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7 Strategic Moves That Boost Your Profits
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Work smarter, not harder, by making small but
significant shifts in the way you do business.
Simple adjustments, clearheaded analysis and two
minutes here and there may be all it takes to
boost your bottom line. Carefully consider these
options, and you should be able to implement at
least one or two of them right away.
1. Drop your least profitable offerings and
concentrate on your most profitable ones. Note
that I said "profitable" - not those
bringing in the most or least money overall. You
can sort your products and services by their
profitability if you analyze your expenses
according to which sources of revenue they
support. "Most small business owners lose
sight of precisely where they are making money and
where they're not," says David Shepherd,
author of the book, Your Business or Your Life. By
getting rid of the offerings that require the
highest percentage of costs in order to deliver
them, you can see immediate improvement in
profits, says Shepherd.
2. Send "difficult" clients or those you
simply don't like to your competitors. In a survey
by David Maister, a consultant for top
professional firms around the world, only 30-35
percent of respondents said they liked their
clients; 50-60 percent said they tolerated their
clients; and 5-20 percent didn't like them at all.
"Why spend the majority of [your] life
working on tolerable stuff for acceptable clients
when, with some effort in (for example) client
relations, marketing and selling, you can spend
your days working on exciting things for
interesting people?" asks Maister. You'll
feel more enthusiastic about your work and get
more done when you send unpleasant or troublesome
clients to get their needs met elsewhere.
3. Pursue customers who can or will pay more. A
consultant once told me that she'd come to the
conclusion that people starting a small business
simply wouldn't pay the fees she felt she should
charge. I didn't agree, because I'd had clients
ready to spend big on launching their new
business. They were in their forties and fifties
and either had a budget to spend from a company
that was laying them off, or they were willing to
raid the retirement fund they'd accumulated
working for a large corporation. It would be
possible to target others like them and make
multiples of what she'd be earning from those just
scraping by, but I think she just didn't believe
what I was saying. Almost always, your existing
market includes people who have more money or are
willing to spend more of what they have for your
stuff, and by marketing to people like them, you
earn more for the same effort.
4. Reuse everything you create in different
formats or for different purposes. If you've
taught a seminar, turn your handouts into an
article (that's how what you're reading came
about). If you collected industry data to direct
your marketing, sell your research to colleagues.
If you regularly interview experts about what's
new in the field, incorporate their insights into
a product. And so on. "Do once, sell three
times" is a shrewd money-making mantra.
5. Create an untiring army of sales reps through
an affiliate program. Colleagues who don't have
their own products or services, or whose offerings
complement yours may be happy to promote your
wares in exchange for a commission on the business
that they refer. On the Internet, so-called
affiliate programs make that process easy. You
decide on the terms, find marketing partners who
agree to them and give those partners a link to
use that keeps track of leads or sales coming
through that link. I use FusionQuest.com for my
affiliate program because unlike most such
services, they themselves take no commissions from
sales coming through the program.
6. Cultivate and reward your referral partners.
Two ordinary words work magic when it comes to
nurturing relationships with people who regularly
send you business: "Thank you." If they
send you sales with a particularly high value, a
gift, such as a book, a fruit basket or tickets to
a show might be appropriate. How do you initiate
such relationships in the first place? This can be
as simple as inviting professionals out to lunch
and asking them what they do so that you can refer
business to them. Only an idiot would not
reciprocate by turning the same question back to
you.
7. Invest more to get customers who have a high
lifetime value. Keep in mind that when done
properly, marketing is not an expense but an
investment. Correspondingly, you need to know how
much you can afford to invest to acquire a
customer. The smart way to think about this
question is not in terms of an amount for your
marketing budget that you think sounds reasonable
but in relation to how much you can earn during
the whole time someone remains your customer. For
instance, spending $100 to lure each new customer
may sound outrageous until you realize that each
one spends $4,000-5,000 with you over the course
of three years. With that profile, it might be
smart to spend much more than $100 per customer to
lure them into your fold.
Why slave away doing things the way you've always
done them when you can earn more by using some of
these strategies? Please let me know when you try
any of these moves, with extraordinary results!
Marcia Yudkin marcia@yudkin.com
is the author of 6 Steps to Free Publicity and 10
other books. She runs a private member site,
MarketingforMore.com, which supports business
owners who are growing their businesses. Learn how
to avoid the most common pricing mistakes in her
free report, "Charge More & Get It,"
available from http://www.marketingformore.com/survey.htm
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