What is the growth rate, and why is it so important?
Does CX really help sales growth? The answer is YES. According to a study by PwC1, 84% of companies that strive to improve their Customer Experience strategy have achieved revenue growth.
Customer Experience is related to businesses’ growth and sustainability because when it is positive, it fosters brand loyalty. As a result, people will return to buy more of your products, hire your services, and recommend your company to others. According to Gartner, 80% of companies’ future profitability comes from 20% of current customers2.
But let’s start with the basics: what is the sales growth rate and how can we calculate it?
Five keys to consider about sales growth rates:
- It is a KPI for companies, sales departments, and employees.
- It is measurable, understandable, specific, and comparable.
- It predicts the revenue increase rate over a certain period.
- It enables data-driven decision-making.
- When it is lower than in previous periods, a different approach must be taken to drive revenue and achieve the goals set.
How can I calculate the sales growth rate?
First, we need to compare both the value of net sales for the initial and the current period and then apply the following formula:
If we also want to know the average annual sales growth rate, or how much our business has grown over time or for specific years, we need to use the following formula:
What factors influence when reaching a good sales growth rate3?
- Organization size.
- Competition’s performance
- The industry’s general growth.
- The company’s unique sales targets.
- The leadership of the organization.
- Sales team capacity.
- Offering physical points of sale and digital sales channels.
- Delivering a memorable CX.
Five sales productivity indicators4 stem from this:
- Sales number
For a company to be profitable, the annual sales level must be higher than the sum of all expenses. This means setting clear goals for each sales rep and department.
87% of customers who have had a great experience with a company say they are likely to buy from that same company again, but 74% will walk away from a brand if they find the buying process too complicated5.
It allows us to understand how the sales area is performing, how well the buyer personas have been defined, whether the established goal is being reached using the defined marketing strategies, or whether something needs improvement.
Having the cheapest product does not make customers increase their loyalty to brands, they are willing to pay up to 17% more for a product if they receive a good customer experience and 52% would spend more for a fast and efficient experience5.
- New and lost customers
Getting more customers is an indicator of the productivity and performance of the sales force, as it reflects whether the strategies to obtain more customers are working or whether another alternative should be sought for leads generation. Subsequently, converting leads into customers, in addition to reinforcing their satisfaction, builds customer loyalty and avoids losing them.
Keeping an existing customer costs between five and 25 times less than acquiring a new one. Those who already use your brand are 50% more likely to pay for a new product or service from your company. Increasing retention by 5% could increase business profitability by up to 75%6.
Next Generation CX Services and Capabilities help identify what customers need and what their preferences are, which is why 80% of Marketers believe that using buyer personas increases conversion rates5.
- Sales calls
The number of calls that result in a sale is related to excellent customer service, which is why agents must be trained, and times and actions must be optimized within a previously defined protocol.
If a customer reaches via social media or the contact center and it takes more than 20 seconds to connect with a human agent, the CX the company provides is worse than 80% of other companies5.
- Customer satisfaction
This aspect is fundamental and should be the focus of all strategies. The Customer Satisfaction Score and the Net Promoter Score help us to understand the productivity and effectiveness of the teams, as well as the number of claims and complaints also contribute to customer loyalty. If customers are treated in a respectful and satisfactory manner, they can become brand ambassadors in the long run.
A report by Deloitte and Touche found that companies that align with customer needs are 60% more profitable than those that do not. Conversely, customers spend less with a company after having a bad experience, which can translate into losses of up to 3% of revenue5.
How can a company increase sales volume?
Since business development and success are related to revenue growth, it is advisable to consider the following recommendations to increase your sales volume:
- Improving CX drives customer loyalty, customer retention, the attraction of new customers and, in short, the organization’s profitability.
- Having digital tools that allow you to display information and reports in real-time will help you make data-driven decisions and increase performance.
- Automating tasks/processes will increase your productivity.
- Incorporating Customer Relationship Management will allow you to manage your strategies in a faster and more personalized way.
- Developing innovative sales strategies and lead-generation campaigns will lead you to achieve increasingly better results.
- Training sales personnel on the product and service offered will add to the Customer Experience you provide.
Rethinking and reorganizing your strategies to adapt to customer demands will help you close the gap to achieve your business objectives.
Moreover, in a context where 72% of customer interactions involve emerging technologies such as artificial intelligence, chatbots, and other mobile messaging tools, digital channels, and automation solutions, it is essential to provide end-to-end experiences to generate higher sales5.
Due to the above, today’s digital channels are not only a means of contact for customer service, but they also represent new points of sale. This explains why CX is linked to an increase in sales, among other indicators, for the growth of organizations. Take your business to the another level with Atento’s CX expertise!
- 10 pasos clave para crear una estrategia de customer experience (10 key steps to create a customer experience strategy). Informa BTL, 2021.
- Five customer retention tips for entrepreneurs. Forbes, 2012.
- Cómo calcular el índice de crecimiento de ventas de tu empresa (How to calculate your company’s sales growth rate). Hubspot, 2021.
- 8 indicadores de productividad en ventas que debes conocer (8 sales productivity indicators you should know). Hubspot, 2021.
- 37 estadísticas que muestran la importancia que tiene la Experiencia del Cliente en 2021 (37 statistics showing the importance of Customer Experience in 2021). CIO México, 2021.
- Las mejores estrategias para fidelizar clientes (The best strategies for customer loyalty). WeWork, 2020.