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Target Identification: Closed Customer and Sales Database
- Importance of Setting Goals in Sales: Goals provide direction, improve performance, measure success, motivate the sales team, and improve forecasting.
- Customer Database: A customer database is an organized collection of information about potential and current customers, including contact details, purchase history, preferences, and previous interactions.
- Types of Customer Data:
- Demographic data: Age, gender, geographic location, income, education, occupation.
- Psychographic data: Values, interests, lifestyle, personality.
- Purchase data: Products or services purchased, purchase date, amount paid, payment method.
- Interaction data: Phone calls, emails, online chats, website visits, social media interactions.
- Data Quality: Data in the database must be accurate, complete, and up-to-date.
- Customer Segmentation: Dividing the customer database into smaller groups based on shared characteristics to allow for targeted marketing messages.
- Customer Types:
- Met: Customers who have been personally met or interacted with directly.
- Haven’t Met: New customers who have not been interacted with directly yet.
- Strategies:
- Met Customers:
- 8x8: An intensive❓ eight-week communication program with eight different contacts with each customer to strengthen the relationship and increase brand awareness.
- 33 Touch: An ongoing communication program with 33 contacts throughout the year to maintain the relationship and remind the customer of your presence. Expected ratio: 12 customers should result in 1 referral and 1 repeat sale (12:2).
- Haven’t Met Customers:
- 12 Direct: A direct marketing program with 12 direct contacts with potential customers throughout the year, including emails, text messages, and social media posts. Expected ratio: 50 customers should result in 1 new sale (50:1).
- Met Customers:
- Calculating Required Contacts:
- Met Customers:
Required Contacts = (Closed Sales Goal) x 6 - Haven’t Met Customers:
Required Contacts = (Closed Sales Goal) x 50 - Mixed Approach:
- Determine the percentage of sales desired from each customer type.
% Sales from Met Customers + % Sales from Haven't Met Customers = 100% - Calculate the number of sales for each customer type.
Sales from Met Customers = (Closed Sales Goal) x (% Sales from Met Customers)
Sales from Haven't Met Customers = (Closed Sales Goal) - (Sales from Met Customers) - Calculate the required contacts for each customer type.
Required Contacts from Met Customers = (Sales from Met Customers) x 6
Required Contacts from Haven't Met Customers = (Sales from Haven't Met Customers) x 50
- Determine the percentage of sales desired from each customer type.
- Met Customers:
- Gap Analysis:
- Determine the current number of contacts.
- Calculate the gap:
Gap = Required Contacts - Current Contacts - Develop a plan to bridge the gap by adding new contacts to the database.
- Setting Monthly Goals: Divide annual goals into measurable monthly targets. Can be divided across 10 months, assuming 2 months for holidays. Monthly contact goal:
Required Contacts / 10. - Key Formulas:
- Conversion Rate = (Number of Closed Sales / Number of Prospects) x 100%
- Customer Lifetime Value (CLTV) = (Average Purchase Value x Annual Purchase Frequency x Average Customer Lifespan) - Customer Acquisition Cost (CAC)
- Customer Acquisition Cost (CAC) = (Total Marketing and Sales Costs) / Number of New Customers Acquired
- Return on Investment (ROI) = ((Total Revenue - Total Costs) / Total Costs) x 100%
- Case Studies:
- Company XYZ: Applying the 33 Touch strategy increased repeat sales by 20% and referrals by 15%.
- Company ABC: Experimenting with the 12 Direct strategy increased the number of new customers by 10%.
- Company DEF: Analyzing customer data to identify the most profitable segments allowed for focused marketing efforts and increased ROI.
Chapter Summary
The chapter focuses on setting realistic and measurable goals for building a strong customer database❓ and increasing closed sales. It divides potential customers into two categories: “Met Database” (customers known previously) and “Haven’t Met Database” (customers not known previously), with different conversion rates for each.
The chapter emphasizes different conversion rates for each customer category. For “Met Database,” the “33 Touch” program aims to build strong relationships, leading to repeat business and referrals at a rate of 1 repeat sale/referral per 12 people (12:2 ratio). For “Haven’t Met Database,” the “12 Direct” program focuses on generating new business through direct contact, resulting in one new sale per 50 people (50:1 ratio).
Three options are presented for determining the required database size to achieve sales goals: relying solely on the “Met Database,” relying solely on the “Haven’t Met Database,” or using a combination of both. The recommended option is the combination, where the desired percentage of sales from each database is determined, and the required database size is calculated based on the conversion rates.
Clear formulas are provided to calculate the \6\\❓\\" role="button" aria-label="Open Question" class="keyword-wrapper question-trigger">required number❓ of contacts in each database based on sales targets and conversion rates. For “Met Database,” the target number of closed sales * 6 (12:2 ratio) = the required number of contacts. For “Haven’t Met Database,” the target number of closed sales * 50 (50:1 ratio) = the required number of contacts.
A gap analysis table is presented to identify the difference between the target figures (required database size) and current figures (actual database size) to determine the number of new leads needed. Users are encouraged to divide the required number of new contacts on a monthly basis, accounting for holidays. Adding more names at the beginning of the year is emphasized to ensure potential customers receive the required number of touches for conversion.
