• HOME
  • LAUNCH
  • BUSINESS
  • LEADERSHIP
  • MONEY
  • SUCCESS
  • NEWS
Thursday, 25 February 2021
ExpertHub
  • HOME
  • LAUNCH
  • BUSINESS
  • LEADERSHIP
  • MONEY
  • SUCCESS
  • NEWS
    • All
    • Company Posts
    • ExpertHub Today
    ThinkSales State Of B2b Sales In South Africa 2021 Survey

    The 7 Strategies of SA’s Strongest B2B Sales Performers for 2021

    ThinkSales State Of B2b Sales In South Africa 2021 Survey

    3 Sales Strategies SMEs Can Borrow from SA’s Strongest Performers

    ThinkSales State Of B2b Sales In South Africa 2021 Survey

    SA’s Strongest Salesforces Focus on Value, Not Discounting

    ThinkSales State Of B2b Sales In South Africa 2021 Survey

    ThinkSales State Of B2b Sales In South Africa 2021 Survey

    Devastating Financial Gender Gap Has Grown: Women Are Better Investors, But Retire With 30-40% Less Than Men

    Why SMME’s Need To Think Small

    Devastating Financial Gender Gap Has Grown: Women Are Better Investors, But Retire With 30-40% Less Than Men

    Five Money Management Principles To Start 2021 On The Right Financial Footing

    Trending Tags

    No Result
    View All Result
    • HOME
    • LAUNCH
    • BUSINESS
    • LEADERSHIP
    • MONEY
    • SUCCESS
    • NEWS
      • All
      • Company Posts
      • ExpertHub Today
      ThinkSales State Of B2b Sales In South Africa 2021 Survey

      The 7 Strategies of SA’s Strongest B2B Sales Performers for 2021

      ThinkSales State Of B2b Sales In South Africa 2021 Survey

      3 Sales Strategies SMEs Can Borrow from SA’s Strongest Performers

      ThinkSales State Of B2b Sales In South Africa 2021 Survey

      SA’s Strongest Salesforces Focus on Value, Not Discounting

      ThinkSales State Of B2b Sales In South Africa 2021 Survey

      ThinkSales State Of B2b Sales In South Africa 2021 Survey

      Devastating Financial Gender Gap Has Grown: Women Are Better Investors, But Retire With 30-40% Less Than Men

      Why SMME’s Need To Think Small

      Devastating Financial Gender Gap Has Grown: Women Are Better Investors, But Retire With 30-40% Less Than Men

      Five Money Management Principles To Start 2021 On The Right Financial Footing

      Trending Tags

      No Result
      View All Result
      ExpertHub
      No Result
      View All Result
      Home BUSINESS Financial Management Cash Flow

      The Numbers to Know to Grow Cash Flow

      Brad Sugars by Brad Sugars
      Nov 7, 2013
      in Cash Flow
      0
      Brad
      Share on FacebookShare on TwitterShare on LinkedIn

      RelatedTopics

      Automated Retail Cash Management Saves Time And Money

      Financial Literacy Key To Business Success – Especially In A Tough Economy

      Trade Agreement Tips That Will Save You Costs


      One of my main business mantras is ‘Know Your Numbers’, and because numbers are the language of business, it’s numbers that will ultimately determine your success.

      Business is literally a numbers game, but what numbers should you know?

      Here are seven metrics that will give you predictive results you can measure and manage for more sales and bigger profits.

      1. The lifetime value of each customer.

      While there are more complicated formulas to determine this value, this simple version will give you a start:

      If your average customer spends R200 per purchase, buys three times a year and stays with your business for five years, the customer’s lifetime value to your business is R3 000.

      (R200 x 3 sales = R600; R600 x 5 years = R3 000).

      Now you have a working understanding of the worth of each customer and the types of resources you need to acquire and retain them.

      2. How much it costs to acquire a new customer.

      I call this your Cost Per Acquisition, or CPA, and it can help determine how much you spend on any marketing or ad campaign.

      Let’s say you’ve placed an ad in your local paper for R2 000. You get 20 responses and ten sales.

      The acquisition cost for each customer is R200 (R2 000/10 = R200).

      If your offer results in at least R200 in profits on every sale, you’ve run a successful campaign. But if your CPA is R200 and you have little or no profit, or are acquiring customers at a loss, it’s time to re-evaluate your marketing.

      3. Conversion rates.

      Let’s say you hand out flyers to people on the street. The campaign generates 1 000 leads over a two-week period, and 100 of those leads buy. Your conversion rate is 10% (1 000 leads/100 new customers = 10% conversion rate).

