Minimum level of sales growth
Posted: Sat Feb 01, 2025 6:52 am
To assess the success of promoting a new product, it is advisable to determine the minimum level of sales growth (MLSG), which is necessary to recoup the funds invested in this process:
Def = (Z + Zdop) × (100% + Рpor) / Рmargin
Where:
Opr is the minimum level of sales increase, expressed in monetary terms – rubles;
Rpor – implies a threshold latvia email list point of profitability, that is, the minimum level of return on investment that the company considers acceptable, expressed as a percentage;
Rmarg is the percentage of marginal profit from the total revenue from the sale of products that the company promotes.
For example, the company "Satellite" has a minimum sales growth of 8%. This means that in order to recoup the investment within four months, it is necessary to maintain the same level of growth. Provided that the threshold profitability for the year is 24% or 2% monthly, and the marginal profitability of sales is 8%.
These calculations help the company determine the minimum level of sales increase required to make the investment pay off. As a result, this will allow it to set goals and evaluate the effectiveness of the new product promotion.
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
Mistakes in promoting a business
In today's society, competition in the market is extremely fierce, and in this struggle, every day, companies fight to attract the attention of their potential consumers. To achieve success in promoting an enterprise in the market, it is necessary to avoid fatal mistakes that can lead to complete failure.
Ineffective use of marketing channels
Many organizations focus on just one marketing area, which can mean missing out on a large number of potential customers.
Solution: It is necessary to take advantage of all the possibilities of various marketing channels, including email marketing, contextual advertising, SEO optimization, paid advertising campaigns, etc. It is also advisable to identify the effectiveness of each method and focus on the most effective ones.
Poor quality of product or service
High quality of a product or service is of undeniable importance for effective brand promotion. It influences the creation of a positive impression of the brand as a whole. Negative consumer experience, in turn, can cause a decrease in interest in the company and even undermine its authority.
Solution: In order to meet customer needs and exceed their expectations, special attention should be paid to the quality of products and services. Analysis and collection of feedback from customers should be carried out to continuously improve the product.
Def = (Z + Zdop) × (100% + Рpor) / Рmargin
Where:
Opr is the minimum level of sales increase, expressed in monetary terms – rubles;
Rpor – implies a threshold latvia email list point of profitability, that is, the minimum level of return on investment that the company considers acceptable, expressed as a percentage;
Rmarg is the percentage of marginal profit from the total revenue from the sale of products that the company promotes.
For example, the company "Satellite" has a minimum sales growth of 8%. This means that in order to recoup the investment within four months, it is necessary to maintain the same level of growth. Provided that the threshold profitability for the year is 24% or 2% monthly, and the marginal profitability of sales is 8%.
These calculations help the company determine the minimum level of sales increase required to make the investment pay off. As a result, this will allow it to set goals and evaluate the effectiveness of the new product promotion.
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
Mistakes in promoting a business
In today's society, competition in the market is extremely fierce, and in this struggle, every day, companies fight to attract the attention of their potential consumers. To achieve success in promoting an enterprise in the market, it is necessary to avoid fatal mistakes that can lead to complete failure.
Ineffective use of marketing channels
Many organizations focus on just one marketing area, which can mean missing out on a large number of potential customers.
Solution: It is necessary to take advantage of all the possibilities of various marketing channels, including email marketing, contextual advertising, SEO optimization, paid advertising campaigns, etc. It is also advisable to identify the effectiveness of each method and focus on the most effective ones.
Poor quality of product or service
High quality of a product or service is of undeniable importance for effective brand promotion. It influences the creation of a positive impression of the brand as a whole. Negative consumer experience, in turn, can cause a decrease in interest in the company and even undermine its authority.
Solution: In order to meet customer needs and exceed their expectations, special attention should be paid to the quality of products and services. Analysis and collection of feedback from customers should be carried out to continuously improve the product.