1 Big Way To Create A Clear, Compelling And Irresistible Reason For Your Prospects And Customers To Do Business With You, And Not Your Competitors.

1 Jun

1 Big Way To Create A Clear, Compelling And Irresistible Reason For Your Prospects And Customers To Do Business With You, And Not Your Competitors

 

Finally, the fifth principle for growing a business… Create Compelling Reasons For Your Customers To Only Do Business With You.

Here’s a simple test you can perform: Ask any business owner, any manager, any entrepreneur or any professional why their prospects or customers should buy from them, and you’ll most likely hear something like, “Because we offer the highest quality products, the best service, the fastest delivery and the lowest prices around.”

But really, what do you learn from that kind of statement? That kind of answer does absolutely nothing to compel you to want to know more, or to nearly force you to get out of your chair, pick up the phone and call, or to get in your car and drive to the place of business, or to fill out and mail in a response card.

In fact, just the opposite. You’ve heard this kind of “ho-hum” statement so many times before by countless other businesses, that you no longer pay any attention to such statements.

Competition in business today is so keen, products and services are so similar, and prices are so cutthroat, that it’s difficult, in fact nearly impossible in almost any industry, business or profession, to maintain for any predictable length of time, a competitive advantage because of the products or services a business offers, or the prices they charge.

The simple truth is, that if you can’t give your prospects and customers clear and compelling reasons to do business with you, you can never expect for your business to be any better than any of your competition. And you’ll just be another “me-too” business – at least in the eyes of your customers. And since they’re the one’s with the money, that’s the only place that matters.

To be competitive in the marketplace today, you must differentiate yourself and your business from any and all other options your prospects and customers have to choose from. In effect, you’ve got to stand out not only as the most logical choice for your customers to buy from, but the only choice they have.

That differentiating factor has to be as clear and compelling as FedEx’s, “When it absolutely, positively has to get there overnight” was for them. There was no question in the minds of the buying public that when something was so important or urgent that it had to be delivered the next day, that the only one who could get it there was FedEx. No, not the Post Office, not anyone.

Coming up with your own unique differentiating factor – that one thing that no one else can offer, or that preempts anyone else who markets the same products or services as you, is critical. And when you can articulate it in such a way as to capture a unique position in the minds of your prospects and customers, you will gain a very competitive edge, and your competition won’t stand a chance.

 

 

1 Powerful Way To Determine And Ethically Exploit The Lifetime Value Of The Business’ Customers.

31 May

1 Powerful Way To Determine And Ethically Exploit The Lifetime Value Of The Business’ Customers

 

Let’s look at the fourth principle for growing your business… Ethically Exploit The Lifetime Value Of your Customers.

The Lifetime Value of a customer is one of the most valuable things you as a business owner can know. It is simply a calculation or determination of how much (in dollars) each of your customers is worth to you.

The reason this calculation is so critical, is that by knowing what the value of an average customer is, you can then determine how much you can afford to spend to acquire a new customer, as well as how much you can afford to spend to keep an existing customer from leaving you and purchasing from a competitor.

Lifetime Value can be determined a couple of different ways. To get the Gross Lifetime Value you calculate:

  • The average purchase amount…
  • Multiplied by the average number of times a customers buys per year…
  • Multiplied by the average number of the customer continues to buy…
  • Plus, the monetary value of their referrals.

This gives you the total worth or Gross Lifetime Value of each customer.

Another way to determine the value of a customer to your business is to compute the Lifetime Profit Value. This differs from the Gross Lifetime Value, in that this computation figures the amount of profit each customer is worth to your business. This is determined in much the same way as above, but with one additional step:

  • The average purchase amount…
  • Multiplied by the average number of times a customer buys per year…
  • Minus product acquisition or production costs, fulfillment and delivery costs, sales commissions, bonuses and salaries, advertising and marketing costs, and other overhead expenses.
  • Multiplied by the average number of years the customer continues to buy…
  • Plus, the monetary value of their referrals.

