How to Double Your Profits within 12 to 18 Months
By bpjames | June 12, 2009
Most people in business would expect a doubling of profits to require a major transformation in your customer base and how you transact business. This doesn’t have to be the case. You can multiply your results by creating a series of small improvements across a range of areas.
In less than two years you can produce startling results by focussing on the key profit factors within your business and making incremental improvements to each of them. The compounding effect of these improvements has almost limitless potential.
Take the example in the table below. This represents a case study of a typical small business throughout an annual period. The figures demonstrate how the bottom-line profitability is more than doubled over the course of a year with just a 10% improvement across a range of areas:
|
Element |
Now |
Future (10% improvement) |
| Number of leads generated |
333 |
366 |
| Percentage of conversions |
60% |
66% |
| Number of customers |
200 |
242 |
| Number of purchases |
3 |
3.3 |
| Average value of purchases |
£420 |
£462 |
| Total sales |
£251,748 |
£368,584 |
| Percentage costs |
85% |
76.5% |
| Profit |
£37,762 |
£86,617 |
I would suggest you replace the figures in the table with those based on your business over the past year - then, examine the effect on your profitability of a 10% improvement in each element. You may be pleasantly surprised at the result. Ultimately, it’s extra profits that are going to put more cash in your pocket!
It is quite likely for your business, making improvements in some areas is more practical than others. So you will want to select those elements to work with capable of producing the best results.
The beauty of the incremental approach to business improvement is that as well as being achievable it is also highly believable. It’s the believability factor that is often the biggest barrier to success.
Once you have determined the key elements of focus for improvement, I would recommend you review your marketing budget for the coming year. You want to be able to allocate sufficient cash to carry out the required activities.
The best way to set your budget is to make it activity based. In other words, decide what marketing activities you plan to carry out and then examine the cost of these activities. For example, with online marketing you might want to allocate a certain amount to your website development, some for email marketing and the rest for Pay Per Click advertising.
When you examine the amount you have spent in the previous year, try and cut out wasteful activities in future. You can only carry out this exercise if you know what activities are producing which results - so make sure you are tracking each activity.
One of the most wasteful forms of marketing in my experience is poorly targeted and ineffective printed advertising. You should be spending no more than 15% of your total marketing budget in this area alone.
You may be able to reduce the cost of sales by negotiating additional discounts with suppliers, particularly if your volumes are increasing. It’s worth reviewing how quickly cash is flowing in to your business. Perhaps you could reduce your payment terms for new customers and actively chase up outstanding payments with existing customers.
Consider ways to contain your overhead costs. The largest overheads are usually related to premises and staff costs. Do you have more space than you really need? Could you outsource some duties rather than employing extra staff?
Minimise your risks by making sure the cash is there when you need it. Cash forecasting is essential. Continue to test and refine all your marketing activities to get them working better for you. Always be prepared to try new marketing methods and approaches. Until you try them, you won’t know what works best. Your next million or multimillion discovery could be just around the corner!
Brian.
Topics: Profitability | No Comments »
Your Website - An Essential Marketing Tool
By bpjames | May 26, 2009
Customer demands and needs are increasing to the extent that instant gratification seems no longer fast enough! There is now an expectation for even the smallest of businesses to have a web presence and it has become an essential “must have” for all businesses.
There are many advantages and benefits of using the Internet as an active marketing tool. As a business owner, even if you have no interest in the Internet, you at least want to have an information site which is effectively an electronic leaflet.
With its global reach, instant access and interactivity it can become a highly proactive and effective sales tool. Through the Internet you are able to have a global presence, display a corporate image and build credibility with customers and targeted prospects alike.
Let’s consider the main reasons people go online. Generally they are information seeking. Apart f
rom regular home shopping and book/CD purchases, most people are searching for information and are not necessarily ready to buy. We can meet this need by ensuring our web site is full of useful information and education.
This can be achieved with a sign-up box to receive free downloadable documents containing newsletters, white papers, thought papers, reports, fact sheets and buyers guides. These should be designed as an independent study of the buying factors and considerations required to make an intelligent buying decision.
The beauty of this approach is that it enables you to add value to a potential purchaser without them having to make a commitment to buy. By giving worthwhile information you can become the only natural choice provider. You are also able to gain names and email addresses to build your opt-in list and enquiry database.
The general design of your site wants to be clean and simple to use. The Home page and each of the top level pages want to contain interest arousing and benefit oriented headline statements to capture attention and gain interest from browsers. You only have a few seconds to achieve these aims. The top level pages need to contain “benefit summaries” of your products and services with a click-through for more detail.
Overall your site needs to contain a comprehensive list of your products and services, brief information about your business and expertise and a means of contacting you. It is best to restrict the contact details you request to a bare minimum as people are hesitant to give personal details. For example, email address, name and possibly a telephone number is sufficient for a new enquiry.
Make sure you keep your product and service information up to date. I would recommend keeping graphics and photography simple and being very selective with use of colour. It is very easy and tempting to go way overboard with colour and graphics.
