Can you imagine selling $500,000 a year from a territory that is only 50,000 in population? Itís being done every day in small- to medium-size cities across America. Ask around. Chances are your favorite sales rep knows someone doing it.
Most window coverings businesses in the United States sell less than $1 per person
in their markets, yet savvy business owners who focus on customers, dig deep
and create intense awareness of their businesses are achieving multiples of that
amount. Most serious operators achieve $10 per person in annual sales in key
ZIP codes. Almost any businessóor employee decoratorócan achieve
$4 to $8 per person in sales in any ZIP code they choose to develop.
Achieving target sales potential by ZIP code is what territory management is
all about. More than 15 years ago I designed one of the first territory systems
in franchising based on ZIP codes. Today, most leading service-based franchise
companies use ZIP codes to define their territories. But, until recently, I didnít
see how this system could work for window coverings business owners who advertise
and give leads to decorating sales consultants.
Until now, there has not been a simple measurement to benchmark sales potential.
Sure, we can make elaborate proofs based on total market sales ($8 billion window
coverings divided by 285 million population = $28 per person.) But then we have
to adjust it up to six times for high-income ZIP codes, and develop a theoretical
market share to derive a benchmark. Too theoretical. Too hard to believe.
JUST LOOK AROUND!
Instead, take a new approach. The answer is so simple Iím surprised no
one thought of it before. Yet, itís so profound, it may alter your entire
Forget the theory. Just look around. Look at other operators in small to medium
markets and see how much they sell per person. Better yet, look at your own ZIP
codes in your own market. Nothing will prove this theory faster than your own
business. And itís easy to do. Follow these simple steps:
1. List the ZIP codes where you had sales in the last six months.
2. List the total sales for each of the ZIP codes.
3. Next, double the value to get a full year estimate.
4. Divide your annualized sales by the total population. Result: If you are selling
over $200,000 a year, chances are you have some ZIP codes where you sell over
$8 per person and others where you sell less than $.50.
5. Finally, list all the ZIP codes within your market area. This would be from
five to 10 miles from your business location. (Probably, there are some excellent
ZIP codes where you made no sales at all). This will tell you the untapped potential
you can go after with a good territory management plan.
ACHIEVING SALES POTENTIAL
Once you know the potential of your territory you can set out to achieve it.
You canít do it by advertising alone. It takes a combination of advertising
and personal efforts. Things like joining a networking group that meets weekly
for breakfast, or like having an Open House when a customer buys an especially
beautiful window treatment. (She would like to show it off, and you would like
to meet her friends).
One of the best ways to build awareness with high potential customers is to go
to neighborhoods where you sold a customer before. Another way is to look for
homes with custom window treatments. Send mail and distribute flyers to those
neighborhoods every month. Donít stop until everyone knows who you are.
Visit beauty shops serving high-end neighborhoods. Hand out gift certificates.
The more you create awareness in your best areas, the more your sales will grow
to your potential.
CONCLUSION AND ACTION
Whether you are a solo operatoróthe only decorator in the businessóor
you have a team of a dozen decorators, now you can plan your sales by the numbers.
For the first time, you will know how much territory it takes to support the
sales level you want.
Select the right territory and develop a good plan. Soon you will build more
business with less running around. With focus, the business spends less on advertising
and decorators make more money. Even better, customers receive better service
when you are convenient and available. Yes, it is time to manage your territory!
Whether you are a sole manager who aspires to higher sales, or you manage
50 window fashion decorators in a multi-million dollar business, this series
help you manage sales better and increase your profitability. Articles are based
on Steven C. Burstenís actual experience with sales and financial information
for hundreds of window coverings businesses. As the retired founder of Decorating
Den Interiors and author of a how-to book on new business start up, ďBootstrap
Entrepreneur,Ē Bursten is a leading expert in Web site and e-mail marketing
through his company, custEmers.com. Questions and comments welcome: firstname.lastname@example.org or call (888) 333-8981.