Sales Volume: Everything a Business Needs to Know

You hear volume, and your mind automatically goes to either one of these two things: the loudness of a sound or the quantity of liquid.

But in the business world, it’s a whole different thing. Yes, we’re talking about sales.

For almost any company, having a high sales volume can mean the difference between keeping the lights on or packing up. Exactly — it’s that important. Yet, not every marketer understands how to get those numbers up.

So, in this guide, we’ll be breaking down what it is and how to increase your monthly and annual sales volume.

Contents

• What is sales volume, and how do you calculate it?
• Formula for month-to-month sales volume comparison
• Sales volume variance formula
• Formula for sales volume variance in percentage
• Why is it important for businesses?
• How to increase sales volume: 9 best tips that work
• 1. Try to know your customers better than their friends
• 2. Know your product like the back of your hand (or face, whatever rocks your boat)
• 3. Sell the benefit of the product to them, not the shiny gimmicks
• 4. Master the art of nurturing and qualifying leads
• 5. Make sure the sales process is easier than eating pie
• 6. Become a marketing pro
• 7. Create a reward system that works
• 8. Learn from your competitors
• 9. Pay a little more attention to your top buyers
• Conclusion

What is sales volume, and how do you calculate it?

In business, the sales volume definition is straightforward.

It means the total number of products your company sells within a given period of time.

It works the same for any service-based business. Only instead of products, you measure the quantity of services or subscriptions sold.

So, if you are peddling ice cream from a truck, that would be the number of cones you sell in a month or a year. If you are a hairdresser, that would be the number of haircuts, perms, braidings, etc. done. If you’re a branding agency, it’s a number of logos you design.

You get the picture.

Okay, that sounds quite easy. The next thing is how to calculate sales volume. But hang on, does it always involve just counting the number of services given or stuff sold? Yeah, basically. But you can go further to assess how your business is doing.

Let’s check out the main formulas any company should know and use.

Formula for month-to-month sales volume comparison

Sometimes (pretty much always), sales vary from month to month.

So, if you want to do something fancier than just counting the number of items sold, you might want to try this formula. Let’s assume you want to compare the sales you made this month vs. last month; what would the formula look like?

Example:

Using this, if you sold 100 knitted sock puppets in January and then sold 120 in February, that would be:

[(120 – 100) ÷ 100] x 100 = 20% increase in sales volume in February

Not bad for pretty much any business! Not bad at all.

Sales volume variance formula

Now, let’s talk about sales volume variance. What in the world is this?

This metric refers to the difference between actual units sold and the number you expected/projected for a particular period. This is useful to understand whether your business is on track according to your monthly or annual plan.

The sales volume variance formula is pretty straightforward:

Basically, the number you receive will be the difference in units. From there, you’ll get one of these 3 scenarios:

• Positive variance: Any positive result (e.g., 3, 10, 247, 1283, etc.). This means that you’re doing better than expected. Congrats!
• Negative variance: Any negative result (e.g., -2, -21, -385, -2950, etc.). This means that your sales aren’t as good as you were projecting.
• Zero variance: When your variance equals zero. This simply means that you’re right on track when it comes to your sales expectations.

Example:

Imagine that you expected to sell 600 units of your new hair growth oil, but then you sold 700.

700 – 600 = 100.

That’s an extra 100 units than planned, which is a positive variance. And now, you already know that it means that you’re crushing it and doing better than planned.

Formula for sales volume variance in percentage

You can also track sales volume variance in percentages. If that’s your choice, the formula is going to look a bit different:

Example:

Let’s do the calculations for our hair growth oil business from the previous example:

[(700 – 600) ÷ 600] x 100 = 16.67%.

Notice how none of this formula says anything about the profits made? Yes, that’s because sales volume isn’t really about that. So, what’s the point of measuring it? That’s what the next section is about.

Why is it important for businesses?

Okay, now we know the answer to the question, “What does sales volume mean?” What is so special about it? Let’s break down why it matters for business besides impressing others with your sales growth.

• Shows the health of your business. It acts like a business fitness tracker, showing how effective your marketing campaigns are. If the volume of sales you make is declining, it’s a sign your business is not in good shape.

