CONTENT ABOUT MARKETING .
- Understanding Cost of Sales
- what should be administered
- How to reduce the cost of sales effectively
Finding a way to reduce the cost of sales is an obsession for any professional. Find out where to attack to reduce this cost!
Cost of Sales ! Many companies close their doors due to a lack of understanding of the operating costs involved, especially in the commercial area. Reducing the cost of sales represents a great competitive advantage. In addition to allowing the entrepreneur to invest in improving products and services.
But what is the secret to making this happen? How to reduce the cost of sales without harming the quality of service? That’s what we’ll see in this post. Follow up!
Understanding Cost of Sales
Also known as CMV (Cost Per Merchandise Sold), it represents the sum of the expenses involved in making a sale, from the structuring and legalization of the company to the moment the service is performed.
Every business exists to generate profit for the entrepreneur and offer benefits to the final contractor. And everything related to this process generates expenses. Even in the Information Technology segment, which focuses mainly on providing repair and maintenance services or in the area of software aimed at development, delivery and service.
What should be administered
The first step in reducing the cost of sales is to list all the steps in the process. In the IT industry, the main expense is related to the time spent in providing services. A single value must be stipulated for each fraction of time worked (hours, minutes, day, etc.). Furthermore, it is necessary to consider the professional’s level of knowledge. Training time and experience are key to defining the value of your workforce.
But other expenses cannot be neglected, such as the costs of legalizing the company, purchasing any equipment or investing in specific systems and programs.
Another very important aspect is the customer acquisition cost (CAC). It means how much is spent to attract and win over a new consumer. It involves marketing expenses, promotions, fundraising actions, salaries and sales commissions, among others.
Although complex, it is a critical metric for more accurate budgeting and forecasting about how much a company will need to invest in growing its customer base. And all of this must have an impact on the final price formation. Know what to consider:
- Manage your customer base correctly;
- More than registering data, manage the relevant information to generate new business;
- Track the billing and demand history generated by each contractor over time.
- Identify the most important ones, those that contribute the most to your company’s cash and deserve the most attention.
How to reduce the cost of sales effectively
After all expenses are collected, organize the accounts according to their origins. Example: fixed and variable expenses, purchase of equipment and software, rental of work space, etc. Next, review the possibilities for reduction in each area, starting with the largest expenses identified.
Also have a list of the software and programs needed for your activities. The most important thing is to find the best cost/benefit with systems that will meet the needs of the contracting company and guarantee the quality of the service provided.
After all expenses are collected, organize the accounts according to their origins. Example: fixed and variable expenses, acquisition of equipment and software, labor costs, etc. Next, review the possibilities of reducing each account, starting from the highest expenses identified, here we emphasize again that the fragmentation of sales processes such as prospecting, qualification, sales, after-sales and customer success can be the best way to reduce, as the costs of individual specialists in each process in comparison with the results generated, can evidence a greater productivity in sales and with this the individual cost of each sale becomes lower.
Also have a list of the software and programs needed for your activities. The most important thing is to find the best cost/benefit with systems that will meet the needs of the contracting company and ensure the quality of the service provided, but mainly to reduce sales costs with labor. inbound marketing platform integrated to the site, such as RDStation and WordPress, both properly integrated with CRM and BI, such as PipeRun and Rock Content content platforms , as well as both can be integrated with online presentation tools, such as meetime or even Google’s calendars and qualification and pre-sales platforms such as Exact Sales and without forgetting the email marketing and SMS platform with mail2easyPRO , that is, when greater integration and interaction between the tools used, the better the results operational areas of the commercial area.
We cannot forget to reduce the friction of the sales team with the use of CRM and in this we indicate mobile applications, which eliminates the need for manual inclusion of data, feedbacks and field activities, with the use of commercial APPs it is very easy to conquer the adhesion of sellers, because the bureaucracy becomes even lively and easy, now I have to “pull the coals for my roast even more”, with the uMov.me platform , these applications are easily built.
Serving a (current) customer base costs an average of five times less than acquiring a new one. New business acquisition rates will be much lower on his own basis, as he already knows the company and already has some kind of relationship. Create strategies for loyalty, capable of stimulating the hiring recurrence. Sign contracts with larger companies offering special conditions, but harming your company’s cash flow.
Reserving a current customer costs an average of five times less than acquiring a new one. The acquisition fees will be much lower, as he already knows the company and already has some kind of relationship. Create strategies for loyalty, capable of stimulating the hiring recurrence. Sign contracts with larger companies offering special conditions, but harming your company’s cash flow.
Invest in marketing actions strategically. When it comes to advertising, it’s not the amount of money invested that counts, but getting your brand name in the right places using the right vehicles.
Whether to improve your final price or to increase your profit margin, it is essential to look for ways to reduce the cost of providing service. But this should not be done just to achieve competitive advantage based on final price. Keep in mind that the ideal is a fair price, which is good for those who hire and also for those who provide the service.
So, did you like this article? You will certainly find it very useful to continue learning about sales, this time about the Sales Cycle .