Some individuals may think it unusual to ask how to drive sales growth from your accounting data. More often than not, it is a question posed to the marketing or sales team. For many small businesses, the accountant is more associated with budgeting, payroll or Xero.
In this article, we share 3 questions accounting can help you address before you embark on your next big sales and marketing drive. Typically, in the attempt to lift sales, the impetus is towards acquiring new customers. Before jumping into this, answer these 3 questions first.
1. Customer acquisition cost vs selling to existing customers
Reaching out to prospects can be costly. Just imagine the buyer journey – awareness, consideration, decision-making and post-purchase. Every step requires a marketing activity, in other words, investment. In addition, they are not as linear as the process suggests. In most cases, expect a series of to-ing and fro-ing.
Now, imagine the buyer journey of an existing customer – a staying in touch policy, a CRM program and call or email to close the next sale. Add the rapport built over time, the sales process can be pretty smooth and potentially less costly. But only your accounting data can verify this.
2. New customers vs existing customers sales cycle
In the world of business, time is money. Hence, the earlier the sale can be closed, the more time you will have to move on to the next sales effort. In closing a sale, there are resources to be deployed. When you can divert these resources to the next sales or other business activities earlier, the better it will be for the business.
Amongst others, timesheets can shed light on the sales cycle. A close examination of the numbers contained in it can reveal the cost of your sales cycle.
3. Cost of conversion
The cost of conversion between new and existing customers inevitably differ. With existing customers, you have invested in goodwill, which may not have an expiry date. With new customers, the sale may be harder. It will involve more things you need to do. The costs involved may not be obvious. But every bit adds up.