And put Cash in the Bank
Have you ever found yourself lying in bed in the early hours of the morning, when you should be sleeping deeply, girding yourself for the day ahead, and wondering just what you can do to get your business back on a growth path? A path that will put cash in the bank and relieve of those worries that are keeping you awake at night.
Here are seven steps you can take to grow again and generate cash and profits.
1. Focus on the 20%, not the 80% - I’m sure you’ve heard of the 80/20 Rule. You will win 80% of your profits (and sales) from 20% of your customers. They will be buying from you more frequently and in larger amounts than other customers. They do so because you meet their needs; solve whatever business, personal, emotional problems they have. They trust you, and believe they have developed a relationship with you.
You can waste a lot of your promotional dollars and effort by no focusing, by trying to target everyone – after all, you don’t want to miss a potential sale – forgive the sarcasm, but I come across this belief so often; that there’s some magical marketing message that will resonate with everyone possible (not potential) customer you have.
It doesn’t work like that; your product offering must satisfy the needs of your most likely customer, not your least likely customer.
For a different take on this, read Does your marketing tail stretch to the sea?
Be very clear about who your target market is. Once you do that, you’ll cut your wasted marketing expense to zero and start getting maximum return from all your marketing.
2. Make sure WHY they should buy from you is very clear. You must have a real point of difference with your competitors, something that makes you stand out, something that your likely customers really value. It’s your USP, your Unique Sales Proposition, or Unique Value Proposition. I’ve written about USPs and how to develop them before (Does your message get your prospect’s attention?).
Without that, how do you persuade your prospect to choose you or to change suppliers to you? Of course, to develop your USP you must know which prospects you are targeting, you must understand them, their wants, needs, and desires.
If you are still competing with other businesses, then your USP needs work. Create a USP that makes your business the clear and only choice for your customers.
3. Develop offers, bundle products, but don’t compete on price, compete on value. Bundling is packaging a group of products together and selling them at a price less than the customer would pay if he bought them individually. This is often used in Travel industry and computer sales.
Instead of offering additional products at full prices, the customer is offered additional products or services at a discounted price.
The objective is to use the discounted price to encourage the customer to increase their purchase and increase the volume of Gross Profits (that’s what pays for all those Overheads), but at the expense of % Gross Profit.
This add-on product can be either given away or sold. Even if you give away the add-on product, it's better than giving a discount on your main product. Now be aware that the bundled products need to be priced, or else they have no value in the eyes of the customer.
4. Sell to Groups - When given the choice between selling to an individual, or selling to a group, the majority of salespeople choose to sell to the individual. But when you sell to groups, you can significantly increase the return you achieve.
What do I mean by sell to groups? Have you ever been asked to make a presentation to your local Chamber of Commerce, or other such organisation? That’s a group to who you are, in effect, making a sales pitch. And then there are seminars you organise, training workshops which can lead to “Can you help me with that?”.
Don’t forget the increasing popularity of webinars; they enable you to reach out to an audience well beyond your local market. Those webinars can be recorded and rerun. The opportunities are endless.
Selling to groups gives you three strategic advantages:
Social Proof – All the individuals in the group are reassured knowing that others are there exploring the solution to their own problem. It validates that they are like others, and not some strange freak of nature. Social proof is very powerful.
Pressure – A group setting by default applies buying pressure on others. Why? Well, because they want to confirm to themselves that they aren’t a freak of nature, that they make
The Group Effect – Have you seen those young boys or men who love wearing a cap backwards. They want to demonstrate how different they are, by being the same. They follow the leader. The same effect happens when you give visible buying instructions to a group. Meaning when you say, “if you want one of the thirty remaining spots go to the table in the back of the room right now.”
When you get good at selling to groups you can make significantly more per hour.
5. Use email marketing well - It might surprise you that email marketing is still one of the most effective tools you can use to win customers. Surprise you because we flick aside most of the constant stream of emails we find in our Inbox. But if you research the experts, and I do, you’ll find the opinions are to the contrary.
Now I know you’ll worry that you will lose your list if you send “too many” emails. Don’t – I addressed this fear in “How many emails are too many”.
Research tells us that email marketing is still the number one way for businesses to communicate directly with customers.
But you have to do it well. We all suffer from too many emails in our Inbox. It’s a competitive world, so your email needs to capture attention, and hold it. Too many people just whip out an email without working on an attention grabbing subject line, an opening paragraph that draws the reader in, and a compelling message that leads to action.
And then there is the sequence; one email is unlikely to get the result you need when you are trying to make a sale. I used a three-email sequence.
So learn the fundamentals of crafting compelling sales emails. Poor email messages will alienate your list—sometimes permanently.
6. Resurrect the dead - Have a resurrection campaign to restore ‘dead’ customers; previously good customers who have inexplicably dropped off the perch. Bring the dead back to life; this may involve gifts or special offers. It should acknowledge that they haven’t used you for a little while, or that maybe you have done something that discouraged them. Apologise and what you can do to repair the relationship. Give them a reason to come back.
And when they do return, send them a personal thank you note afterwards to remind them that they are valued customers.
7. The road to success is paved with good information. So often in a business you can’t see the way ahead because of the fog around you, a lack of illumination on what is happening in your business, as I wrote recently.
Good information disperses the fog, and gives you a clear view of your world.
We don’t necessarily have a clear view of what is happening. Pave the road to success with good information, and you won’t be fog-bound
Doing one of these things will increase your income. Doing all of them could make a tremendous impact. Pick one or two to start and once you’ve implemented them, move on to another one (or two) on the list.
There’s Nothing Wrong with Asking for Help
When clients approach me for coaching, I find they are almost always a business with a problem, a problem that if not fixed, will see them go out of business.
They usually have “business”, although frequently not enough, but often it is the wrong business, less than profitable business.
Often they lack a management mindset, and lack control over their business. Eight times out of ten that lack of control comes down to a lack of knowledge of what is happening in the business.
Not knowing how to write emails that sell is another factor.
For more than 28 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand the information they need to have control over their business, how to manage and analyse it, and how to answer that critical question – WHY IS IT SO?
If you would like to discuss with me how you might do that, book a Strategy Consult here.
© Copyright 2016 Adam Gordon, The Profits Leak Detective