Transaction velocity is fundamental to any growth strategy. It is the length of time which a customer takes from the time of recognising a need to acquiring a solution which is the most critical determinant of our ability to grow faster. When the prospective customer delays, hesitates or defers the decision to purchase, it materially impacts our revenue growth and our bottom line. We need to do everything we can to reduce the sales cycle time.
If you break the purchase experience down into a series of decisions and activities, you will notice that the customer has to go through a sequence of steps or stages to arrive at a decision to purchase. This process starts with a recognition of a problem or need. A lot of these situations are outside our control and happen independently of our influence, but some can be prompted.
Our first task is to educate customers on the need or problem or to remind them of the need. Advertising, viral marketing, conferences, journal articles, public relations and so on do this task for us, but we must ensure we are getting to our target audience.
Having alerted our customer to the need to find a solution, our next task is to ensure that the customer can readily find us and our solution. I am continually amazed at how long it takes to find a specific item or service, get answers to questions and then identify somewhere where I can buy. Your task is to make it easy to find you, provide comprehensive information on availability, price, use, after-sales support and disposal.
These days this can be done very effectively on your website, but make sure customers can actually find you through a variety of search questions. You also want to make sure that the right customers come to you and that you set their expectations correctly before they arrive at your door or online shopping store.
Have you ever been frustrated trying to buy something, whether it be in a shop or online? I find it amazing how difficult it is sometimes to hand over the money. The buying process should be straightforward and pleasant, not an obstacle course that only the most patient or determined can survive. Finally, you want to make sure that the usage experience is a good one so that they come back again and tell all their friends to buy from you.
When you reduce your transaction velocity and increase your prospect conversion ratio, you improve your sales and marketing productivity and generate gross margins faster, thus providing cash to fuel growth. You can help customers recognise a need and help them get an effective solution in a time efficient manner.
You need to make it easier for customers to find you, have their questions answered, select the right product or service and then have a good experience buying and using. By doing so you will stand out from the crowd. Anything less and you open the door to your competitor.
Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.