In the current challenging economic environment, SME owners and entrepreneurs need to do what they can in order to keep their heads above water. According to Christo Botes of Business Partners, a company that invests in entrepreneurial ventures in Africa, a sure method to ensure that a business survives tough periods is to increase sales or services, which will result in a direct increase in profit.
Botes says that a very effective method of increasing sales could be to build up a business’ loyal customer base. “Instead of focusing all attention and efforts on attracting new customers, ensure that the business is spending enough time and effort on keeping the current customer base. Shift the sales focus and strategy from attracting new customers to appealing to proven customers to buy again.
“It is often said that the best sales prospect is a prospect that’s already converted, in other words, an already committed customer.”
He says that a loyal and satisfied customer can also often be a business’ best source of new customers, as they are able to best testify independently of the business’ uncompromised customer service offering to prospective customers. “In some business models it is even common practice to pay a referral commission or fee to an existing loyal customer that successfully introduces a new customer to the business.”
Botes says that SMEs and entrepreneurs should also consider how to add value to service offerings or products for customers. “Customers often appreciate value and will return to a supplier that is able to offer them this, along with good service. It is often helpful to ask yourself whether you are able to offer more value to customers and how the business is able to improve the service that is already being provided.”
He says that a popular strategy when trying to increase sales is to get staff involved in the process. “Many businesses make use of an incentives programme to motivate staff to sell or promote products to clients. Not only will this motivate staff to increase their own sales, but will also boost morale amongst staff as they will feel more involved in the business’ operations and success.
“An example of an incentives programme is to compensate staff with a percentage of each product sold above a certain amount, or to reward staff with the highest turnover with select prizes. Businesses do however need to be wary of not only chasing sales, and it is recommended that commission structures also include other measures, such as a customer satisfaction score, as well as a customer retention score. An objective and balanced scorecard usually curbs a short-term sales driven mentality to a long-term customer retention approach.”
Botes says that a helpful tool when looking to increase sales is a marketing drive. “Traditional methods such as posters, flyers and adverts in business directories are all tools that will assist in boosting sales and building up a customer base. Other methods of marketing, such as public relations, can also assist in the long-term by positioning a business, as well as its products and services as ‘top of mind’ among potential customers, via the media or other strategic channels such as social media.
“It is however important that a business takes a targeted approach when it comes to marketing activities. Decide which types of people might be interested in your product or service and then target them. Often, when trying to market to everyone, a business will end up targeting nobody.”
He explains that improving sales is however generally a long-term commitment. “Entrepreneurs need to have patience when implementing strategies to improve sales and need to stick to these strategies in the long-term in order to succeed,” concludes Botes.