If you’re looking to improve profit, are there really only four ways to do it?
There may be 101 things you can do in your business to change your profits, but they all boil down to four main categories:
- Number of customers
- How often they buy from you
- How much they buy when they come
- Systems integration and processes
Number of Customers
This is the one that most business owners think of first. “If I could just make a few more sales,” we say. “If I got more traffic to my website, I’d get some more leads and turn those into more business!” And our thinking starts spiralling on until we’re sitting in front of our computer, daydreaming of the money that will soon be flowing in.
But it’s not just about increasing the number of customers. Any company that experiences exponential growth suddenly has new issues to consider – are the customers happy? Will they stay? Will they return, and buy more? Will they recommend the business to their friends? Will the revenues – and profits – last?
Just a few of the things you’ll want to consider during your profit daydream will be:
– What kind of customers do you want? It’s not enough just to get ‘more’. Are you getting more of the kind that stay with you the longest? Appreciate what you have to offer? Trust you enough to refer you to others? We’ve all experienced the kind of customer who takes so much effort to deal with that we wish they would have left well enough alone – or that we would have.
– What do you offer that is what the customer really wants and needs? Consider the three main areas that the potential customer wants to save: time, money, and bother. Are you helping them save on any (or some combination) of these?
How Often They Buy From You
We’ve all heard the statistic that it costs six times more to gain a new customer than it does to get an existing customer to make another purchase. So, why is it that we spend most of our time and efforts going after the new business, when there’s so much already at hand?
– The new business is more exciting. We get a rush when someone signs up, or tells us that we are so amazing compared to the last company they dealt with. We feel good. We’re on top of the world. We’re going to make their life amazing. And the customer who has been with us for months, or years, is on the phone again…and we avoid the call because we think we know what they’re going to say.
– We genuinely don’t believe we can get more business from our existing customers. “They have everything they need,” we tell ourselves. “Last time I asked them, they said they didn’t need anything else.” But when was that last time? And how specific were you about discovering what their needs are? One of the primary reasons people leave you is because they feel like you don’t care anymore. Don’t tell yourself that every customer you have is perfectly happy unless you know that for a fact.
How Much They Buy When They Come
Getting a new customer in the door is a start – and a great one. But now that they’re in, how do you ensure that they spend that little bit extra which will make all the difference to your bottom line?
Consider some of these issues:
– How easy is it to buy from you? Are there several different pages to click through on your website? Do they have to search around to find what they’re looking for? Or does the client have to fill in actual paperwork, and send it to you in the post? Can you streamline your process so that when the customer is ready to spend, you’re ready to receive?
– Have you considered what your most profitable products are? So many companies think they know what makes them the most money, but when they look at the actual numbers, they get a shock. Know what you should be selling more of, and then make it easy for people to buy.
Systems Integration and Processes
This is the area that is so often left to gather dust – in the mind, in the business, and on the shelf. We know that if everything we’re planning is to come off, it has to smoothly integrate together. But it’s such hard work we put it off – and the months go by and the years go by, and suddenly ten years have passed, and we still haven’t upgraded our CRM system.
Think about these things:
– What system have you purchased in the last several years and never implemented?
– What information do you need to gather, to find out where you can best spend your resources in this area?
– What would you change in your existing systems or processes, today, if you could?
– Is there someone in the company who has expressed an interest in changing even one system for the better? Why not let them?
We’ve gone through many of these issues ourselves – and we’ve learned that there are hundreds, thousands of little things that work (and things that don’t). But if you’re going to improve your profits, these four areas are the place to start.
We’ll be discussing these four ways in our upcoming Business Builder webinar. If you have time, please join us!