This quote sums it all up:

Source: X

• Shapes your decisions and strategy. You can tell when you need more units based on solid data instead of your guesses. Plus, you’ll see what products or services are more popular, so you know when it is time to cut back on one item in favor of another.

This will help you keep your inventory in good shape and know exactly when to stop promoting a product or service. Besides, you can spot where most sales are coming from to grow that channel even further.

• Track sales performance. Do you need to hire more sales reps, or should you consider letting that one sales rep go? You’ll know the answers when you do a sales volume analysis.

You can identify your most motivated sales members and when it’s worth it to invest in their education.

Besides all these, having a high volume of sales can give you serious leverage when negotiating deals. At the least, manufacturers are more likely to be flexible when you’re buying a million units of a product compared to when you’re buying just a hundred.

At the end of the day, there are many types of data that marketers have to know, and this is just one of them. No matter how you look at it, your sales volume can help you accurately assess your company’s health in the present. Plus, you can even predict the future to a large extent.

Sounds good? Let’s see how you can work on getting those numbers up in the next section.

How to increase sales volume: 9 best tips that work

Now that you know what the volume of sales is and even how to calculate sales volume variance, what now? Here are some of the tested and trusted tips that can help you jack those numbers up:

1. Try to know your customers better than their friends

Okay, no one is advocating that you should be a creepy stalker. But let's face it; you need to understand your clients if you're going to be able to sell anything to them.

That means you have to know what they need before they know it and how exactly your product or service can help them.

Source: GrowthDot

For this to work, you'll have to observe your customers’ purchasing patterns. Maybe even conduct surveys to get into their heads a little. You could also hang around online forums and communities where they like to talk about their interests.

On top of all that, you'll need some solid keyword info, which is what keyword research gets you. If all these still give you stalker vibes, don't worry. It's a totally legal and legitimate business practice.

Now, what do you do with all that data you gathered anyway? Create buyers' persona, of course. Yet, it will be hard unless you know why your offering is special. This brings us to the next step.

2. Know your product like the back of your hand (or face, whatever rocks your boat)

We are not just talking about the features but also about what makes your product different from your competitors. What is the unique value of your product that will get the customers to choose yours in a sea of similar items?

Source: X

If you’re scratching your head in confusion, don’t worry. It’s really not that hard to figure out. It could be the price — maybe you offer the same thing of the same quality as your competitors but at lower costs. People love a bargain, and this could help your sale volume climb higher.

Maybe you sell at the same price, but you use the best ethically sourced organic ingredients. Maybe you give a certain percentage of your profits to social causes.

Sometimes, it’s the fact your product has better features than your competitors. Whatever it is, make noise about it — even the smallest detail.

3. Sell the benefit of the product to them, not the shiny gimmicks

Expert marketers know that the real sale happens when the customers understand what’s in it for them. Basically, this is the real secret to increasing sales volume.

You can talk about the newest technology feature until you are blue in the face. But if you don’t explain how all that can benefit your buyers, they will eventually get bored and move on to something else.

So, right off the bat, highlight their pain points and the clear value of your product or service as the solution.

Source: Ceralytics

It’s even better when you can show it visually and with real-life examples. That’s why, in addition to talking about your offerings, make demo videos and case studies of them in action.

Are people raving about your products? Show off those testimonials and reviews as well. This will create a ripple effect where more users will want to buy your stuff and enjoy the benefits.

4. Master the art of nurturing and qualifying leads

Obviously, knowing sales volume meaning is not the same as being a pro at turning leads into closed sales. The thing is, not everyone who checks out your offer will be ready to buy there and then.

Some will be, for sure, but many more might still be trying to decide between your product and your competitors. Then there is the other group who are curious and may just be hearing about you for the first time.

Screaming “buy, buy, buy now!” at every one of them won’t work. So, what to do?

Identify and group those interested based on how ready they are to buy in. This helps you know who needs to be nurtured and what kind of marketing will work best for them. You can then use the right content to nurture each person based on where they are on your sales funnel.

For those ready to buy now, you can use email campaigns offering discounts or special personalized offers. You want to ensure that you are making the right contact with each lead at every stage of the sales funnel.