This gives you the total profit value of each customer. There’s value in doing both types of calculations for your consulting clients. When initially demonstrating the concept of Lifetime Value it may be easier and quicker to figure Gross Lifetime Value. But when doing calculations for the purpose of developing actual marketing strategies and campaigns, the Lifetime Profit Value will give a more accurate picture.

 

5 Ways To Increase The Efficiency Of The Business Operation And Its Margins.

30 May

5 Ways To Increase The Efficiency Of The Business Operation And Its Margins


The third principle for growing a business, is to Increase The Efficiency Of Your Business.

This is probably one of the most overlooked areas to building and sustaining a profitable business. Yet, it has so much potential for making a positive impact on your bottom line.

 

1. Control Or Reduce Expenses.

Getting a handle on where your money is going is critical. Most businesses have an incredible amount of waste, not only in actual money lost, but in human capital – lost or wasted time by their employees and staff. You need to keep a very tight reign over any expenditures, and money should only be spent after careful consideration and analysis as to how it will contribute to your bottom line profits.

One of the biggest money wasters is the area of advertising and marketing. Careful testing of ads and promotions should be carried out in small runs before “rolling out” to your entire list or to the marketplace. Direct response ads with enticing and compelling offers should always be used in place of more traditional image or institutional ads. When you consider how much it “costs” to bring in a dollar of actual profit and then see how easy it is to spend that money and not get a positive return, it’s not hard to see why so many businesses have a difficult time showing a positive balance at the end of the year.

 

2. Increase Profit Margins.

Profit margins are the difference between what the product or service you offer costs you to make, produce, purchase, or acquire, versus what you sell it for, and after deducting sales, processing, fulfillment, and delivery costs. The more steps there are in the process from production or acquisition to delivery, the more room there is for excess costs to creep in, and the lower the profit margin will be. Every effort should be made to monitor, control and slash costs whenever possible. Remember, a simple two dollar saving on a twenty dollar product can add up to 20 percent more profit for your business.

 

3. Manage Time More Effectively.

Every person on the face of the earth has exactly the same number of hours, minutes and seconds in their day – every day. No one has an advantage in this area. It’s true that we all have different jobs, tasks, priorities, and responsibilities, and those all require different amounts of our time, but you can significantly increase your available time if you will take stock of where you are, what you’re spending your time on, and then effectively employ the principle of delegation.

By concentrating on things that matter most, or that only you can do, and then delegating the lesser important tasks to the lowest competency level person that can handle them, you’ll have more time to focus on the important priorities – the things that can make you real money.

 

4. Increase Staff’s Knowledge And Competence.

How many times have you called a business and asked a question, only to have the person on the other end of the phone act like they had no idea of what you were talking about or where to get the answer? It happens all the time. Unfortunately, with today’s labour laws it’s much more difficult to get rid of incompetent, rude or uncaring employees without the threat of lawsuits or other problems.

Knowing how to hire the right employees is becoming more critical, as well as how they’re trained to handle different situations that come up in your business. It’s surprising how few businesses have regular staff or employee training meetings. And for those who do, most of their meetings have to do with administrative duties, and are “reactive” in their approach. By changing your focus and conducting “proactive” meetings – how to deal with certain situations, sell more effectively, show interest in customers, and so on., will do a lot to not only improve your company’s image, but will also be a contributing factor to your profitability.

 

5. Create A teamwork Approach.

You cannot afford to run your businesses with a “super star” mentality. Just as in any team sport, to be truly effective, it takes the entire team to make a company run smoothly and efficiently. Want to know how to make your company more responsive to the needs of your customers? Hold a team meeting. Invite people from every department – sales, manufacturing, accounting, fulfillment, delivery, even janitorial. Have a brainstorming session and get every idea possible on the table. Don’t be judgmental. Get them all out. Then go through each idea and discuss how it can be used to more fully satisfy the needs of your customers. Sometimes the best ideas come from those you’d least expect.