Where possible use multi-media information. For example include a click through to visual presentations, audio recordings and video snapshots. This enables browsers to choose their preferred communication method to receive information.
I would recommend you seek specialist advice from a reliable Internet Consultant for the development of your site. This will enable you to take advantage of e-commerce options, search engine optimisation and email marketing.
Some of the best aspects of email marketing are its low-cost and instant contact/response. Electronic Newsletters or E-Zines are a very effective way of keeping existing customers informed and up to date. For email marketing you want to have the tools available to manage open rates, click throughs, opt-outs and bounce backs.
Brian.
Topics: Customer acquisition, Customer development, Email marketing | No Comments »
Test Your Marketing Capability
By bpjames | April 28, 2009
Have you taken the Marketing MOT test to see if your marketing is up to scratch?
Take the Marketing Operations Test (MOT) for your business and discover your marketing capability. Check how well your marketing is working for you and whether there’s scope for improvement.
Gain insights into your marketing effectiveness. What could you be doing to generate more leads, increase sales and produce greater profits? Take the test now - it’s free and only takes a few minutes to complete.
You will receive your test results by email within 24 hours.
Take the MOT test now at http://www.surveymonkey.com/s.aspx?sm=_2bKercofUiFD_2fNZfiitPkBA_3d_3d
Brian.
P.S. Make sure you include your name and email address so we can provide your results. Take the test now at http://www.surveymonkey.com/s.aspx?sm=_2bKercofUiFD_2fNZfiitPkBA_3d_3d
Topics: Customer acquisition, Customer development, Profitability | 1 Comment »
The 6 Key Differentiators of Your Business Proposition
By bpjames | April 24, 2009
You can attract more leads and convert them in greater numbers to worthwhile sales by clearly differentiating your business proposition. This specific combination of compelling elements is often referred to as a Unique Selling Proposition or USP.
Here are the 6 key aspects that can be combined to form your uniqueness:
- Price competitiveness
- Quality of product or service
- Turnaround times
- Convenience
- Level of service
- Opportunity (How people benefit as a bi-product. E.g. Time saving)
Ideally the customer would like the best of everything. Unfortunately it is not viable to have each of these elements in abundance and in reality there is a trade-off between them. Some of them are mutually exclusive. For example, you can’t produce the best quality product at the cheapest possible price - it’s just not feasible.
You therefore need to choose your unique combination of these elements based on the capability, skills, knowledge and preferences of you and your team. Let’s take a computer consumables business as an example. This business acts as a reseller for essential computer supplies such as fax toners and printer ink cartridges. It supplies original and remanufactured cartridges from a wide range of manufacturers.
They excel in their marketplace by providing very fast turnaround times on a wide range of consumable products. They are very experienced and knowledgeable and are able to offer helpful advice and support to their customers. They are certainly not the cheapest although their customers receive good value for money.
Their important values are reliability, consistency and dependability. They have developed a loyal customer base over several years. Their ideal customers require regular, ongoing and frequent supplies combined with fast and accurate delivery with a speedy no-quibble returns policy. They reward their best customers through a loyalty voucher scheme.
All their sales messages are designed to attract the right kind of leads from people who appreciate convenience, fast turnaround times and great service. They don’t want to encourage those people who are constantly shopping around looking for the cheapest deal or have a low volume requirement - as this is not their marketplace.
You can duplicate this with your business by understanding the exact combination of elements that apply to you and form your unique proposition. By connecting the appropriate messages with the relevant group of prospects you will maximise your conversions and generate worthwhile sales.
This is the essence of the TripleM marketing method as shown in the following diagram.
This comprises a 3 stage process. Firstly you want to clearly identify and differentiate your proposition. Secondly you want to identify the ideal customer profile suited to your proposition and lastly to connect them using targeted messages through multiple methods of direct communication. This might include face to face, telephone, email, letter and SMS text messaging as appropriate.
By using these methods you will attract more of the right types of prospects and convert many of them to long lasting and profitable customer relationships over several years.
Brian.
Topics: Customer acquisition | 2 Comments »
Make Your Advertising Work for You
By bpjames | March 27, 2009
Done well, printed advertising can launch your business into a period of explosive growth. Done poorly, printed advertising can be one of the most wasteful and risky forms of marketing activity. Laser-like targeting and messaging with irresistible appeal are two crucial elements.Many businesses advertise locally in Yellow Pages which represents a significant and long-term investment in one source.
To maximise your return on investment I would recommend carrying out smaller tests first in local publications. Just like all forms of marketing it is best to start small and build up as responses increase and demonstrates the capability of generating gross margin for your business. You can increase size and coverage over time beginning with classified lineage in local publications and building up to full page display adverts in the national press. This requires to be managed on a carefully controlled basis by moving progressively up the scale over time, each time testing and refining as you measure the responses.
While there is no magic formula there are universal principles that can be applied. For example the headline statement is the most influential determinant of success.
