To ensure a sustainable level of commercial success in our cutthroat digital age, offering value, driving consumer loyalty, and consistently surpassing your targets are of the utmost importance.
A loyal, high-value repeat customer is worth more than a cheap sale, and by implementing the right strategy, setting the right goals, and working with the right KPIs, you will achieve the results you desire.
To win on today’s commercial battlefield, incremental sales is the name of the game. By taking a more strategic approach to your business’s profitability, you will stand a far greater chance of growing and evolving your business over time.
Here we explore the meaning and value of incremental sales in the world of business, as well as the additional KPI examples and metrics you should track to ensure ongoing success.
Without further ado, let’s get started, first with the incremental sales definition.
What Is An Incremental Sale?
Fundamentally, an incremental sale is a conversion that occurs as a result of a specific promotional or marketing activity. This can include anything from pay-per-click (PPC) advertising to a particular piece of content marketing or social media campaign.
One study suggests that the three biggest sales priorities confirmed by business leaders are closing more deals (28%), improving sales funnel efficiency (18%), and enhancing sales technology (11%).
Incremental sales, at its core, relates to each of these three areas and more.
Your marketing activities attract qualified leads, and sales convert those leads into paying customers. These paying customers can, in turn, potentially become repeat purchasing brand advocates – the most valuable kind of customers a business can attract.
To put our incremental sales definition into a real-world perspective, here’s a hypothetical scenario we’ve created for reference:
A green clothing retailer typically sells $14,000 worth of ethical sweaters per month without investing in advertising. In November, while running an advertising campaign that cost $1,500, the retailer sells $20,000 worth of ethical sweaters online. The owners calculate their incremental sales in this way:
Incremental Sales ($): $20,000 – $14,000 = $6,000.
If your incremental sales exceed your initial marketing investment or result in an indirect increase in sales that you can attribute to a specific marketing activity or campaign, you will be able to track the success of your efforts on an ongoing basis. And to ensure your incremental sales remain successful, there are best practices that you should follow.
Incremental Sales: Best Practices
To help steer your success, and to additionally put light on the incremental sales definition, here are the best practices you should adhere to:
- Build consumer relationships: Forging solid customer relationships is essential to the long-term success of your incremental sales efforts. To do so, it’s important to showcase your value by creating, and delivering, content that is not only tailored to the needs of your target audience but will provide answers to your customers’ (potential and existing) most burning consumer questions. In addition, you’ll want to spark meaningful dialogues with your audience via your most engaged social media channels. At the same time, take the time to offer personalized thank yous to your customers for their engagement, interest, or purchases. Customer loyalty is driven by likability (86%) and trust (83%) – a clear indication of the value of taking the time to foster meaningful customer relationships. By taking care of the overall customer data management practice, you can gain additional insights and hence tailor your strategy to deliver the best possible customer experience.
- Establish your business goals and key performance metrics: To squeeze optimum value, and to define incremental sales business efforts, outlining your ultimate business goals is essential. That said, experimenting with various types of media, channels, touchpoints and platforms should form an integral part of your budgeting strategy. To ensure you yield the results you desire, first establish your goals, then decide on the metrics that you will need to track to measure your performance. Moreover, you should execute a controlled promotional experiment to gauge which channels best appeal to your target audience and to understand the reasons why these work the best. By amplifying business dashboards, your whole strategy can be integrated into one, interactive and neat place, therefore, tracking and measuring your business performance can be easily done with few clicks.
- Ask focused questions: When refining your sales goals, it pays to ask yourself focused questions that will help give your marketing efforts direction. For instance, you might ask yourself the question, “How can I boost my email marketing sales?” As a result of asking this focused question, you’ll be able to monitor conversions as a direct result of your consumer emails while identifying where you need to make improvements to increase sales.
