Whilst many businesses enjoy regular recurring income, many need to be proactively seeking new orders and new customers at all times. In good times you can just sit back and wait for the business to flood in, but not when economic conditions are difficult.
Unfortunately, many business owners had gotten used to the good times and forgotten how to proactively drum up more sales. This year, more and more business owners seem to be acting sooner to ensure the funnel which is their sales pipeline is kept topped up. It’s a funnel because only a small proportion of the prospective customers you have contact with will turn into actual customers and only so many quotes or proposals you give out will be accepted. Here’s a good illustration of a sales funnel:
The best way to keep your sales funnel topped up is to divide your sales between recurring work and non-recurring work. Then calculate the average non-recurring sale by dividing the total non-recurring sales by the number of non-recurring sales made. Having done that, work out firstly what percentage of quotes or proposals turn into sales and secondly, what percentage of prospective or existing customer contacts (depending how you prospect for sales e.g. by telephone or in person or both) end up giving you the opportunity to quote or make a proposal. Add a margin for error and hey presto, you now know how many prospective or existing customer contacts you need to make in any given period. If you build this into your regular routine your sales funnel will runneth over!
If you need help keeping your sales funnel topped up contact Nick.
