Sales and profitability play important roles in scaling a business. Without these, your business is just smoke - it will change direction with the wind. You'll have little control over how your business functions. In such cases, scaling is almost impossible.

It's simple.

To grow your business, you need more sales. For more sales, you must have the answer the most crucial question: “Why does my customer buy from me?”

Every successful company has answered this question. its time you found it for your business too.

Customers generally buy for one (or all) of three reasons:?

a. The offering addresses their pain point

b. It makes your customer gain intangible value

c. It gets things done, thus giving customers a leg up on competition

When you know 'why' your customer buys from you, you can develop a robust offer. But the offer doesn't stand alone. It must be clubbed with 5 metrics which increase your sales and.

These metrics are:

1. Urgency

How badly does your customer want it?

The urgency of your offering in the customer's eyes is directly proportional to your sales. The more urgently he wants what you offer, the shorter is your sales cycle.

Which aspects of your offering create an urgency in your customer's mind?

2. Pricing

What will they pay you for your offering?

Along with urgency, price plays an important role in determining your sales. The more a customer pays you, the faster you can achieve your sales targets. This, in turn, means you can scale up faster.

For instance, your product might be worth ?5 lakhs, and you aim for an annual turnover of ?100 crore. How many units must you sell? 200.

But if your product costs ?5 thousand, you've got to sell 20,000 units to achieve the same turnover.

Does your offering convince your customer to pay you more than he currently does?

3. Cost of Acquisition

What do you spend to get a customer?

The cost of acquiring customers (CAC) is a key metric to determine your pricing. Every action your organization takes to get a sale has an associated cost. Every investment you make to acquire customers contributes to your CAC.

Even activities like networking, guest speaking, seminars and other events are incurred costs. These costs must be taken into account while calculating the cost of acquiring your customer.

The lower your CAC, the higher your profitability. Hence, it's important for you to implement a system which makes your sales process efficient. This system should also enable your company to lower your CAC in each quarter.

What can you do today to lower your CAC?

4. Cost of Value Delivered

How much do you spend in keeping your promise?

The Cost of Value Delivered (CVD) is what you spend to give your customer what he paid for. Delivering your offering to the customer, and services rendered after sales are part of CVD.

For instance, you manufacture and sell your private label of garments in retail stores. How much does manufacturing the garments cost you? Account for material costs, worker wages, overheads and everything else. Also, how much does the retailer charge you? This generally is a fixed cost since the retailer worries about his overheads. When you add these two costs (manufacturing costs and retailer fees), you come upon your Cost of Value Delivered.

Like CAC, CVD is a significant metric to determine your business' profitability. Here, your garment's maximum retail price minus your CVD is your profit. This is another avenue where you must deploy a system to bring down cost each quarter without compromising on value.

Can you keep your promises to customers for a lesser cost?

5. Market Size

What's the size of your market?

The last, and most important metric to affect sales, is market size. Ideally, the market should be of two types. One, a mature market ready to purchase what you offer. Or two, a nice market with low with an unfulfilled pain, gain or yearning for an edge. The former will get you sales on the basis of volumes, while the latter will get you more profit per sale.

If your systems can tap into organizational efficiency to bring CAC and CLD down then, other factors staying constant, you can grab market share quickly. You can retain your price even when your competition has to increase prices to stay afloat.

How much of your market can you capture? (100% is not a realistic answer.) 

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