Can you learn how to sell more products? How can you make more money through sales?
To sell more products, you need to know how to attract and keep the right customers. Additionally, understanding how to increase sales margins on each product will help you to increase your earnings.
Read on to learn how to make more money in sales.
How to Increase Sales Revenue
When thinking about how to sell more products, you should think about both increasing frequency (the number of products you sell) and sales margins (the amount of money you earn per sale). Earning more money per product and selling more products increases revenue, making your company more profitable, sustainable, and prosperous.
To increase margins, charge four times the material and production cost of your products. These higher prices imply better-quality products, attracting customers. To increase sales frequency, embrace a specific area of your industry and expand your offerings within that niche. Specialization encourages customers to buy more products because they trust you to meet their needs within that niche.
For example, say you sell graduation caps and gowns. When you increase your prices, you attract more customers who want high-quality products. You also start selling graduation cards and diploma frames, becoming popular as a one-stop shop for graduates and their families.
|Other Methods to Increase Sales Margins and Frequency
In The Personal MBA, Josh Kaufman offers an alternative formula for price-setting: price = material and production costs + desired profit percentage. For example, if the cost was $10 and you wanted to make 40% profit, you’d set the price to $14 (as opposed to $40).
Why would you use a formula that produces lower prices and therefore smaller margin increases? The answer arguably lies in the variable profit margins in different industries. For example, restaurants often have a 3%-5% profit margin. Raising prices too far beyond your industry’s average could drive customers away, instead of attracting them by implying high quality—so, Kaufman’s formula may work in this case.
When it comes to increasing the number of products you sell, other experts recommend marketing additional products based on customers’ past purchases. For example, say you run a pet store and a customer bought a dog bed from you. You may then market dog toys and leashes to that customer, as their previous purchase shows they’ll likely be interested. This is similar to the specialization suggestion—you encourage the customer to trust you to once again meet their needs within a specific niche (in this case, dog supplies) since you did so before.
Exercise: Identify and Attract Your Ideal Customers
Attracting enough customers to meet your sales goals is one of your company’s most essential requirements. But it’s important to attract the right kind of customers—those who are both likely to buy from you and are enjoyable to serve. In this exercise, you’ll identify your ideal customers and brainstorm ways to attract them.
- Describe your three best customers—the ones who bring in a lot of revenue and that you enjoy serving. What are the personal traits that make them buy from you? Note: Age, income, passions, and priorities are good places to start. (For example, say you run a nail salon. Your first customer is 50 years old, will pay more for high-quality work, and is local. The second is 25, a lover of nail art, and local. The third is 40, will pay more for high-quality work, and is local.)
- Next, briefly describe the personal traits that make your best customers enjoyable to serve. (For example, your first customer is quiet and reserved, which is enjoyable because it lets you work without distractions. The second is also quiet and tips well. The third is cheerful and knowledgeable about nail art, which makes her enjoyable to talk to.)
- Now, look at your descriptions from the first two questions and paste any shared traits here. Note: If you struggle to identify shared traits, brainstorm more traits for your best customers or add a few more customers to your description pool. (For example, you’d paste the following here: will pay more for high-quality work, local, and quiet.)
- Finally, identify ways to attract people with the shared revenue-generating traits. What services, amenities, or products would they favor? How can you reach them (for instance, via magazines, TV ads, or social media)? (For example, to attract people who live nearby, you may advertise locally. To attract people who will pay more for high-quality work, you may post pictures of your best work on Facebook.)
- Finally, identify ways to attract people with the traits that make them enjoyable to serve. What services, amenities, or products would they favor? How can you reach them? (For example, to attract people who are quiet, you may market your salon as quiet and peaceful, and you may put fliers in libraries and bookshops.)