Last blog I discussed Gross Profit Margin. It may seem strange to start there instead of with Gross Sales, which seem to go hand in hand, but surprisingly, Weekly Gross Sales are actually an indicator of different strengths and weaknesses in your business than your gross profit margin tells you. I started with Gross Profit Margin to make a point – great sales numbers don’t necessarily equate to profitability. You can seemingly have what looks like a great week, but when you deduct your production costs and cost of goods, what you have left may be pretty dismal. Let’s move on.
Weekly Gross Sales tell a story over time. The reason I feel so strongly that they should be tracked weekly rather than monthly or quarterly is that course corrections can be made fast and trends can be identified quickly this way. When I first consult with a business, I want to know what their past 8-12 weeks of sales were, and from there we ask lots of questions:
- How do these weeks compare to the same weeks the previous year?
- Are sales going up or down?
- Are there seasonal issues that affect sales?
- Has there been a recent change in sales staff?
- Has there been a recent significant life change for any sales staff? (Marriage, divorce, birth of a child, death in the family, etc.)
- Are sales stagnating?
- What is your sales process look like? How are your people trained?
The list can go on and on. It is amazing what can factor into sales going up or down.
One of the biggest, often overlooked issues is the attitude of your sales force. Study after study has identified that ALWAYS within the top 5 reasons people buy is “I liked the sales person.” If your team is not likeable, it is going to affect your gross sales. A positive environment where people enjoy working together will reflect in how they treat your customers.
The second biggest overlooked issue is how your customers are treated AFTER THE SALE! Do you show appreciation for their patronage? Do you ask for referrals? Do you have a valuable loyalty program worth coming back for? You should be getting two things back on every customer – repeat business and new customer referrals. Both of these can be found (or found missing) in your weekly gross sales information. “Aftercare” is what keeps you positively on their minds.