In business you have competitors and your ability to compete and win sales, without lowering prices determines who has the “Profit Share” in the marketplace.
Having the highest income in your city is nice, but having the highest net profit margin business in your industry and area determines who will weather the storm of a downsize in an industry and who has the least amount of stress as the business owner.
The price that you sell your services directly effects the cash levels in your business bank account, the net profit margin of your business and how much cash you have to fund the growth of your business and its speed of growth.
Calcuating your sales prices is super important.
Typically businesses sell their services at a price determined by a combination of these ingredients…
- The Costs of Sales related to the job
- The amount of work/sales the business has – i.e. the “desperation factor”
- How much the business wants the type of work/job
- The difficulty of the job
- Competitors likely prices for the job
- How lucky the person pricing feels about winning the job
- Location, ease of access of the job etc.
If you’re using a few of these, that may not be a formula for pricing, it may be a rough calculation.
Certainty is what is needed when selling. Certainty increases the likelihood of winning the sale.
People pick up on doubt, and doubt is seen in people’s behaviours in selling situations.
Doubt is seen when people hesitate to tell people the price verbally and instead want to put it in writing to present it to prospects so they have to read it, in a quote or by email. (This also reduces conversion rates)
Doubt with pricing will be present when no formula for selling is used to obtain the sales price.
Using a system that has a formula, that reveals the gross margin on labour and materials for the sale prices removes the doubt.
The minimum sales price gross margin figure is extremely important to know for your business as it directly effects the profitability, cash in the bank and stress levels in you.
If you don’t use a formula now, you can have one in a couple of mentoring sessions. That’s all it takes thanks the supply of an Excel template used by hundreds of clients up to $20 Million revenue.
How to Win More Sales, Even at High Margins
There are dozens of effective strategies to win sales at high profit margins, even against tough competitors.
The first step is to know your business’ lead to sale conversion rate for each month.
When its not being measured its ‘out of sight’ and out of mind’.
Businesses that first measure it are shocked or surprised at how much lower it is than they assumed, plus how much it can vary month to month.
For 27 years strategies to increase it have been identified, applied and refined to take the guess work out of increasing the figure.
Few business owners recognise the power of this one strategy, but here’s an example…
If a business with a $1,000,000 revenue has a lead to sale conversion rate of 30% and increases it to 36% (easily achieved), what will be the new revenue of the business?
90% of business owners surveyed with this question reply with $1006,000, a 6% increase.
The actual figure is $1,200,000 – a $200,000 increase.
To increase 30% to 36% is a 20% increase, not a 6% increase.
Possibly the Fastest Ways to Increase Income
Hundreds of businesses have benefited from increased revenue from conversion rate strategies shared with them.
Some have seen increases of 367% in one month as a real estate agent experienced.
An engineering/manufacturing company in QLD saw a $400,000 increase in monthly sales on their usual $600,000 figure, in one month as a result of a one-day selling skills training.
What if you could find a way to increase your revenue by 20% to 300% in a month?
What if you could put together an accurate formula for pricing for your business, based on facts found in your Profit & Loss Statement that removes any doubt about what your prices needed to be?
Identifying your minimum selling price and gross margin, and/or how to increase your sales conversion rates are topics you receive assistance with in our business mentoring services.
In two or three session you’ll be certain of your pricing formula and be confident to let people know your prices verbally, to win more sales.
Find out more in a ‘Breakthrough Meeting‘ discussion to talk about your business and situation. There’s no cost for this initial discussion meeting.