Pro tip: You can also work on your upselling skills so you can increase sales without being pushy. This is where you suggest the right complementary product/service that goes with a sale.

So, if someone’s getting a haircut and a new hair color, they might be open to getting a new haircare product specially designed for colored hair. Your ultimate goal should be to attract customers without selling — a method that has proven very effective.

5. Make sure the sales process is easier than eating pie

If you really want to increase your volume of sales, there is no point in making the sale process feel like assembling Ikea furniture. The fewer the number of steps needed to buy from you, the higher the sales. So, what do you need to do?

Make it easy for people to add products to their cart and checkout with just a few clicks — a one-step checkout process works even better.

Source: X

While you’re at it, make sure the website loads fast, your navigation is easy, and your titles, images, and SEO slugs are both descriptive and optimized.

Do you offer multiple payment options? You don’t want to have people abandon carts because they can’t pay.

When you figure out which sales channels perform the best, put more resources into it to maximize the results. This could be automating routine tasks like answering FAQs, handling orders, etc.

Now, here is a question for you — what do social proof, a responsive support team, and a simplified ordering process all have in common? They can all contribute to improving the number of sales you make. So, get onboard and use all of these.

6. Become a marketing pro

No one is going to buy something if they don’t even know it exists in the first place. That’s why you have to be good at creating buzz about your products and services. You can do this through ads, social media, and sales promos around the new product releases, etc.

It’s even better when you do this for a specific product/service that’s already a crowd favorite.

Sometimes, it’s just more profitable to invest more in a fast-selling item instead of a failing one. Keep this in mind for when you’re not sure where to channel your marketing efforts.

Thankfully, there are many ways you can get the word out about your business and drum up interest. They range from guest posting and influencer marketing to social media and email marketing. As much as possible, leverage all of them.

7. Create a reward system that works

It takes a lot of people to successfully record impressive sales. So, it makes sense to have a reward system in place that acknowledges the role everyone plays.

You can create a two-part system that rewards both your loyal customers and your sales team.

For your clients, you can introduce a loyalty program. This could be a point-based system that lets them exchange points earned for cool gifts or products. This will improve your retention rates and turn them into brand ambassadors.

Source: CleverTap

You can also introduce a referral system. This means they get special rewards for referring people, and the new customers get something as well.

Be sure to focus on nurturing your relationship with them. Even something as simple as a personalized birthday message can have a positive impact.

One last thing. Your reward system should not just be about your customers. Your sales team can also be incentivized to do more if their efforts are appreciated.

Source: Achievers

Offer some bonuses to sales representatives that exceed the set targets. Besides, you can post the best employee on the company’s social media. This will tap into the law of reciprocity and keep morale high.

Source: X

8. Learn from your competitors

Learning from your competitors can help you come up with creative ideas for marketing your own products.

Source: FasterCapital

For example, how do they market their products? Where do they get the best engagement? If they’re very active on social media or specific platforms, then consider investing in those platforms, too.

If they offer lower prices than your products, then maybe it’s time to consider your prices. Of course, you’ll need to check first if their services include the exact same thing as yours.

Do they give any discounts? If yes, then what kind? The more you know about them, the easier it is to beat them at their game while avoiding most of their mistakes. That’s the best of both worlds.

9. Pay a little more attention to your top buyers

Do you know those customers who have been with you for as long as you were in business? The ones that come back like clockwork to make repeat purchases?

It’s very tempting to think they’re already locked in and simply focus on the new ones. But this isn’t always the best move.

These are your top buyers, and you need to give them some extra attention. Beyond the loyalty programs and discounts, you can also send them special brand merch. Besides, do your best to ensure that they’re always getting great service.

The whole point is to build a lifetime relationship that also boosts your lifetime customer value.

Conclusion

Many people have thought that it’s impossible to understand how volume sales work, but now you know that’s not true at all.

At the core of all tips on how you can improve your sales is this — you need to understand the needs of your customers. And then provide valuable solutions. That’s really the key to all sustainable business strategies. People go where they feel valued.

Also, when using these strategies, be sure to stick with them. You are likely to get more impressive results when you are consistent. Naturally, consistency does not cancel adaptability, so choose what works for you and adjust it to fit your own needs.