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What If You Improved Your Business By 10%

In this article we look at how making improvements as part of the business development process can significantly improve the profitability of a business.

The starting point to business growth is the number of “quality / relevant sales leads ” that you can obtain. The next stage is how good you are at converting leads into paying customers. Now for some trans actional businesses this may occur within minutes of contact, for other more consultative sales a lead may take years to convert.

Number of leads x Conversion Rate % = Number of Customers

So What If You Improved Your Business By 10%

Number of leads x Conversion Rate % = Number of Customers

Number of Customers x Number of Transactions = Total Sales

Total Sales x Average Sales Value = Revenue

Revenue x Margin = Profits

What If You Improved Your Business By 10%

So lets look at an example company with the pre-improvement numbers

  • Number of leads ( 100) x Conversion Rate (25%) = Number of Customers (25)
  • Number of Customers (25) x Number of Transactions (2) = Total Sales (50)
  • Total Sales (50) x Average Sales Value (2,000) = Revenue (100,000)
  • Revenue (100,000) x Margin (25%) = Profits £25,000

What if we can make 10% improvements throughout the process

  • Number of leads ( 100 becomes 110) x Conversion Rate (25% becomes 27.5%) = Number of Customers (25 becomes 30)
  • Number of Customers (25 becomes 30) x Number of Transactions (2 becomes 2.2) = Total Sales (50 becomes 66)
  • Total Sales (50 becomes 66) x Average Sales Value (2,000 becomes 2,200) = Revenue (100,000 becomes 145,200)
  • Revenue (145,200) x Margin (25 becomes 27.5%) = Profits £39,930

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Improving Your Business By 10%

  • What can you do to increase the number of quality leads. Could it be that you simply need to be more proactive or do you need to try something new like adwords
  • How can you you improve your conversion rate. Improved proposals, proactive follow up, incentive to encourage purchase
  • What would facilitate additional sales to a customer, can you offer service, maintenance upgrades etc
  • Would it be possible to increase the average sales value by adding high value low cost extras
  • Can you decrease operational costs to allow for a margin improvement

Want To Improve Your Business By 10%

For more information on business development improvements click here. To contact Andrew Goode and experienced and professional business development click here

The word Ideas is a great acronym to help in product development

  • Inspiration
  • Design
  • Evolution
  • Adding Value
  • Success
Using IDEAS To Generate New Products

Inspiration – what can inspire you to create a product / service

  • Are there some customer misconceptions
  • Is there currently a limited market penetration
  • Are there opportunities to own / become the voice of the issue
  • Do they do things differently outside of the UK
  • Are there unrelated experts or specialists who have ideas that could be combined
  • If we listen to customers / users what will they say
  • etc

Design – how can it be improved / enhanced

  • How can it be packaged
  • How do other industries or sectors do things
  • What opportunities to do things differently
  • How should it be positioned kitsch and cute or stylish and sophisticated

Evolution – whats the development

  • Can the way the product is taken to market be changed
  • How will the range develop
  • What is it that customers don’t like that can be modified over time
  • Is there a need for taster sessions or trial packs to encourage take up

Adding value

  • What activities are low cost but high perceived value
  • How can the proposition be made more attractive
  • What can be done to reduce the risk to the customer to try
  • Can educating the customer help illustrate the added value

Success – what does it look like

  • What are the numbers / measures / KPI’s that we should evaluate
  • What are our objectives / targets

Case Study of IDEAS based on ICHIBAN development of Sushi and how they gained 42% UK Market Share

The IDEAS approach as applied by Karen Green Commercial Director of Ichiban, as they looked to grow and develop the sale of Sushi in the UK

Inspiration

  • The Ichiban team and main customers buyers went on a fact finding trip to Japan
  • Spoke to experts within the sector
  • Gained feedback from the American market  (classically ahead of the UK market)
  • Conducted customer research on likes / dislikes and importantly listened to customers

Design

  • The Japanese approach to sushi segmented / gifted
  • Looking at exclusive quality chocolates these were delicate products that didn’t move in the pack
  • Used the packaging design team for well know market leading chocolate company
  • Developed a unique “Pagoda” shaped package

Evolution

  • Took a fusion of flavours e.g. Chicken Tikka sushi (see Asian Style Chicken & Duck)
  • Instead of the black stuff often associated with Sushi developed coloured flavoured wraps
  • Developed taster packs as a mechanism to develop trials / new customers

Added Value

  • Bamboo equivalent packaging with grass – that met UK requirements
  • Created the ultimate fish sushi pack

Success

  • Gained 42% of market share
  • Increased market penetration to 10% ( a massive increase when it is considered that Poultry 75% and Toilet Rolls 98%)
  • Winner of industry awards
  • Whilst you are doing a great job and offering a great service your business is not in issue

Using IDEAS To Generate New Products

For more information on marketing and sales developments click here. To talk to an innovation expert click here

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