 

 

5 Ways To Generate More Income From Existing Customers.

29 May

5 Ways To Generate More  Income From Existing Customers

The second principle for growing a business, is to Generate More Income From Your Existing Customers.

This category has the potential to add more profitability to your bottom line faster, easier and more cost effectively than any other method. You should pay very careful attention to each of the following sub categories.

 

1. Increase The Value Of Each Sale.

Getting more money from each sale, or increasing the average transactional value of each sale – that is, getting more money from every purchase your customers make has the potential to add an immediate 30 to 40 percent in pure profits to your bottom line. Using this technique, and making a simple suggestion, fast food restaurants add millions in profits to their coffers every day. They use the strategies of:

Up-selling – not selling anything additional – just offering a larger size or more of the same item the customer is already purchasing. Super-sizing a drink or an order is an example of Up-selling.

Cross-selling, or suggesting that your customer buys an additional item that they didn’t intend to purchase, is another effective way to increase the size of the order. Asking if a customer wants fries with their hamburger and drink is an example of how a fast food restaurant uses this technique.

Packaging, bundling, or combining several items together and giving a discounted price is another way to get your customers to spend just a little more and get a better value. Happy meals or Value meals are an example of this technique.

Each of these techniques only adds a little more to the total cost of the meal, and aside from the actual hard costs of the additional products, that “little more” is pure profit since there are no advertising, marketing or acquisition costs involved.

 

2. Sell More Products And Services.

The goal of every business should be to make sure their customers are getting the maximum value, use, enjoyment, benefit, and satisfaction from the products and services they purchase from them. If your business has additional products or services that would help your customers increase the benefits they derive from their original purchase, you have an obligation to your customers to make those products or services available to them.

If you don’t have anything additional that you can make available to them, you could easily look outside your company to other businesses who offer products or services that are complimentary, but not competing, and that would enhance the value of the original purchase, and work out joint venture arrangements to make those products available to your customers.

 

3. Increase The Number Of Times Customers Purchase.

Too many businesses operate with a one-time sale mentality. They give very little thought to repeat sales or back-end purchases. But that is where the real money is. It’s not uncommon for a business to lose money or barely break even on the initial sale. And it oftentimes takes several repurchases before any real money is made.

 

4. Establish And Maintain A Segmented Database.

One of the most effective ways to increase sales is by having an up to date, clean and segmented database of all your customers – past, present and future customers – your prospects. When you keep track of your customers and what they’ve purchased in the past, and then see that they are informed of special sales and offers, special events, and new items, and discounts and promotions on items they would be interested in, shows them that you care about them, and encourages them to make additional, often more profitable purchases.

 

5. Increase The Average Buying Lifetime Of Each Customer.

It just makes sense that the longer a customer continues to do business with you, the more products and services you’ll have the opportunity to sell that customer, which of course, translates into more profits.

But also, the longer that customer keeps coming back and buying from you, the more benefits they’ll receive from the products and services they’ve purchased, which leads to a more satisfied customer, and again, means more profits to you.

For example’s sake, let’s say your average customer trades with you for a period of five years before moving on to do business with another company, or no longer needs the product or service your business offers.

If that five years could be extended by just one year, it would mean an increase in profits of 20 percent – even if nothing else changed. Actually, it would be somewhat more than 20 percent, because there were no acquisition costs for that extra year like there was for the first year the customer did business with you.

And naturally, the longer the customer’s buying lifetime with you, the more chances you’ll have of getting referrals of others who can use and benefit from the products and services you sell.

 

7 Ways To Increase The Number Of Customers Your Business Has

28 May

7 Ways To Increase The Number Of Customers Your Business Has.

Let’s take a look at the first principle of growing a business… Increase The Number Of Customers.

Ask nearly any business owner what they would like to have more of and most likely you’ll get an answer somewhere along the lines of, “more customers.”

