3 Levers that Increase Sales

“Good artists copy; great artists steal”- Pablo Picasso

Pre Introduction: 

I will start with a confession. I stole the intro of this article from a good friend of mine, Andres Navia. The rest is a remix of research, other authors, and real-life experimentation. 

Introduction: 

First, start with the end goal in mind. What do we eventually want to achieve in marketing and sales? 

In two words: Sell More.

In business there are two kinds of problems:

1. Not enough sales 

2. Every other kind of problem 

The 3 Levers:

So how can we win in marketing and sales? First, keep it simple. Clarity is power. We must first understand what increases sales. Three levers increase sales, not one. 

Our short-sighted error is that we need more clients to increase sales. Although this is true, it's not the only way, and it's an incomplete strategy. There are two additional strategies that complement each other.

Three levers to Increase Revenue:

1. Increase the number of clients

2. Increase revenue per client  

3. Increase the frequency of purchase over time 

Why is this so important? 

Because by increasing these three variables, they compound with each other producing a multiplier effect. Not only does this strategy yield more growth, but it is also easier to execute. It's easier to increase the number of clients by 30%, revenue per customer by 30%, and the frequency of purchase by 30% than growing the number of clients in one year by 100%. Do a quick experiment right now with your business. Hypothetically, increase these three levers by 30% and see how your sales jump up to 120%, not 90%. Don't do it for math's sake, but to see how feasible and easier it will be.    

*In the note section at the end of the article, I illustrate an example of projecting sales using this tactic.

Examples and tips on the 3 levers:

1. Increase the number of clients

In the case of digital marketing, what we recommend to our clients is to increase targeted website traffic that eventually yields more leads, which consequently generates more clients. Ideally, you would want to create proprietary digital assets that generate traffic organically (with no or minimal paid traffic over time). Making proprietary digital assets is the subject to another blog post that I will go into much detail later.

2. Increase revenue per client (Offer additional products or services)  

Here is where people get lost. You can't get this right by having an internal meeting with your colleagues or partners. You need to talk to your clients. Understand their pain points, not nice to have things. If you can do it better or cheaper and it can be applied to the rest of your customers, do it. Tell your first customers that it's a prototype and that they will get a discount. Why offer a discount and have a prototype speech? Because you need to set the expectation that you do not know what you are doing, therefore, as an amateur, you can not charge a full price. Record and track everything you do. Create a case study out of this prototype and market your results to the rest of your customers. After doing this initiative write to me and let me know your marketing ROI.

3. Increase the frequency of purchase over time

Have a maintenance fee in mind. Start by selling a project to your new customer. A project means no strings attached. No one wants someone clinging at the beginning. Play nonchalant at first, even though you secretly want a long term relationship. Don't leave your customers, especially if you have something going on. Good news, monogamy is not a thing in business. You can have a causal relationship with your customers; non-exclusivity is not a deal-breaker. These new projects can be applied to existing customers when offering new services or new customers who do not want a full-blown commitment. Either way, have a low maintenance fee in mind, if you do a good job, they are going to knock on your door eventually. Have something to offer them on a recurring basis. 

Conclusion: 

Create a marketing plan that focuses on increasing all three levers and have a specific growth percentage goal for each. Assemble marketing pieces for your existing customers. Develop valuable content, create presentations, and case studies of the new initiatives you are doing within other existing customers. Give them more ideas on how you can help, show them how you can grow together. Also, give them flexible options so they can keep hanging around and do business with you without too much commitment. Think Apple. Sell different products to your existing customers. Later, sell them different versions of those products every two years. Then license them software that connects all prior products together for a small monthly fee. In this manner, you want to be like Apple in the sense that they turn customers into raving fans, which in turn become perpetual revenue-generating machines.

Special thanks to Andres Navia. The section that I stole from Andres can be found in an article he wrote earlier: Link.

Note Section:

* Below is an example of a company that has 10 customers and charges a monthly service fee of $1000 dollars. The average amount of months it charges its customers is 3 months. For the company's year 2 projections there, the graph illustrates two scenarios. Scenario 1: The company doubles its sales from 10 clients to 20 clients (100% Increase), all things equal; this yields $60.000 in sales, a 100% increase. Scenario 2: In contrast, the company only increases the number of clients from 10 clients to 13 clients (30% Increase) and makes the same increase in price and frequency, yielding $65,910 in sales, a 120% increase.

Still curios? Here is a link with a spreadsheet where you can play with the numbers: Link