The interesting thing is that all SUCCESSFUL BUSINESSES are using the five boxes even though many of them are not even aware of it!
BOX 1 - Lead generationThis enables you to measure where your leads (potential customers) are coming from and how many are coming, e.g. from newspaper ads, website, word of mouth, radio etc. It lets you see what is effective in drawing people to your business. Remember that the more you do this, the better picture of your business you will have.
BOX 2 - Conversion rateThis enables you to see how many of the leads coming into your business are being converted to customers. We would all like 100% but that is not realistic, so you need to measure what your conversion rate really is. To do this you need to see how many customers you end up getting and then compare this to the number of leads you have. e.g. in an average week you may have sold to 30 customers out of a total of 100 leads who walked into your shop. Your conversion rate is therefore 30%.
BOX 3 - Number of TransactionsThis lets you see how many times customers will buy from you. Do they pay a monthly fee or maybe are due for a mechanical check twice a year? Originally you will have a gut feeling for this but over time more concrete data will help. With this information your Holloway Marketing Consultant can look at practical ways to increase the number of times your customers deal with you, e.g. telemarketing to your database of customers and letting them know of a promotion or seminar that you are running.
BOX 4 - Average Dollar SaleFinding out what the average sale is worth to your business is really interesting and could be surprising – either it will make you happy or show you that you need to lift your game! Once your average dollar sale has been identified you can look at ways to increase the amount people spend with you each time they come back. This is surprisingly easy to do and can easily add 25% to your turnover over time. By multiplying the number of customers by the number of transactions and then the average dollar sale, you find out your turnover from those customers.
BOX 5 - Profit MarginsThis is a critical part of the equation. You have to know your margins to see what kind of profit you are going to end up with. After you have found your turnover multiply this by the profit margin to get your profit. Again, your consultant can work with you to show you how the margin you are getting can be improved.