- Remain consistent: To benefit from the power of incremental sales, it’s important to remain consistent in all areas of your business. This means tracking the right KPIs on a regular basis to extract valuable insights and make constant improvements, making your branding cohesive across touchpoints, maintaining an active presence through your social media channels, and delivering content that is engaging and useful in equal measures.
KPIs To Help Boost Incremental Sales
Without a doubt, working with KPIs that align with your core commercial goals leads to a greater business intelligence strategy as well as continual growth and progress.
To help you in your quest to define incremental sales success, here is a rundown of the essential KPIs that you should track on regular basis.
Improve Your Marketing KPI Performance
First, we’re going to focus on 3 KPIs and metrics that will help you refine your marketing efforts to boost incremental sales.
1. Goal conversion rates
A conversion is a desired action taken by a customer or site visitor, and as this is a particularly goal-based metric, conversions can differ greatly from business to business.
In many cases, your conversion goal will be the closing of a sale, but this particular type of metric can extend to email subscriptions from a specific piece of blog content, free trial sign-ups, or eBook downloads. Tracking your conversion rates is critical, as you’ll quickly be able to identify your strengths and weaknesses and discover high-converting channels to expand upon as well as actions you can take to boost conversion rates in specific areas of the business.
2. Landing page conversion rates
It becomes obvious when we drill down further into conversion rates that the landing page conversion rate KPI is one of most invaluable website metrics a company should follow. It gives you a panoramic snapshot of the performance of particular pages of your website and offers you insights into how to optimize your content for increased sales success.
By conducting A/B testing and comparing the performance of different pages of your website, you’ll be able to take actions that enhance the usability and appeal of your various landing pages, which will ultimately result in more engagement and a rise in consistent sales.
3. Click-through rates (CTR)
When it comes to measuring the value and success of your various marketing activities over time, analyzing your click-through rate (CTR) is essential.
CTR refers to the ratio of clicks compared to the overall number of impressions and as such, offers an insight into how effective your content and communications are in the eyes of your audience. To extract the most value possible from your CTR in terms of measurement, discover the average CTR for your industry and use it as a performance benchmark.
To explore these metrics in greater detail, visit our marketing KPIs and template examples page.
Build Your Sales With These KPI Examples
Here, we’re going to explore 3 KPIs and performance metrics examples that will help you enhance your sales efforts to improve your incremental sales.
1. Sales growth
By measuring the growth of your sales, you essentially measure the growth of your business.
By tracking your sales growth over a predetermined period, you’ll be able to monitor the performance of your sales representatives while gauging if you’re on course to meet your targets – a pivotal metric in the ongoing growth and profitability of your empire.
2. Sales targets
Drilling down into specific sales goals and targets will help you consistently meet your business goals. Based on tracking actual revenue versus forecasted revenue, the sales target KPI offers a wealth of insight into your ability to meet your forecasted revenue based on a set of predetermined figures and goals.
An assessment of your actual versus forecasted revenue will, hopefully, show that you have outperformed your predicted amount. But if not, you’ll be able to develop initiatives to tackle the problem before it proves detrimental to your business.
3. Customer acquisition costs
The acquisition of a customer does come with its costs – which is the very reason that encouraging loyalty offers so much value.
Customer Acquisition Cost (CAC) refers to all costs incurred while signing up a customer. Different investments in this area will often depend on your industry or line of business. For instance, if you’re an online marketer, your CAC will include the various investments you’ve made to deliver a particular campaign.
With this KPI, the ultimate goal is to boost your customer lifetime value in addition to the average revenue per unit or user/account, while reducing your overall CAC to remain profitable.
To explore these metrics in greater detail, visit our sales KPIs and template examples page.
It’s clear that by focusing to define incremental sales efforts, you’ll help to ensure you not only maintain your profitability, but by tracking the right metrics consistently, improve your business over time. This can only result in increased brand awareness and customer loyalty – two of the most valuable elements of any successful commercial empire.
For more business-based insights to help you in building your incremental sales, you can try our software for a 14-day trial – completely free!