There’s no denying that customers are very important to any business. Without an adequate number of people purchasing the goods and services sold by a business, there wouldn’t be any need for the business, and they would soon be out of business.

But getting customers begins with having someone to tell a sales story to – a prospect – a lead – and then converting those leads into buying and profitable customers and then keeping them from leaving and buying from the competition. Here are some ideas you can use:

1. Get More Leads.

That is find ways to get in front of more prospects to tell your sales story to. There are a number of lead generation devices that can do this very effectively, from direct mail or telemarketing campaigns, to paid advertising or free publicity, to joint ventures and host-beneficiary relationships, just to name a few.

2. Increase Your Conversion Ratio.

 

This is the converting of interested prospects into paying customers. You do this by getting better at what you do. You develop your sales skills, your word tracks and your scripts. And you can even upgrade or attract a better quality of prospects who would be more likely to buy from you.

3. Reduce Customer Defections.

That is, close the back door – don’t let existing customers slip away to do business with the competition. Statistically, for every five percent increase in customer retention, a business can generate a 30 to 40 percent increase in profitability over a 12 to 16 month period. Since most businesses lose around 19 percent of their customers each year, only 81 percent are left. But if that number were to increase to 86 percent your business would enjoy a 30 to 40 percent increase in profitability.

Remember that it costs six to eight times more to get a new customer than it does to keep an existing one, and it’s 16 times easier to sell to an existing customer than to a new one. So when you compare the acquisition costs for getting new customers to like you, know you, trust you, and buy from you the first time, versus getting your existing customers to repurchase from you, the cost-to-sale difference is significantly different.

4. Increase The Number Of Referrals

Getting new customers through referrals is one of the most cost effective methods there is for growing a business. Referrals from good customers are much easier to sell to because they’re already somewhat “pre-sold.” With conventional advertising it takes a certain amount of valuable time to create credibility and trustworthiness in the minds of prospects. But when a prospect comes as a result of a referral, that credibility and trustworthiness has already been established by the one who referred them.

5. Establish Referral Reward Programs.

Make it worthwhile for your customers who take the time and make the effort to tell others about the benefits of doing business with you can do a lot to bolster the number of referrals you get.

Simple things like movie passes, restaurant gift certificates, car washes, manicures, or samples of some of the additional products or services you provide make good choices. The reward for a referral should be perceived as high value to your customer, but low cost to you.

6. Reactivate Former Customers.

Every company, including yours, has former customers – those who used to do business with them but for one reason or another have stopped and are now doing business with a competitor, or maybe not even using your products or services any longer.

It’s often much easier and less expensive to sell something to someone who has done business with you in the past – someone who has already experienced the service, quality, convenience, terms, and relationship you have to offer, than it is to create a completely new customer and build that trust and credibility from ground zero.

7. Establish Joint Venture Arrangements.

Work together in mutually beneficial arrangements with  your centres of influence.  Find people or companies who have already spent considerable time, effort and money establishing and building relationships with customers who are of the same buying profile as the customers you are targeting. Then work out reciprocal arrangements with those business to refer, endorse or suggest that their customers consider certain products or services offered by your company.

 

19 Secrets to Immediate and Exponential Business Growth

27 May

19 Secrets to Immediate and Exponential Business Growth

Have you ever wondered what the difference is between a business that consistently and predictably realises extraordinary growth and another business that struggles just to make ends meet?

Or why a business that was started in a garage or basement of a home and run by the seat of its pants, can out perform in sales and profits, some of the best run companies?

Or take two businesses that operate in the same marketing arena. They both sell the exact same products or the same services for the exact same prices. Why can one business continually grow and prosper, while the business owner spends a good portion of his or her time away from the business on trips and vacations with their family, and the other owner spends an inordinate amount of time working harder and longer hours just trying to pay the bills and never taking any time off?

