How Mosaic Sales Growth Happens
There are 5 levers that your mosaics business (and all others) can use to increase revenue. Measure and manage these successfully and your business will grow. Ignore them, and your revenue can still grow given 2 circumstances – 1) a serendipitous event makes your art and reputation become crazy hot, or 2) lady luck is on your side.
The 5 levers are:
Audience – Your audience is the people whom you can tell your story to. They can be rented or proprietary. Rented audiences are generally reached through advertising, search engines, and events produced by third parties. Proprietary audiences are generally subscribers to your publications, social media connections, and your customers.
Leads – Are those who have expressed an interest acquiring your art or services. There is a lot of room here to define "expressed interest" so that it can truly be relevant to your business. For example, if a revenue channel is private commissions, expressed interest may be defined as a request for information or a request for quotation. If a revenue channel is mosaic classes, expressed interest may be defined as a subscription to a newsletter.
Conversion Rate – This is the rate at which Leads become Customers. It is equal to Customers acquired in a period divided by Leads acquired in the period. It is expressed as a percentage.
Average Purchase Amount – This is equal to the revenue collected in a period divided by the number of sales transactions in the period and is expressed in currency values i.e. USD.
Purchase Frequency – This expresses the average number of purchases made by unique customers in a period (usually annually). It is calculated by dividing the number of sales transactions by the number of unique purchasers.
Here is how they work:
1) You develop an audience of 300 hundred municipal leaders (parks & rec, airport authorities, arts etc.). Some of them visit your website, others connect with you on social media, or get your newsletter and so on. They get the messaging you create i.e. my community art projects make more caring communities and this is how…
2) Twenty-five of them ask you for a presentation on how to manage community art projects and 5 others send you a request for proposal (airport parking garage, senior rec center, library, park, and city hall). All of these fit your definition of "expressed interest" and are therefore leads. So far, 30 of your audience, or 10% have become leads.
3) You submit the proposals, make the presentations, and wait. Over the course of the year you win 2 of the RFPs for $10,000, and get 3 $10,000 projects from the presentations. Now you have converted 5 of the 30 leads to a customer. Your Conversion Rate is 5 divided by 30 or 16.7%
4) The average purchase price is easy at this point. You have 5 sales for $50,000 so the average purchase price is $10,000.
5) Just as you finish the 5th project the first customer calls and says we have another project. You do it, and celebrate a great year with $60,000 revenue. In the year you have had 5 unique customers and completed 6 projects. Your purchase frequency is 6 divided by 5 or 1.2
So far we have a great narrative, but how does all this numbers crap help me grow my business? Glad you asked, because this is powerful and you should use it to its fullest.
First, put your info into some columnar view like a spreadsheet such as this. To keep it simple we will demonstrate the first 4 of the levers. Once you see how powerful this is, you will better understand the 5th lever (purchase frequency).
|Leads from Audience||10%|
|Average Purchase Price||$10,000|
Then add a second column and assume you will push the levers forward by 10% each. So you will add 30 more to the audience and from that improve lead generation percent from 10% to 11% and so on. Your 2 columns will look like this.
|Last Year||Year 2 Plan|
|Leads from Audience||10%||11%|
|Average Purchase Price||$10,000||$11,000|
But wait! You only pushed each lever forward by 10% and the revenue grows by 54% (from $50,000 to $77,000). There is not a math error. There is a compounding effect to pushing these levers. As written earlier, this is powerful.