Management Tip: Driving Top Line Growth

Driving More Money in the Door

There are only three ways to impact top-line revenue, or get more money in the door. Let's look at them and at who is primarily responsible for each piece.

1. Increase the number of customers (Sales)

Increasing the number of customers is the primary responsibility of the sales team. Remember that the goal of the sales team is to help potential customers identify a solution to their problem. From a business perspective this can be translated into helping the customer reach a decision to buy from us. By getting customers to reach this decision they are driving one of the three ways to increase top-line income: Increasing the number of customers.

In real life, very few sales people are only responsible for increasing the number of customers. They generally take on responsibility for driving all aspects of top-line growth. The extent to which they do this depends on the organization, and their current business objectives. There are also practical things to consider such as the fact that the sales person is generally the only person who travels extensively to remote locations to visit customers. It is not practical to send the orders team, the customer service team, and the sales team all on the road, so the sales team normally becomes the interface to the customer for other groups within the company. In its purest form though, it is important to remember that the sales team should be focused largely on acquiring new customers.

2. Increase the average value of each sale (Orders)

Increasing the average value of each sale is the domain of the orders team, in conjunction with the sales team as we just discussed. The orders team is responsible for helping the customer understand the details and agree to payment amounts and terms. In terms of the business, the orders team's job is to get the contract signed.

If the sales team has done its job, the orders team doesn't have the sell the customer on the solution. What they need to do is make sure both the customer and the business are getting the maximum value from the solution. This involves making sure the customer gets all the applicable accessories and options they would like, and making sure the customer knows about related products or services they may also want.

You see examples of this every day. It is only after you have decided to buy that new camera, or new car, or new house that you get asked if you would like an extended warranty, or any additional options. Depending on the business you are dealing with, this may be the same person who sold you on the purchase in the first place, or they may hand you over to another person to close the details of the sale. Either way you are being transitioned from the sales portion to the orders portion of the business cycle. Sometimes a single person may play the role of sales and orders person, but the process is the same. The orders team is the primary driver of the top-line growth strategy of increasing the average value of each sale.

3. Increase the frequency of sales (Customer Service)

The last of the three top-line growth strategies is increasing the frequency of sales. This equates to getting the customer to buy more often. Remember the customer cycle: Shop, Order, Get, Use. Let's rotate the cycle a little and say it again: Get, Use, Shop, Order. What do you go back to the store to buy more of? Things you use a lot, or things you use up.

Remember what the role of Customer Service is? To help the customer use the product. Why? So they will continue the cycle and shop and order again. This is one of the least understood roles in most businesses. There is general acknowledgement that you need customer service, or people will get upset and leave. What is poorly understood is that customer service is there to help the customer USE the product, and ideally to use the product up so they need more.

Let's think about that a little. One of my favorite examples is the Running Room. The Running Room sells shoes, clothing and accessories for joggers and runners. They also sponsor a running club. It's free to join. They run together several times a week. They meet at the store (I wonder why that is…). They give you a lot of good advice on health and fitness. And they get you to run. What happens when you run? You use your shoes. Eventually you use them up. And when you do, where are you? At their store because you meet there every week anyway! This is a brilliant example of customer service designed to increase the frequency of sales. I used to run with them. I appreciate the service. I'm planning to go buy another pair of shoes there shortly because mine are worn out, and because they really do help me get a good pair of shoes that matches what I want to do with them.

But you don't necessarily have to use up a product to want more. You buy more of what you like. If you like watching movies, you probably buy a new TV or DVD player, or projector, or speakers, whatever, not because your old one doesn't work any more, but because you like using it so much you are always on the lookout for even better stuff. Customer Service helps people have a good experience using products and services. The more effective or pleasant it is to use, the sooner your go back looking for more.

Summary

There are three ways to increase the amount of income coming in to your business: Increase the number of customers, increase the average value of each sale, and increase the frequency of sales. The Sales, Orders, and Customer Service teams should be primarily focused on each one of these respectively. It is also important to remember that each of these strategies is a team effort. The Sales team, Orders team, and Customer Service team must all work together with and for the customer to make this work.

Remember, businesses succeed by helping their customers succeed.