Conventional and unconventional methods to spike your sales volume
There is a term known as ‘ kaizen’ which translates to continuous improvement. The whole organization aiming towards improving everything from product to placement would surely lead to increased sales. Toyota Kaizen Method: Six Steps to Improvement by Kato and Smalley, 2011 is a good read in this regard.
Sales are not only about profit or growth, it factors in other elements like brand awareness, reputation, and cash flow for smoother daily business activities. This would help achieve steady growth even when the economy is unfavourable.
Higher sales would not only improve the financial position but will also act as a motivating force for the employees as a company with improving sales would ensure job security. Sure, sales can be improved via direct marketing tools, but there is more to that than just using marketing tactics.
Analyzing the expected sales performance without the sales improvement methods
Sales-force composite includes adding the forecasts of sales of the internal employees.
Delphi method refers to the qualitative methods that consult a group of experts for sales forecasting.0
The jury of experts consults the internal experts of the organization to forecast sales.
Time-series analysis assesses the past data to predict the future sales pattern by extrapolating the graph.
Improvise, adapt, overcome.
SWOT (Strengths, Weaknesses, Opportunities and Threats) is a tool that helps to identify the firm’s strengths to use and amplify, Weaknesses to overcome, Opportunities to identify and dive in, and Threats to eliminate or counter. Only when the firm is aware of these elements, can it work on them. A core competency can then be defining choice that would later go on to improve sales.
Opportunity cost (the next best alternative forgone) can be decided on when all the options are assessed via cost-benefit analysis. Better decision making in any or every department will, directly and indirectly, affect the aggregate sales.
SMART goals (Specific, Measurable, Attainable, Realistic and Time-specific) and Management By Objectives (MBO) can be helpful in the smooth adaption of the goals set in regards to SWOT, core competency and opportunity cost findings. These would help measure the performance over the goals set. Smart goals and MBO can either be used directly for sales goals or others that support the improvement in sales. A study suggests SMART goals are essential for firms.
According to ( Stimpson and Farquharson, 2010), businesses often fail due to a lack of record-keeping, and this includes sales records as well. There could be a slight reduction in sales each month and the firm probably won’t notice it until it’s too late. There could also be a slight improvement in sales due to an action and the firm would not be keen to dive in and earn an improvement in sales.
Market size refers to the number of potential consumers in the market. Market growth defines the rate of new consumers of a product in a particular market. Combine these two and you will be able to identify if the organization should diversify into other markets or focus on further capturing the current market.
Imagine making a product that nobody wants or making very limited sales. This can be prevented by conducting marketing research. Primary and secondary research along with qualitative and quantitative data would provide a clear image. Qualtrics can be used to form questionnaires. Consequently, this would also provide an insight into which of Ansoff’s matrix strategy would be suitable. To learn more, read Marketing Research: Delivering Customer Insight by Wilson, 2018.
Globalization would boost sales as the presence in another market would improve the customer base and help in customer retention. It would also lead to diversification of risks into other markets too.
To succeed in the globalization strategy (diversification) or product development, the STP process (segment, target, and positioning) would up the chances of succeeding and ultimately achieving higher sales. Markets can be segmented into psychographic, demographic, geographic and behavioural factors. Generally, one or more go together.
STP process also accounts for Targeting, which means marketing to the customers that are more likely to purchase the product. Lastly, positioning focuses on the brand reputation, attributes and positing in the minds of consumers. PR and CSR activities can improve brand positioning. This research article dives deeply into the STP process
A focus on marketing mix strategy to boost sales
According to The Irish Times, 90% of food products fail, so NPD needs to be conducted carefully. Once the market research identifies what the consumers want in the product, the next step would be to produce a new product. This is referred to as the New Product Development (NPD). Steps for NPD are as following (Stimpson and Farquharson, 2010):
1. Brainstorming: employees’ feedback, competitor’s product, sales personal and R&D department.
2. Shortlisting the ideas: Feasible ideas are then shortlisted for further focus.
3. Prototype: sample products based on the final shortlisted idea are then questioned. These would include the targeted audience, expected product features and the production method to be used.
4. Business analysis: SWOT and PESTLE concerning the product.
5. Testing the prototype
6. Test marketing: placing in limited stores to gain feedback
7. Full-fledge launch.
One important concept in the NPD comes from milkshake marketing. According to Harvard business review, it is the idea of what job do the customers want the product to do. For this, there needs to be a deep focus on why, when and where do they purchase and consume the product.
Customers are more likely to purchase a quality-oriented product at a favourable price. (Stimpson and Farquharson, 2010) detail Quality-control techniques including prevention, inception, and correction and improvement.
Aiming for ISO-9000, benchmarking and lean production can help convey the positive quality-oriented image and reduce the wastage cost. This could then act as a USP and product differentiation to obtain a sustainable competitive edge. A durable product would then lead to customer satisfaction.
Brand positioning, recognition, and awareness all aid in branding. This then helps the firms to have higher sales compared to non-branded or local products. The customer’s trust linked to a branded product would provide a sustainable advantage.
Packaging is one of the elements to improve sales. It is the first impression on a potential customer. My modern met shows a few clever packaging. It explains Viktoriya Gadomska’s vitamin boxes with each box designed in the shape of the vitamin tablet type it contains. A customer is more likely to go for Gadomska’s packaging compared to a simple one.
If the product falls in question mark, there is a need for a swift marketing strategy and enhancement in sales, as it is a newly launched product. A star product has good sales but it requires spending on promotion mix. The cash cow can help other products in the product mix as the cash generated from the cash cow can be utilized in other products to improve sales. Though, dog product needs to be replaced as the sales are trended downwards and cannot be improved.
