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To get more sales and profits, we need to create more products to sell or increase prices right? 

NOPE. Not necessarily.

Sometimes, it could just be a simple tweak in your sales process that creates the most impact.

In order to know what to tweak, we have to make sense of our data. 

When I hop on consult calls with clients, the very first thing I do is to ask them for their data.

Without their marketing metrics, I can’t provide much actionable insights. 

But once the data is known, it’s a very logical process knowing what can be improved. 

There are just a few key metrics to know which I will explain in a bit. 

But here’s the list of metrics we need to know.

• Ad spend 
• No. of leads (and cost per lead) 
• No. of appointments 
• No. of sales 
• % of leads to appointments 
• % of appointments to sales 
• Cost per sale (customer acquisition cost)

The key metrics to look at are:

1) % of leads to appointments

2) % of appointments to sales

3) Cost per sale

Note:

To make better sense of what I’m going to explain, I’m going to assume that:

– This business is running ads

– It is a service-based business

– It is already selling an existing product/service

Back to the metrics above, and based on my assumptions, you’ll realise I don’t really look at cost per lead. 

To me, knowing the cost per lead doesn’t provide much help in fixing the overall sales process. 

Getting $1 leads but not having any of the leads buy my services just doesn’t make sense to me.

I’d rather get a $100 lead who is willing to spend $1000 with me.

So for the purpose of what I’m going to explain, I won’t focus on cost per lead.

However, please note that if you’re not even getting any leads in the first place…

Or your cost per lead is ridiculously high from average…

Then you got to relook at your offer or ad angle.

(What are you selling, who are you targeting, what’s your price.)

Assuming you already have a product/service that’s selling, and you’re getting industry average cost per lead…

There are 2 key metrics to look at that can help you increase profits without you having to create more products or increase your price.

Understanding % of leads to appointments

From the many conversations I’ve had with business owners…

This is the part where businesses don’t have it fully optimised. 

Which is moving their leads to an appointment.

Let’s do a quick calculation:

If you have 100 leads, and you have a 10% appointment rate, that means you meet 10 people.

Assuming of the 10 people, you close 2 people paying $1k each (20% closing rate).

You get $2k in sales.

If you can double your appointment rate to 20%, while keeping the same 20% closure rate, you get to double your sales to $4k. 

The question here is, how can we increase our appointment rates?

Well, the most unhelpful answer – it depends.

It depends what works in your industry and what works BEST for you. 

But I don’t want to be unhelpful.

If I were to sum it up fast, it has got to do with:

1) How FAST you follow up (within 1 hour, same day, or few days later)

2) How you follow up (call, whatsapp, email)

Why I say it depends on what works best for your industry is because I understand there is no one fixed formula for every industry. 

If you’re in tuition, and you try to call your leads, they are likely parents who are working and can’t pick up your call. So you gotta text. 

If you’re in real estate, and you try to text your leads, they are likely to ghost you. 

So you need to know what’s already working well and do more of it.

Plus, different people have different skill sets.

One may be more comfortable in texting versus calling. 

That’s why I have no clear answer for you – all I know is you gotta do what it takes to bring that 10% appointment rate up to 20% as much as possible.

Whether it’s by automating your Whatsapp follow ups, hiring a team of 20 people to call…

You need to execute more changes here until you hit your best lead to appointment rate.

For example…

I’ve seen a business having a sales team of 10-15 people responding to Messenger almost instantly, setting appointments and closing these leads.

This works well for them.

I’ve also seen salespeople calling the leads on the day itself, and if no one picks up, they call again the next day. 

And they’ve already optimised their script, knowing what to say to get them to meet up.

Through trials and errors, they arrived at what works best for them.

Understanding % of appointments to sales

I’ve worked with coaches, real estate agents, service businesses, product businesses…

And they all make a sale differently.

Some make a sale via a webinar.

Some make a sale via a face-to-face appointment.

Some make a sale only after months of serving the customer. 

What’s important though is you gotta have a rough % of how many of your appointments you are closing.

This is to give you a sense of:

Whether your leads are of quality

Whether your offer or ad angle is working well

And most importantly, whether to change the way you’re closing a lead.

For example…

I’ve seen a business owner having a higher closing rate by offering monthly packages instead of quarterly packages. 

This is probably due to a lower price point and makes it easier for people to commit.

Making this small tweak has allowed this business to increase their sales without increasing prices or doing anything special.

There is one important metric I look at when advising businesses… but understanding this metric has got to do with increasing more products to sell.

And the metric is: customer acquisition cost

Understanding customer acquisition cost

To make perfect sense of this metric, you need to first know what’s the maximum amount of $ someone can spend with you. 

Let’s say I run an educational workshop for kids, and the maximum amount I can sell to a parent is just $500.

And assuming my cost per sale (customer acquisition cost) is $250.

This leaves me with just a gross profit of $250 – and I don’t get to make a huge margin after factoring operating costs.

Does this make sense?

Maybe, maybe not.

What can I do though?

To think about how I can increase the amount of $ they can spend with me. 

Perhaps instead of $500, I need to bring that amount up to $2.5k. 

Fix one thing at a time

I can probably write a 10000 word article on this topic, citing lots and lots of examples.

But the key message here is to know what to fix, and to fix one thing at a time.

If your leads aren’t coming in as much as you’d like to…

Then run more ads, test more offers.

If your leads are coming in, but they are not converting to sales…

Then look at your appointment rates and closing rates, and see what can be done to improve.

It’s as simple as that.

But sometimes, the simple things are also complex to fix. 

That’s entrepreneurship for you.

I myself am on this journey…

So I know the game can be tough at times.

If you’re a business owner, keep on going on! 💪