      Too low? Nowhere to go but up. Tweak flaws in your sales process, increase customer service, narrow your target or create a better offer.

      Knowing where you are is half the battle in getting to where you need to be.

      4.  Your average rand sale.

      The value of each sale is important if you’re looking to generate repeat business or up-sell – in other words, the ‘Would you like fries with that?’ strategy.

      Simple ‘add-ons’ can add-up quickly. For example, a deli offering premium sides and bottled drinks increased its average sale from R50 to R130 with a simple ‘up-sell’ script that increased overall revenue 144% within a few weeks.

      5. Response rates.

      Conventional direct mail response rates will vary from 1% – generated by using lists from a list broker – to up to 5% – generated by using a ‘warm’ list of current or past customers.

      Online email response rates are generally about 0,1%. That means, to get 50 responses to a conventional direct mailing, you’ll need to mail to a minimum of 5 000 names with a great offer.

      To get 50 responses from an email campaign, you’ll need at least 50 000 names, knowing not every response will end in a sale.

      6. Lead-to-sale-ratio.

      If you’re in a business-to-business, professional services category or have a long-term sales cycle, your lead-to-sale ratio will give you an idea of the audience you’ll need to target to actually close a sale.

      Say your insurance business needs ten prospects to generate five meetings to produce one client. To get 1 000 clients, you’ll need to prospect 10 000 people.

      If your conversion rate is 20%, you can add value, guarantees or other ways of reducing real or perceived risks to increase your conversion rates to a 5:2 or 5:3 ratio.

      7. Touches to sale.

      How many contacts or touches does your prospect need before they buy? The general rule of thumb in sales is that:

      • 2 % of sales are made on the first contact/touch
      • 3% of sales are made on the second contact
      • 5% of sales are made on the third contact
      • 10% of sales are made on the fourth contact
      • 80% of sales are made on the fifth contact.

      It’s generally accepted that on average, you need at least four to seven touches for a sale. So when should you stop touching? When you’re asked – otherwise, you never know when the timing is finally right for a sale.

      Knowing your numbers and what numbers to know in the first place greatly empowers your decision-making, and helps you better predict how your business will fare.

      If you do your numbers and discover you need a 10 000 person database to get 1 000 customers, your marketing plan is pretty simple: Get a list and an offer, then track and convert your results.

      [box style=”grey map rounded shadow”]

      Hitting the Numbers? Your Business Could Still Be Failing. Here’s Why

      [/box]

      ShareTweetShare
      Brad Sugars

      Brad Sugars

      Brad Sugars is a startup expert and the writer of 14 business books including “The Business Coach”, “Instant Cashflow”, “Successful Franchising” and “Billionaire in Training”. He is the founder of ActionCOACH, a business coaching franchise.

      Quick Links

      • Business Plan Advice
      • Business Plan Format Guide
      • Business Plan Format
      • Sample Business Plans

