When I’m talking with business owners, one of their biggest concerns is always revenue growth. I’m sure you can relate. As your business grows, so does the complexity of sustaining consistent revenue growth month after month. You want to take care of your employees, meet your goals, and keep your business afloat while increasing the value of your brand.
It’s a lot to juggle! And if your revenue growth is slowing down or remaining stagnant, it’s easy to panic.
The good news is: you don’t need to panic. There are 3 key reasons that your revenue growth can slow down, and they are all related to your customers and whether you’ve designed your sales process with them in mind. Those are incredibly fixable areas with a little hard work and strategy! Let’s talk through the top 3 reasons for stalled revenue growth.
Reason #1: Customer retention
Customer retention is essential for any business. You want those return customers, or those key accounts, that help keep your employees productive and your business afloat. But if you’re frequently churning customers with high turnover, you might be starting to see some cracks in the foundation of your business.
Two things directly impact customer retention: building strong customer relationships and your sales process. According to Feedier, businesses that improved their customer retention rates by “as little as 5% saw increases in their profits ranging from 5% to a whopping 95%.” That’s a significant increase in profits!
So, how do you improve customer retention? Focus on those two pieces: building strong relationships by engaging with customers proactively and developing a sales process that facilitates these activities.
Building a Sales Process that Retains Customers
There are many things to consider when building your sales process. When we look at just customer retention there are five elements that should be a part of your sales process:
- A well defined Target Market and Buyers Journey.
- A consistent process for qualifying prospective customers.
- An effective Discovery Process that identifies customer needs and expectations.
- Metrics in place to measure the customer experience.
- A communication cadence that proactively anticipates customer needs.
When you create a sales process that operates specifically to attract and retain your ideal customer, you’re guaranteed to increase customer retention. Adjusting your existing sales process with the same goal in mind will be a big step towards retaining customers and increasing revenue growth.
Reason #2: Customer Average Spend
What’s your customer’s average spend? Sometimes, customer average spend is called “average ticket”, or “basket size.” Whatever you call it, customer average spend is crucial—especially when it comes to your revenue growth.
Let’s look at an example. If you own a business that sells ingredients to packaged goods manufacturers, you might notice that, on average, your customers are purchasing smaller amounts of your two top sellers, pineapple flavor and mango flavor. Their average ticket is coming out to be on the lower end. How can you increase customer average spend?
- Start by crunching the numbers so you can find out what your customer average spend needs to be in order to achieve your revenue goals. A simple approach would be to take your revenue goal for a given period of time and divide it by the number of projected customer over the same period of time.
- Now, take a good hard look at your sales process and your pricing strategy. What can you change to make customers more likely to increase spending? Free shipping over a certain amount? Promotional pricing on purchasing multiple products?
- Consider how much you’re charging. Whether you’re selling a physical product (like in our example) or client services, if you’re struggling with customer spend and stalled revenue growth, the secret might be related to how much you’re charging. Having a ton of customers that only spend a small amount (because your prices are too low!) might have gotten you this far, but developing loyal, dedicated customers who spend larger amounts will accelerate your revenue growth.
Just like with customer retention, this all comes down to your sales process and strategizing to make sure you’re acquiring and retaining your ideal customers.
Reason #3: Customer acquisition
Leads, leads, leads. It feels like every entrepreneur is focused on leads—lead growth, marketing and sales strategies to attract them. And it’s true: when it comes to revenue growth, it’s all about leads and customer acquisition.
There are so many strategies out there for customer acquisition, it’s hard to know where to start. But when it comes down to it, it’s all about your business and what works for you. What works for someone else might not be the answer for your business, and that’s ok.
There are a few proven strategies to help with customer acquisition. Having a marketing process that attracts the right leads (not just a high number of leads) is step 1; having a sales process that qualifies, nurtures, and converts a high percentage of those leads is step 2.
Attracting the Right Leads
The quality of your leads is just as important as the number of leads. As they say, garbage in, garbage out. There are 5 key elements to attracting the right leads:
- Create a well defined Ideal Customer or Buyer Persona.
- Map out the stages of the Buyer’s Journey.
- Select the best fit marketing strategy for your business (inbound/content, direct sales, paid ads, etc).
- Implement the right CRM for managing and qualifying leads.
- Set KPIs to measure the performance of your lead generation efforts over time.
Build a Sales Process that Converts Leads into Customers
You can have all the leads in the world but if your sales process is broken you won’t convert any into paying customers. The key elements for converting qualified leads are the same once that we covered for increasing your customer retention, a well defined Target Audience, Buyer’s Journey, and Discovery Process. Here are 5 additional steps that will ensure your sales process is converting qualified leads at full steam:
- Work with the right leads instead of a lot of leads by implementing Lead Scoring.
- Implement a lead nurturing process to build trust with leads that aren’t quite ready to talk to your team.
- Create follow-up schedules that are specific to where customers are at in each stage of the sales process.
- Use automation through your CRM to make sure no one drops the ball on following up with customers.
- Document common objections and frequently asked buyer questions, along with responses, for quick reference.
So how do you know where to start with all of these pieces? Let’s talk about next steps.
Next Steps for Revenue Growth
If you’re dealing with slow revenue growth, let me tell you: you’re not alone. Many business owners experience this at some point.
So what can you do to turn things around? It all starts by looking at your sales process. Here at Maramba Consulting, we want to help you develop a strategy and process that works for you, helps accelerate revenue growth, and scales your business. If you’d like to learn more, click here. Follow us here on LinkedIn for more tips on revenue growth!