In the blog posts that follow over the next few days, you’re going to learn a handful of practical ideas (19 in total) that have worked for some of the world’s largest and most prestigious businesses, and that will work for you in your business, as well. Ideas and strategies that you can begin to use immediately to quickly and easily take your business to the next level and begin adding profits to your business’ bottom line.

There’s no reason you can’t improve your business or increase your profits as long as you adhere to four fundamental principles

1. First, you must have a product or service that is beneficial to those who buy it.

2. Second, your product or service must be wanted or needed by the end user.

3. Third, you must effectively make your prospects aware of the availability of your product or service.

4. And fourth, you must make your prospects an offer that is enticing, compelling and in their best interest to purchase your product or service.

The first two areas – having a beneficial product or service that your prospects want or need, are areas that you’re going to have in place, or are going to have to develop.

The third and fourth principles – letting your prospects know about what you have to offer and then compelling them to buy from you, is where the following ideas can be of enormous assistance to you.

So if you haven’t subscribed to this blog yet, do so right away so you don’t miss any of the postings revealing some of the most fundamental secrets to business success (its free, and you can unsubscribe anytime), and let’s dig in.

When you get right down to it, there are really five basic ways any company, any association, or any organisation can increase its business.

  • First, a business can increase the number of new customers they have.
  • Second, they can generate more income from their existing customers.
  • Third, they can increase the efficiency of their operation, cut their expenses and improve their margins.
  • Fourth, they can determine and then ethically exploit the Lifetime Value of their customers.
  • And finally, they can create a clear, compelling and irresistible reason for their prospects and customers to do business with them, and not their competitors.

Each one of these categories on its own has enormous potential to dramatically affect the bottom line profits of your organization, but if you combine two or more of them, they can have a synergistic effect, and the results will be exponential!

In the next post, we’ll take a look at the first principle of growing a business… Increase The Number Of Customers.

 

 

Marketing Mistake #20

22 May

Marketing Mistake #20

Not Using A Risk Reversal

 

Suppose a customer is not happy with a purchase they made from you.

What do you do? Do you make them keep the item? Do you give them their money back? Do you an “in-store credit?” How should it be handled? How do you handle it?

All the major stores offer money-back guarantees. And there’s good reason. Remember our discussion on the Cost of Losing a Customer?

If you fail to give someone their money back, you haven’t just lost one customer; you’ve lost a bunch of them.

People don’t hesitate to talk about the bad service they received or the “rip-off” they got from a business. In fact, they’ll talk more about the one bad experience to more people than they will about all the good service and good deals they got from the business.

In many cases, if you cheerfully and unhesitatingly offer to give money back to a customer who is dissatisfied, they’ll end up spending that same amount of money, often more, with you again. And, they’ll tell others about what a good attitude you had and what a pleasure it is to do business with you.

Any time a selling situation exists, someone is being asked to take a risk. Either the buyer is taking the risk, or the seller is.

If you, as a business owner are willing to shoulder the entire amount of the risk, that is, offer a complete 100 percent money-back guarantee, you’ll make a significantly greater amount of sales.

Look at it this way:

If a potential buyer knows that if they purchase a certain item and they are unsatisfied with it in any way, that they can return it, more of those potential buyers will be willing to take a chance. On the other hand, if they knew they would be “stuck” with whatever it is that they purchased, there would be more hesitation, more resistance and more reluctance.

“But,” you say, “If I give a money-back guarantee, people will take advantage of me, and I’ll lose money.”

Yes, it’s true. Some people will take advantage of you, and you will lose some money… on those people. (Maybe!).

As far as the “(Maybe)” part, remember that how you give the money back has a lot to do with your attitude.

And remember, that some, in fact the majority of those people will turn around and spend that money with you again… and will tell their friends.

But, most people are honest. And most won’t try to rip you off. In fact, more people will be inclined to buy from you because of the guarantee than would buy from you if there were no guarantee.

Sure, you’ll get a few returns. But the additional purchases you make will more than offset any dollars you lose because of the returns.

 

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