      NEWSLETTER SIGN-UP

      Sign-up for Weekly ExpertHub Updates

      * indicates required





      EXPERT INSIGHTS

      https://vimeo.com/311685299?loop=0

      Browse by Category

      • Academic & Alumni Networks
      • Accounting & Payroll
      • Accounting & Payroll
      • Advertising
      • Advice
      • Angel Investors
      • Are You Suited to Entrepreneurship
      • Are You Suited to Franchising
      • Arts & Crafts
      • Attracting Investors
      • Auto & Transportation
      • Automotive, Travel & Transportation
      • Bank Finance
      • Banks
      • BEE
      • Bootstrap Financing
      • Branding
      • Budgeting
      • BUSINESS
      • Business Advice for Women Entrepreneurs
      • Business Ideas
      • Business Ideas Directory
      • Business Landscape
      • Business Leadership
      • Business Leadership Q&As
      • Business Model
      • Business Plan Advice
      • Business Plan Format
      • Business Plan Research & Preparation
      • Business Plan Template
      • Business Plans Q&As
      • Business Services
      • Business Survival
      • Case Studies
      • Cash Flow
      • Celebrity Businesses
      • Change Management
      • Checklists
      • Children
      • Children & Education
      • Company Posts
      • Compete to Win
      • Compliance
      • Computers & Internet
      • Construction & Engineering
      • Consulting
      • Cool Offices
      • Direct & Email Marketing
      • Doing Business in Africa
      • Doing Business in SA
      • Doing Business in SA Q&As
      • Doing Good
      • Eastern Cape
      • Education & Instruction
      • Entertainment & Events
      • Entrepreneur Competitions/Awards
      • Entrepreneur Daily
      • Entrepreneur Profiles
      • Expansion Finance
      • ExpertHub Today
      • Financial Management
      • Financial Management Q&As
      • Financial Reporting
      • Food and Farming
      • Franchise & Biz Ops Spotlight
      • Franchise Finance
      • Franchise Listings
      • Franchise News
      • Franchise Your Business
      • Franchisee Advice
      • Franchising
      • Franchisors
      • Free Mentorship Services
      • Free State
      • Funding
      • Funding Q&As
      • Funky Marketing
      • Gauteng
      • General Business Networks
      • Get Organised
      • Government Funding
      • Government Funding
      • Government Grants
      • Growing a Business
      • Growing a Business Q&As
      • Health and Beauty
      • Hip Retail Spaces
      • Hiring & Managing Staff Q&As
      • Hiring Employees
      • Home Products & Services
      • Hotels & Hospitality
      • How to Guides
      • How to Guides
      • How to Guides
      • How to Guides
      • How to Guides
      • How to Guides
      • How to Guides
      • How to Guides
      • How to Guides
      • How to Guides
      • How to Guides
      • Import Export
      • Import Export Q&As
      • Import/Export
      • Increase Profitability
      • Increasing Productivity
      • Innovation
      • Intellectual Property
      • International
      • Investing
      • KwaZulu Natal
      • Labour Complexity
      • Labour Law
      • LAUNCH
      • LEADERSHIP
      • Leading
      • Legal Assistance
      • Legal Contracts
      • Lessons Learnt
      • Limpopo
      • Long Term Courses
      • Managing Staff
      • Manufacturing
      • Manufacturing
      • Marketing
      • Marketing Q&As
      • Marketing Tactics
      • Medical & Health Care
      • MONEY
      • Mpumalanga
      • National
      • Networking
      • Non-Profit Organisations
      • Northern Cape
      • Ongoing Learning
      • Ongoing Learning
      • Online Business Plans
      • Online Businesses
      • Online Marketing
      • Online Mentorship Services
      • Online Networks
      • Partnerships
      • Performance & Growth
      • Performance Monitoring
      • Personal Finance
      • Personal Improvement
      • Personal Improvement
      • Personal Improvement Q&As
      • Personal Services
      • Personal Wealth Q&As
      • Pets & Animal Services
      • Podcasts
      • PR & Publicity
      • Presenting
      • Private Equity
      • Professional Mentorship Services
      • Professional Services
      • Property Investment
      • Publishing and Media
      • Ready to Launch
      • Real Estate
      • Real Estate
      • Recreation
      • Referrals
      • Researching a Franchise
      • Restaurants & Bars
      • Retail
      • Retail Business
      • Risk Management
      • Sales
      • Sales Confidence
      • Sales Prospecting
      • Sales Q&As
      • Sales Strategy & Management
      • Sample Business Plans
      • Sample Business Plans
      • Santam for Business
      • Sector Focus
      • Self Development
      • Services Businesses
      • Setting & Achieving Goals
      • Setting Up Systems
      • Short Term Courses
      • Small Business
      • SME Incubators
      • Snapshots
      • Special Interest Business Networks
      • Sports, Outdoors & Fitness
      • Staff
      • Start Up Tools & Infrastructure
      • Start-up Advice
      • Start-up Guide
      • Start-up Industry Specific Q&As
      • Starting a Business
      • Starting a Business Q&As
      • Starting an Export Business
      • Starting an Import Business
      • Strategy
      • SUCCESS
      • Success Stories
      • Support for Women Entrepreneurs
      • Tax
      • Techniques
      • Technology
      • Technology
      • Tools
      • Types of Businesses to Start
      • Uncategorized
      • Upstarts
      • Venture Capital
      • Western Cape
      • Women Entrepreneur Competitions
      • Women Entrepreneur Successes
      • Women Entrepreneurs
      • Women's Business Networks
      • Women's Funds
      • Work Life Balance
      • Worksheets
      • About Us
      • Write for Us
      • Privacy Policy
      • Terms & Conditions
      • Sitemap
      • Contact Us

      Copyright © 2021 ExpertHub.info

      No Result
      View All Result
      • HOME
      • LAUNCH
      • BUSINESS
      • LEADERSHIP
      • MONEY
      • SUCCESS
      • NEWS

      Copyright © 2021 ExpertHub.info

      Login to your account below

      Forgotten Password?

      Fill the forms bellow to register

      All fields are required. Log In

      Retrieve your password

      Please enter your username or email address to reset your password.

      Log In