By Aaron Smith, KX Pilates founder Many in the franchising industry believe that you shouldn’t recruit franchisees with zero business experience. Here’s why I think business experience matters less than you think. There’s a standard list in franchising that outlines what traits potential franchisees should have and ‘past business experience’ or ‘business acumen’ is often Read More…
Stop Selling Like a Dinosaur!
Tue 11 October 2016 - 9:32 amSmall Business | Strategy
When I say ‘stop selling like a dinosaur’, I’m referring to the old school approach of promoting your business – think letter box drops, lead boxes, door knocking. This scattergun approach tends to take up at lot of time and result in a low conversion.
These days there are many more effective ways for you to boost your sales potential, and often you don’t even need to leave your desk.
The most effective modern marketing methods at the moment include targeted Facebook campaigns, email advertising, lead pages with specific content that would interest and engage your audience and re-targeting techniques which help you re-engage the people who have previously visited your website.
With that in mind, here are some things to keep in mind when selling your product to your audience, as well as proven strategies that work.
Creating Sales Funnels
When I talk about creating sales funnels, I ‘m referring to setting up a series of steps that will allow you to interact with potential new customers. To do this, start with something that is low pressure, low cost and low risk for them.
For example, earlier this year I created a free report that was full of relevant new information for my audience. I promoted the free report with a basic ad on Facebook that was targeted to my niche and because there was a high-perceived value of the report and zero risk for the customer, I had more than 800 people download it.
From there I was able to capture their contact details and follow up with them with information on an event/ workshop that I was running. I was also able to set up a sequential email campaign offering more great content and value to help build trust and build a connection with them.
So in summary, in this example my funnel was:
- Facebook advert
- Free download
- Free report
- Discounted Invite to my event
- They receive sequential email series with a weekly tip or resource
Optimising Conversion Rates
Many businesses are now aware of the importance of marketing for any successful venture, however they often overlook enormous amounts of missed opportunities by having holes in their sale funnel.
The sales funnel simply describes the different stages a buyer will go through on the way from being a prospect client to a paying one.
The stages might include, but are not limited to, an online opt-in form, a phone conversation, a face to face meeting and a follow-up call afterwards if they didn’t buy.
Optimising your conversion rates requires several steps including:
- measure your conversion % in each step of the sales process
- identifying which step in the sales process are performing the poorest
- Evaluating the process
- Improving the process and up-skilling staff as needed
- Measuring improvements monthly
A gym owner may get:
- 100 inquiries a month
- get 50% to attend a 1on1 sales presentation and
- get 50% started on a program as a paying client
- so in this example 25 new members start per month or 300 people per year
In this business more than 50% of the marketing leads are being lost between steps 1 and 2. 100 people inquire, but only 50 people come in for a gym tour.
By improving this gyms ‘show rate’ by just 10%, the impact is as follows
- 100 inquiries a month
- get 60% to attend a 1on1 sales presentation and
- get 50% started on a program as a paying client
- so in this example 30 people start per month or 360 people per year – that’s an extra 60 paying members each year
If, hypothetically, members pay $20 per week, that tiny 10% improvement in 1 small step of the sales funnel will add $62,400 in additional annual profit
What gets even more exciting is that 10% improvements are not that difficult to achieve so after you apply this strategy to one step of your sales funnel, there’s no reason you cannot do the same to another stage and to further increase your profit.
There are 2 ways to increase revenue: get more clients or increase the average spend
Two of the best ways to get your existing customers to increase their average spend per transaction is to upsell or cross sell.
McDonald’s and like-minded fast food companies revolutionized the upsell technique in the 1990’s, giving buyers the option to “SUPERSIZE” to a larger serving by paying slightly more. The higher you went up the chain of product options, the better value you received – so more than 50% of people would take the option.
Cross selling is when you offer an existing member or customer an additional product. For example, one owner of a chain of movie theatres worked out if he found a way to encourage visitors to spend and extra 50cents at the snack bar this would equate to annual increase in revenue of over $4million dollars
To help get referrals, it helps to set up a referral system to incentivize people to promote your business for you. One example of how you can do this is by setting up a kick back program, where you give money, product or a reward to the people who are sending business your way.
For example, if your existing customers are referring their friends and contacts to come to your business, perhaps you can give them a few complimentary sessions, or add to their membership in thanks each time that make you $500. Or perhaps you can offer them a discount if they assist your business frequently.
With other businesses, you can set up a kick back reward system. For example, if the local physio is sending clients to your gym, you can give him a kick back on the money you are making and visa versa. You can send clients back him way and get a kick back yourself.
This way neither party feels that they are doing more work than the other because you are both winning.
When calling existing or potential new customers, it helps to have a script on hand so that you know exactly what you want to say and you can position yourself as an authority.
It also will allow you to get straight to the point so the person on the other end of the line doesn’t get frustrated waiting for you to make one.
Having some good questions ready to go is also a great way to find out what the prospects biggest challenges are and how you can best help them and, hopefully, win their business
Training your Team
Train your team well and they will be your greatest asset because at the end of the day. If you spend all of your time as the business owner working on the small tasks, it can infringe upon your ability to grow.
When it comes to having people work for you, it helps to have pre-made templates for them to use to help them do their job correctly. This will help ensure quality control and prevent them from missing any steps.
Also take the time to have a team ‘work in progress’ (WIP) each week. Your team members can learn from each other and will feel as though they are part of the biggest picture if they can see what everyone else is working on and how their contribution helps the end game. It’s also a good way to get the team to work together.
Finally, education for your team members is crucial. Make time for education days and share your knowledge, and don’t be opposed to inviting outside experts in to share their knowledge too. Knowledge is power and the more your team know and the more confident they feel the better they get and the better it will be for your business.
About the author
Steve Grant, founder of Gym Hub, is a passionate entrepreneur with 18 years of fitness industry experience including 4 years as a Health and Wellness Lecturer at ACPE and 8 years as the owner of one of Sydney’s most profitable fitness studios.
- May 21 2019 Making teamwork work
- April 17 2019 6 tips for building millions in revenue
- April 1 2019 The four leadership “blind spots”
- March 25 2019 How three small Victoria brands grew from social media