Is your current advertising campaign increasing your sales volume?
This is a continuation of a post I did titled Taking The Pulse Of Your Business.
Depending on your business model this discussion will apply differently but just know I’ve done google adwords as well as preparing monthly sales flyers to mail out to our customers. So I have a wide variety of exposure, I’ve had a lot of marketing professional friends that were absolutely sold on shmoozing with their potential customers and for their industries that was appropriate. I am just asking that no matter what the standard is for your particular industry or at least what you are accustomed to please keep an open mind and make a decision to gain new ideas.
I once read an article that explained the problems a lot of advertising companies have caused by running commercials without anyway to track if the results they were getting were helping or hurting their sales. There are some venues that require a ton of money wouldn’t you want to know if you were getting adequate results from that advertising. If you have a website you can use sites like quantcast.com before, during and after to seeing if your current campaign if actually driving more traffic to your website. You could also do this to see if your competitors advertising campaigns are working. It’s actually more accurate if your hosting company provides these numbers.
Obviously if your sales come in through phone calls you can ask how the person heard about you but this is highly inaccurate and not dependable because you are depending on people’s memories. I am seeing television ads that will actually give a different web address for different campaigns they use which I think is brilliant. Obviously if you only have one running or if you know where your sales rep has been and all of sudden you are getting more business from those avenues that is easy to track.
Regardless of how you track individual campaigns wouldn’t you want to make sure that the effort and money you are bringing in as a result. Your accounts receivable can help you with this (and if you operate on POS transactions then your returns and refunds will work the same way). Just because you have a sale on your books doesn’t mean it’s a good sale. If you cannot collect the money on that sale it is a loss! If it takes too long to collect the money that sale is a loan, short term and sometimes long term.
Your accounts receivable should show higher dollar amounts when your advertising campaigns were running and during the appropriate response time. Now here is where you start to dissect them, some of this should be done as a regular analysis of your sales numbers. Are the sales small dollar items, are they large profit items or any combination of those? Make sure that at every point the customer is being exposed to what you want them to buy, maximize your profit! Do the sales only contain the specific items or are you taking advantage of the time you have your customers attention to sell them more items?
How far out are your accounts receivables carrying, 60 days… 90 days or only 45? Different industries and for that matter different types of sales are going to require various lengths of time for you to wait for payment. But if you are carrying 50% of your receivables out to 60 or 90 days past when they should be collecting then there is a problem. It could just be the process you are using to qualify your customers to buy from you, this could be a result of your advertising drawing the wrong crowd. But it could be a problem in your ability to collect money due to contract issues (pricing, etc). Your order fulfillment process may be making mistakes and the list goes on… my point is start troubleshooting.
I’ve witnessed first hand many sales people that are great at selling but horrible at making valid sales. What I mean by that is the sales were based on bad information (price, price, price), the contract wasn’t filled out properly sometimes making them uncollectable, impossible delivery promises were made or the customer wasn’t credit worthy. There are all sorts of other accounting creatives that are done to make it look like there are higher sales than reality.
For POS businesses are you getting returns, giving refunds… are your sales sticky? Your advertisments could be sending the wrong message to your customers. Sometimes wording like “cheap,” “free,” and “easy” draws attention to less committed customers. It’s also easy to fall into the overpromising to get a sale trap but be careful that you aren’t promising more than you can deliver. It’s always better to underpromise and over deliver. It may even be an association problem, is there something advertising with or near or even at the same time as your product that is drawing these less than desirable sales. Check it out and act accordingly.
Your business shouldn’t be dependent on sales people but a sales system. If your business is dependent on a sales system vs. people, strengths are properly utilized and weaknesses are covered. Additionally if you are dependent on a sales person and that person is unable (or unwilling) to perform their duties, what happens to your sales? What about if you have a star sales person and that person leaves… let’s say they go to a competitor?
If you are the sales person and you don’t know how to sell, that is a problem. Start learning now but find somebody that can sell in the mean time OR use a different business model so that you can hire graphic designers and writers to do the selling for you (try elance.com to hire someone). No matter which industry you are in you should always be split testing to see if different ad presentations, different ad locations or venues, even different products, will draw better sales. Know your audience!
