The source of More Client Conversion. In Blackboard Fridays Episode 17, Jacob talks about Sales, Marketing, and Customer Journey. Need this implemented into your business? Talk to the international business advisor who can do exactly that – Contact Jacob, Learn More, or Subscribe for Updates.
Let me tell you the story of Dan. Dan, and his wife Anne*, ran a building services company generating about $3 million in revenue each year. It wasn’t more customers they were chasing – they just wanted a holiday.
But both they, and their sales team, were at capacity – it was next to impossible for them to step out of the business for anything more than a lunch break. So I worked with them on a project to source better clients.
In this week’s #BlackboardFridays video, learn about the 3 ways we examined their client base to understand which source of new customers was most efficient, and how we changed their budget just a little to create the same amount of revenue in less time each week.
I’ll also share where Dan and Anne went on their holiday.
*Names changed so I can share their actual financial data
Who is Jacob Aldridge, Business Coach?
“The smart and quirky advisor who gets sh!t done in business.” Back independent since 2019.
Since April 2006, I’ve been an international business advisor providing bespoke solutions for privately-owned businesses with 12-96 employees.
At this stage you have proven your business model, but you’re struggling to turn aspirations into day-to-day reality. You are still responsible for all 28 areas of your business, but you don’t have the time or budget to hire 28 different experts.
You need 1 person you can trust who can show you how everything in your business is connected, and which areas to prioritise first.
The most common questions I receive is how do we get more revenue, more sales, more clients? This week, I wanted to talk you through an analysis project I did with Dan and his business. Dan is a building contractor, doing about three million dollars a year in revenue. His issue wasn’t getting more clients necessarily.
It was finding more time. It was getting better quality clients, so that him and his team didn’t have to work quite so hard. In fact, Dan’s number one brief to me as his business coach was, ‘Help me have a holiday. My wife and I haven’t had a holiday in almost ten years and if you can help me do that, without impacting the three-million-dollar revenue that we’re doing or our profit margins, then you’ve done your job.’
So, this is the analysis we did. The first step was straightforward. Dan and his team had been tracking the source of all their clients over the years, and so we were able to break down where the existing clients were coming from. We’ve broken into five categories—repeat clients, referral clients, clients that came from their website, clients became direct to their showroom, and clients that came from advertising.
Now being a building manufacturer, they didn’t get a lot of repeat clients because the products didn’t tend to last eight to ten years. So, they knew they needed a steady supply of incoming clients. They were a little bit surprised that advertising was bringing in half of all their business, but they weren’t completely shocked at that. They knew that that’s where they were investing their money and that was showing.
The next analysis I did with them however reveal some issues with their strategy. We had a look at the conversion rate. If you had ten clients coming from each of those sources, how many of those would convert and become your customers?
What we found was this—a very different looking graph. Repeat clients converted at about 40%. No surprise there—they’d used the business before, they knew Dan and, in his team, they trusted him. Referral clients converted at about 20%.
Again, they came with a strong recommendation, and they were happy to convert. Those figures dropped off until you get to the advertising, which I found was converting at just 10%. But they had ten clients come in the door—there was a difference between four those clients buying the product and one of those clients buying the product.
So, we could see that to get them more clients, better clients free up some capacity in their sales team and for Dan, we needed to find a way to convert more efficiently.
The third question I asked was, ‘Where’s your budget? Where are you spending the money?’ Not surprisingly, because of where most of their clients were coming from, the giant chunks of their budget were spent on advertising.
None of that budget was spent on repeat or referral clients. They have no loyalty programs in place, they didn’t put any time into follow-up calls, checking in with existing clients to see if they were happy with the product, who else they knew they might be looking to buy?
This conversation here was where we focused the conversation around sourcing more clients. How could we take some of that $5,000, that was converting it just 10%, and put it into activities that were going to bring more prospects through the door that were converting at 20%, 30%, 40% or more?
So even before we got into the sales training to how we could ramp up those conversion rates, we got into the conversation of redeploying their budget to refocus exactly where their clients were coming from to reship this balance so that they didn’t have any fewer clients, but they had better clients, more profitable clients, and clients that they converted much more easily.
Six months later, Dan and his wife spent a month with some friends on a sailboat around Thailand. That’s a pretty good outcome.
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