July 13, 2016
Sales Growth Strategies for New Franchisees
Many people who purchase a franchise that is already up and running (as opposed to a brand-new site) are looking to increase sales, but there is more to this than simply choosing a sales number.
There is more than one way to increase sales in a business, and the choice will affect marketing, staffing and business operations. Because of this, it is important to know which approach a franchisor recommends, how they will support it through marketing and what it means for how you run the business. To have that conversation, you will need to be aware of some basics of sales growth strategy.
Let us take a look. Increasing sales might sound simple enough, but there is a lot to it. It is more than finding new customers. That is because sales revenue involves the price you charge and the number of transactions you make. Therefore, to increase sales, there are three main approaches a business can take.
- Increase price, decrease number of transactions. This is a “premium pricing” strategy. It means offering more to your customers, which allows you to charge more. It is more than simply putting your prices up; your customer must perceive additional value.
- Decrease price, increase number of transactions. This is a “discount” strategy. It means reducing your prices with the aim of increasing the number of transactions. You need to make sure the increase in volume counteracts the impact of the price reduction.
- Increase price, increase number of transactions. This means putting your prices up and also selling more. It needs to be carefully planned and thought through, as there is a lot involved. Each of these has different consequences for marketing. For instance, with a premium approach, you will want to attract customers who can spend more. This should be reflected in promotions, store fit-out and point of sale.
The decisions do not stop with marketing. With a premium pricing approach, your customers will expect a high level of service. What does it mean for the staff you recruit, how you train them and how you measure their performance? A successful discounting strategy means more customers.
To cope with increased volume, staff may need to become much more productive, so the question becomes how will you make this happen. Once you have understood the approach to growing your business, write down the key things you will do to achieve your sales growth targets. These then become part of your business plan.
