The 4 drivers of sales for a project based agency

By June 6th, 2017 No Comments

Are you finding that your sales are not growing as fast as you hoped they would or, worse still, are declining?

What can you do to affect the volume and value of sales that are coming in to the agency?

Have you considered the drivers that make up your sales value?

We see that there are 4 key drivers and they are:

  • Number of leads generated
  • Number of proposals sent
  • Proposals signed
  • Average project value

You should be able to get these figures very easily from your CRM system for any given period but let’s talk through an example that we were recently discussing with a client.

The client was generating 11 leads a month from which he generated proposals for 41% of them.

Of the 41% only 25% agreed to, and signed off the proposal.

And the average project value was £10,000

11 leads x 41% x 25% x £10,000 = Average earnings of £11,275.

Now that we know this information we can use it to know where we need to focus our time.

  • Do we need to work on generating more leads?
  • Do we need to ensure these leads lead to more proposals being sent? (look at the quality of the leads generated)
  • How can we ensure that more proposals are signed? (how do we present the proposal? what is our follow up process?)
  • Can we increase the average project value? (when was the last time we had a price increase?)

What would happen if we could increase any one of these things by 10%?

Yes that’s right, your total revenue would increase by 10%.

Choose the one that is easiest for you to influence and focus on that one first. Trying to change them all at once will end up in none being influenced as you won’t focus on getting to the detail of how to increase them.

What is the compound affect of increasing everything by 10%?

If you were to work on 1 driver a quarter for the next year then what affect would this have on your revenue in a year’s time?

Let’s assume that we increase everything by 10%.

So in our example earlier:

11 leads become 12.1 leads.

41% proposals now becomes 45.1%

25% conversion now becomes 27.5%

Average project value now becomes £11,000

12.1 leads x 45.1% x 27.5% x £11,000 = £16,508

£16,508 – £11,275 = £5,233 growth in sales.

£5,233 growth – a 46.4% increase on our initial £11,275 sales generated.

By increasing each driver by 10% we are generating a 46% growth in revenue.

How much effort would you need to put in to increase just one of the drivers by almost 50%? Much more than increasing each by 10% I would guarantee.

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