Once we have analysed our sales by leads, conversion rate, the number of times our customers buy from us and our average sale
we need to look at the last of the 5 ways to examine how profitable our sales are.
We need to measure the profitability of each of our main groups of products. Overall profits can mask low margins or even losses on some of our products.
By setting up a league table of profitability by product type we can identify products that need to have our prices increased on or even to discontinue selling that product.
Increasing overall profitability can also about stopping doing things as well as doing more things.
One of the fastest ways to increase our profits is to increase our prices. Many business owners are slow to increase their prices for fear of losing customers.
We should study our products and/or services to find out what is important to our customer when making their purchase – find out what we are selling.
This can be a deceptively difficult thing to know. Typically, we are selling different things to different segments of our customers – even when they are buying the same or similar products and services!
Usually it is more than just price that influences our customers to buy from us and – more importantly – to keep buying from us.
Once you are clear on what your customers are buying from you, it becomes a lot easier to increase prices.
Nest week we will look at the simple tool we can use to find out what our customers are buying from us.
If you would like to find out how to increase prices in your business, contact me on firstname.lastname@example.org