- Do you want to improve business cash flow till the time your newly appointed sales team picks up the sales momentum like your previous sales team?
- Would you want to improve sales revenue even when your sales turnover or sales volume is low?
- Do you want to increase your cash flow to cope up with demands of working capital in your business especially when sales volume is low during off-season time or during few months of crisis for any unforeseen reasons?
After implementing dozens of strategies to transform business revenue in few small companies I have coached, based on the result and feedback of entrepreneurs, here are my top 12 favorites.
1. Product Innovation :
It’s proven thing that in order to have a successful business, you should be successful in two key domains – Innovation & Marketing. Talking about innovation, product innovation can add tremendous value in your offerings to your prospects thereby resulting in improved cash flow. As an example, you may add certain features to your product or service or you may add certain after sales benefits which shall help your existing sales team to command higher price.
2. Price Revision :
Once extra value added features in the existing product is done, sales team can command a premium price. 20% premium price at 50% acceptance/conversion level can also bring 10% extra cash flow. Pricing is more of a mental game so cost vs value should be well researched before hitting it with prospects. However one important thing about pricing is that no matter how small the price is, there will be few who cannot afford it and likewise, no matter how premium the price is, there will always be few who can afford it.
3. Target Base Change :
Sometimes it has been observed that when premium product is innovated and premium price is commanded, the existing target base may genuinely not be able to afford it so in such a case, it’s always better to change the target base by targeting new location, new profile and new demographics or may be combination of these. Change in target base can open flood gate of new sales opportunities.
4. Marketing funnel review :
I love this idea of having periodic review of marketing funnel. Depending upon whether marketing is based on online activities or off-line activities, you can monitor the prime factors like the cost per lead, cost per counselling, cost per sale. Along with this the conversion ratio from lead to counselling, conversion ratio from counselling to sale along with performance of various lead sources, cost wise and sale wise. After micro level analysis, you shall find out which parameter is not performing. And the parameter which is more expensive based on which calculated permutation can be applied for new and refined marketing funnel also found.
5. Higher sales conversion ratio :
According to law of average, after every 8 to 10 No, we can have one Yes. However studies have proved that the more skilled we become after some experience, sales conversion ratio keeps improving. You should target minimum 30% conversion ratio or even higher and this is possible when frequency of sales training or sales review is increased with specific agenda of improving the conversion ratio.
6. Institutional/Bulk Sales :
This can be game changer and it require different marketing approach. Idea is to make appointments with top decision maker of the company . The packaging of product should be such that the decision maker can be motivated to go for the bulk deal for benefits of his/her employee. It requires good communication and presentation skill so that decision makers can be influenced. Even with digital platforms, appropriate filters need to be applied for filtering your target base of top decision makers. Sometimes, one extra layer of HR or Admin team exists and once they are convinced, they forward the proposal to top decision maker. The idea is to sell dozens or hundreds of units to one company only so that cash flow can be improved through such high value transaction due to volume of transactions and not necessarily the price of transaction.
6. Channel Partner incentive :
It’s again a good strategy for multiplying sales revenue without adding extra sales manpower into company rolls. If a team of freelancer marketing people is built through personal or electronic conversation on the backdrop of mutual exchange of their time and skill versus the incentive payout to them for giving referrals or directly participating in sales. There are many companies who has been benefited through developing channel partners network apart from their direct sales team. Your direct sales team have limited working hours in a day and even your infra also must have a limit, but these channel partners work from their own locations without any payment obligation to them on admin or infra ground and they get payment only when they perform.
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7. External collaborations for cross Affiliate Selling :
Your product or services are being sold to a target base and over a period of time. You have developed a good database of certain target base. These target base may be used for the promotion of some other ancillary product or services which you don’t have but is promoted through tie-up with other companies who can provide those ancillary products or services. This is a win-win scenario where you promote their products or services at your target base in exchange of certain incentive or on revenue sharing basis thereby which your business cash flow improves without introducing any new product line.
8. Giving Incentives early payment of existing clients :
It also works very well. Your existing client base will be more loyal to you than your new client base as they have already tasted your service. So they can be offered some discount of incentive to pay their entire balance / outstanding in one go. This works because there is no more trust issue and hence they don’t do much calculation if their affordability is not an issue. This exercise even with 50% conversion ratio can make a very high impact on additional cash flow.
9. Introducing financing options for new clients :
This really works as I had introduced few private financiers, licensed and authorized, to couple of companies who had special arrangement with them. Companies bear the interest of clients on the loan amount and hence it’s easy to convince those clients to go for EMI only through financing option. This is a win-win situation again as clients got staggered payment option through monthly installment (EMI) but at the same time you get entire money upfront as loan disbursement from financial institution.
10. Internal & External referral scheme :
Every sales which is closed by your team cannot be referred to as just “a sale”, rather they should be treated with respect and care. Every existing client can be your brand ambassador and when they are pampered in a strategic manner, they would love to give referrals to you with some benefit in return. But this channel is extremely desirable since referral deals have very high conversion ratio due to word of mouth promotions. Same referral incentive scheme can be floated to your own internal employees and there can be good fun competition too and they would love to contribute due to the bond that exists between them and their managers.
11. Free or organic traffics :
Digital Marketing know how expertise can open doors of many sources of generating leads free of cost either through Google organic means or through engagement with social media groups across platforms like Facebook, LinkedIn etc. But these extra leads can be part of your marketing mix for optimizing your sales conversion ratio.
You may not be having lots of resources but any successful entrepreneur must be resourceful. And no resource is enough until you know how to use them, especially human capital.
So using your best management practices, some or all of above which is appropriate for your business scenario can be applied and result is guaranteed based on my own success ratio with above strategies which I applied in the companies I have coached.
These are time tested and proven business transformation tools for improving cash flow and the real success will depend upon how you actually implement these strategies.