How to Cut Your Costs and Increase Your Sales
When a mid-year review of your bottom line reveals you must cut costs and increase sales right now or face losses this fiscal year, what do you do to salvage your year? On paper, the choices look easy. You must either sell more or decrease the cost of sales.
Selling more can be tough when the economy is challenging, yet there are always people ready to buy if the pricing and timing are right. You can achieve increase sales volume by selling a few more big-ticket items or lots more lower-priced items. If you keep in mind that your real objective is to increase profits, not just the dollar amount or number of items sold, you can offer incentives in the form of price cuts or discounts to move more product and reduce warehousing costs. Depending on your product, you can pursue the economics of selling fewer at a higher price, which can still produce more revenue in some cases.
When you are in a sales crunch, you should remove underperforming products in your line. If a product isn't selling well, that usually means that it has been replaced by something else and demand is low. Selling requires more efforts. In a time when you need to have your effort count, you are wasting time that you should redirect to better performing products when you are selling yesterday's product.
Your alternative to selling more is reducing the cost of sales. Decreasing staff or cutting commissions are morale-busters. A better idea is to reduce the cost of sales calls, perhaps through more use of online meetings and video conferences. For small customers, you might have your sales force do more work by phone.
Even though your company may value small customers, you might get more quick return by focusing on big fish - the customer who buys more or who buys more big-ticket items. If you offer incentives or early commitments or buy or set up stocking programs, you may successfully increase your sales, reduce your cost of sales, and increase your profits.
For both the customers you handle by phone and the ones you deal with face-to-face, you should try to increase the amount of sales, perhaps through upsells. The candy-and-batteries-at-checkout approach can work well with all types of product sales.
When times are tough for your company, you need to come up with creative ways to keep customers coming back for more so you can increase sales while cutting costs.
Selling more can be tough when the economy is challenging, yet there are always people ready to buy if the pricing and timing are right. You can achieve increase sales volume by selling a few more big-ticket items or lots more lower-priced items. If you keep in mind that your real objective is to increase profits, not just the dollar amount or number of items sold, you can offer incentives in the form of price cuts or discounts to move more product and reduce warehousing costs. Depending on your product, you can pursue the economics of selling fewer at a higher price, which can still produce more revenue in some cases.
When you are in a sales crunch, you should remove underperforming products in your line. If a product isn't selling well, that usually means that it has been replaced by something else and demand is low. Selling requires more efforts. In a time when you need to have your effort count, you are wasting time that you should redirect to better performing products when you are selling yesterday's product.
Your alternative to selling more is reducing the cost of sales. Decreasing staff or cutting commissions are morale-busters. A better idea is to reduce the cost of sales calls, perhaps through more use of online meetings and video conferences. For small customers, you might have your sales force do more work by phone.
Even though your company may value small customers, you might get more quick return by focusing on big fish - the customer who buys more or who buys more big-ticket items. If you offer incentives or early commitments or buy or set up stocking programs, you may successfully increase your sales, reduce your cost of sales, and increase your profits.
For both the customers you handle by phone and the ones you deal with face-to-face, you should try to increase the amount of sales, perhaps through upsells. The candy-and-batteries-at-checkout approach can work well with all types of product sales.
When times are tough for your company, you need to come up with creative ways to keep customers coming back for more so you can increase sales while cutting costs.
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