es installed services

fHERE are several ways to increase revenues for any business. It can go after new business, increase average sale prices, increase the frequency of its customers' purchases, and/or increase its gross profit margins. Before discussing specifics, let's illustrate numerically how this looks.

Let's say you have l0 builders who average $1,000 per sale per month with an average margin of 25Vo. That would provide you with $30,000 in annual gross margin dollars. (10 x $1000 x 12 x 25Vo = $30.000)

Consider if you increase the number of your customers to 12 and each averages $1,100 per month in purchases. Then, instead of l2 purchases per year, you are able to increase their frequency to 13. You also find a way to bump their average margins to 27Vo because of your value proposition. Cumulatively, your gross margin dollars would increase over 50Vo.

While it may not be practical to increase each number in the equation for every customer, it certainly is something that should be explored. In today's market, any incremental increase would be beneficial. (12 x $1 100 x 13 x 27 Vo = $46,332)

Let's briefly examine how these possibilities could be applied to installed sales.

1. New Customers

Use your installed sales program to go after new customers. It's a fact that installed sales programs can help your other marketing programs. Over the years, I have seen more than one dealer generate new "house package" customers by coming in the back door with this value-added service.