To improve sales, a well-defined promotion mix would be required. It includes above (to reach a huge customer base like TV ads) and below the line promotion (to reach a limited customer base like emails). A combination of informative and persuasive promotion would be more suitable to improve sales. Moreover, the product availability and its features need to be conveyed to the customer.
Some of the sales promotion methods include selling personally to the potential customers, directly mailing the customers on the home address or emailing them, planning an exhibition (e.g., Tesla’s Cybertruck launch event), public relations event or sponsorship with a reputable brand (e.g., Tokyo Olympics 2020’s sponsors).
DAGMAR approach (defining advertising goals for measured advertising results) is an approach to strengthen the promotion mix. This would in turn improve sales.
Urgency in sales can be a quite powerful marketing tool. Potential customers would be keen on buying a newly released iPhone. The research about optimum level of repetition in advertising, which can be linked to urgency has been explained in this research article.
Digital marketing is another great tool to improve sales. It improves brand recognition which leads to higher chances of greater sales. In this current era of covid-19, digital marketing on platforms like Facebook provide the facility of laser targeting for precise ads to potential customers. A Facebook page manager can be hired for sales promotion via content marketing.
Guerilla marketing attempts on extending the brand recognition in the perceptions of customers via an unconventional marketing gimmick. Some believe Tesla Cybertruck’s glass broke because of guerilla marketing.
Viral marketing can be extremely helpful for brand awareness and improving sales. An example would be an exponential improvement in e.l.f’s brand recognition and sales volume due to a viral marketing tactic.
Maslow’s hierarchy of needs can be linked to customers to identify their needs. This would improve the firms standing among competitors as customers would perceive the firm puts the customers at the centre. Moreover, having a digital brand community fulfils the need of belonging in Maslow’s hierarchy, thus improving sales.
AIDA can also be used to boost sales. A catchy pamphlet on a sales retail store or a TV ad would induce attention from the customers. They would then inquire about the product due to their interest in the product. A quality-oriented product that fulfils the need or want would increase the customer’s desire and would lead to a sale or action.
Integrated Marketing Communications (IMC) assesses the need for each promotion source, and plan the best possible promotional mix.
There could be penetration pricing (competitive and lower pricing to improve sales but the perception about quality could be a negative) or price skimming (higher price to perceive a higher quality but the sales could be limited).
Pricing methods to mathematically calculate sales would be markup pricing (fixed markup on the cost), target pricing (calculating cost and then setting a price that would yield a certain return on investment (ROI)). Pricing methods need to be linked to the cost to the customer and their income.
To predict if the increase or decrease in price would be beneficial for the organization, price elasticity of demand can be assessed. A slight price reduction could lead to higher sales if the demand is elastic. If the demand is inelastic, increasing price would lead to higher profits but a lesser reduction in demand.
Choosing an appropriate distribution method increases the chances of improved sales as it would be closer to where the customer resides:
1. From manufacturer to the end customer for products like aeroplane tickets
2. From manufacturer to retailer to end customer for products like huge supermarkets e.g., Walmart
3. From manufacturer to wholesaler to retailer to customer for a company with dispersed customers e.g., Coke and Pepsi.
Furthermore, franchising is another option for placement. It includes joint ventures with other companies, providing licenses to someone to sell the company’s product, or investing in a subsidiary and becoming a parent/holding company. This would allow the firm to assess the local market closely and improve brand awareness, leading to higher sales.
Economies of scale (EOS) indirectly boost sales
Firms try to achieve Economies Of Scales (EOS) to gain a sustainable competitive edge and reduce the costs:
Bulk-buying EOS reduce the per-unit cost of raw material. Quality-oriented raw material at a competitive bulk-buying rate would in turn improve the product’s quality. This would mean the organization can sell a quality-oriented product at a competitive price.
Technical EOS aims to reduce unit and average cost by introducing capital-intensive/ machine instead of labour-intensive/ workers. New machines can manufacture efficiently with minimized wastage, thus saving the cost on raw material and spending it on sales activities.
Marketing EOS can provide a better and more vast-reaching marketing strategy and tactics that are more efficient and are more likely to improve sales over cash spent on it.
Putting customers at the centre to maximize sales
Customers are the ones to purchase the product, so if they are satisfied, the chances of improved sales become higher. Corporate Social Responsibility (CSR) improves PR because the organizations try to perceive a positive image in the minds of customers so that they choose their brand over competitor’s. This could give the firm a chance to set profit/ sales maximization as a corporate aim. Statista’s research suggests people in France are more likely to purchase from a company with a good CSR policy
Customers are more likely to purchase from a known branded product with a good PR, be it a small, medium, or large organization. A firm involved in tax evasion would less likely fall in that category. So, paying taxes indirectly increases sales.
Assessing if the above methods have improved your sales
Try these calculations to see if the above steps increased sales:
Sales turnover ratio can be calculated by dividing the cost of goods sold over average inventory. An improved sales turnover compared to the previous year would mean the sales have improved.
Market share is a specific organization’s sales in a market over a period of time. Again, an improved market share from the last year would imply the above methods were successful in improving the sales.
Conclusively, most of the techniques mentioned above would affect several departments and these steps would be gradually implemented in the organization. Change management and force-field analysis can make the analysis smooth and systematic. Force-field analysis includes the force for change (driving force) and forces against (restraining forces) and each one is given a value. The aggregate of both individually would then aid in deciding the most suitable steps.
Methods that lead to long-term customer retention of existing and new and sales improvement should be the ones to implement. Finding new customers and keeping the current ones satisfied is the key to increased sales volume. A few of the above mentioned can increase sales without much discounts.
Originally published at https://www.linkedin.com.