Sales CAP FormulaTM to lay out her strategy for doubling sales over the next two years. The Sales CAP FormulaTM is simply:
2X Sales = 1.26 x CAP
2X Sales = 1.26(Conversion Ration) x 1.26(Average Sales Size) x 1.26(Prospect Pipeline)
Forgive the math. But what this simple formula illustrates is truly extraordinary: In order for Jill to double sales, she simply has to increase each of the three areas by 26%. That’s it. Let’s break this down using Jill’s business figures.
Right now, Jill makes $1M with her business in the following way:
Her closing ratio is 10%. This means that out of every 10 prospects that she meets, she closes one sale. Her average sales size is $100,000. Her pipeline includes 100 prospects over the course of the year.
Or, 10% x $100,000 x 100 = $1,000,000
Not bad, but she wants to double her revenues, so according to the Sales CAP FormulaTM, she must increase each of these three areas by 26%.
Her new closing ratio must now be 12.6%. Her average sale size must increase to $126,000.
Finally, her pipeline must consist of 126 prospects over the course of the year.
Or, 1.26(10%) x 1.26($100,000) x 1.26(100)
Not huge changes. By increasing each of these areas by 26%, her new revenues will be:
12.6% x $126,000 x 126 = $2,000,376
This is a huge change that comes from some small tweaks. By applying this Sales CAP FormulaTM, you too can dramatically increase your sales. The formula is also adjustable, so it can accommodate your personal sales goals. Say, for example, your goal is not to double sales, but rather to increase sales by 50%. You simply adjust the percentage of increase in your Sales CAP FormulaTM to 15% in each area.
Creating a massive change to your sales doesn’t require drastic action, but rather, small and intentional changes in a few key areas that ultimately get you to where you want to be.
Which of these three areas have you neglected the most? Please share below in the comments.
Enjoyed this article? Please share away!
Get instant access to our free sales training:
Why Prospects Push Back on Price, Give 'Think-It-Overs,' and Ghost in Sales Until They Meet a Sales Superstar Who Is Following These 7 Simple Keys
About the Author Marc Wayshak
Marc is is the best-selling author of three books on sales and leadership, including the highly acclaimed titles Game Plan Selling, The High-Velocity Sales Organization and his forthcoming book, Sales Conversations, Mastered.
Marc is a contributor to Inc, HubSpot, Fast Company, Entrepreneur Magazine, and Huffington Post Business. He also hosts a popular YouTube channel on sales strategy with over 103,000 subscribers.
Marc helps thousands of people his data-driven, science-based approach to selling that utilizes all the best tools available to sales organizations today.