As far as targeting is concerned, understanding the interests of your potential buyers is essential. Groups of potential customers are to be found in affinity and trade magazines in addition to the local and regional press. For example, an office refurbishment business would find groups of targeted prospects in a Facilities Manager magazine or newsletter.
Your headline needs to ensure you attract attention by offering a striking initial appeal. In Yellow Pages for example, where competitors are advertising alongside each other, you want to stand out as being different. Make the headline prominent, taking up to a third of the available space and pack it with customer oriented benefits.
You can quickly build on the interest by creating believability with third party endorsements, independent studies and existing customer testimonial statements. You can create desire by using the five senses to describe how their lives will be enriched by owning your product or service and why they can’t live without it. Focus on the results you can achieve for people.
An appeal I have found works well is encouraging potential buyers to enquire without cost, risk or obligation. For example, you can make free reports, audio recordings and video materials available. These can be accessed in multiple ways; by post, telephone, SMS, email or web pages. Allow people to respond according to their preferred communication method. Free phone (0800) numbers usually work well. Make sure you code each advertisement and track the responses.
The free information can provide valuable insights into the buying considerations for your product or service. By providing this information you are positioned as an expert and people like to buy from specialist suppliers.
Once you have received an enquiry from a targeted prospect you can then nurture them to their point of readiness to buy. This may take a number of contact steps and people often enquire long before they are ready to buy. Potential buyers typically undergo a search process prior to spending their hard-earned cash.
Just one last tip; place your company name and logo in a bottom corner. Unless you are a known household brand your name and logo is unlikely to produce any positive influencing power with potential purchasers.
Feel free to add comments regarding your experiences with printed advertising
Brian.
Topics: Customer acquisition | 1 Comment »
Priming for Growth with the Appropriate Systems
By bpjames | March 12, 2009
It’s essential to have the right systems in place to lay the foundations for profitable and sustainable growth in your business. The right systems will help you coordinate your business development. This ensures the effective management of factors such as risk, gaining access to cash and other resources and ultimately culminating in a successful exit.
This requires a range of systems to help you integrate all the key aspects of your business to survive and thrive. This includes systems to assist with your overall strategic direction, sales and marketing, finance, operational and people issues.
Strategic direction
This requires a range of the appropriate planning and diagnostic tools and enables you to convert your vision into a workable plan that can be adapted as you progress. Several such tools are available free on the Business Link website. Just search for Growth Action Plan at http://www.businesslink.gov.uk/
Sales and Marketing
You want a clear sales process for finding, converting, keeping and developing good customers. You want to be able to regularly obtain quality feedback from your customer base for refining your range of products and services and improving service delivery.
Communicating the right message to the right group of customers at the appropriate time requires accurate records and effective communications tools. Customer Relationship Management (CRM) tools can streamline and in some cases automate this process. Some of the better known systems for small businesses include ACT, Sales Force and Goldmine. Make sure you have quality systems for managing your customer relationships.
Finance
Running out of cash is the most common reason for business failure. Managing cash flow and credit control are critical ongoing requirements. There are many accounting and invoicing systems you can use. Some of these include Sage, Quickbooks and www.re-cursion.com
Operational issues
What systems do you have in place for maintaining the quality delivery of your products and services? Ongoing quality control and regularly backing up essential data are important parts of this process. Building Blox IT, is one example of a company offering secure data backup both on and offsite.
People management
You want to manage all the essential people management elements within your business. As well as staff, this includes suppliers and business partners. Staff require ongoing training and development. You must ensure your pay and reward system is fair and you are meeting the requirements of Employment Law.
Some such systems include youmanage and www.peoplestuffonline.co.uk
By choosing a range of appropriate systems you are able to integrate and in many cases automate your business processes. In doing so, you prime your business ready for robust, profitable and sustainable growth.
Brian.
Topics: Systemisation | No Comments »
Generating Ongoing Sales from Existing Customers
By bpjames | February 25, 2009
Gaining ongoing sales from your best customer relationships is one of the most rewarding and profitable ways to generate new business. So how do you decide which customers to approach and what to make available to them? Here are a few suggestions to help you identify the right customers and present the right message to them.
Segmentation
To begin with you want to be able to identify the best customers for ongoing development. This is often described as a customer segmentation exercise and involves splitting your customer base into quality groups. One of the simplest methods is to use the ‘R.F.M.’ formula. This is an acronym for how Recent, Frequent and the Monetary value of sales. This means you combine information on how recently a customer last purchased from you, how frequently they typically make purchases and how much on average they spend. Ideally their spending should be related to the gross profit margin it produces rather than just the amount they spend.
For example, a good customer may have bought from you within the last month, typically buy several times a year and generate significant gross margin. A poor customer, on the other hand, may have only bought from you once or twice over several years; the last purchase was over a year ago and produced a low level of profitability. Using this method you can arrange your customer base into 3 or more quality groups. The best quality group should be communicated with on a more proactive basis. The poorest quality group might be dealt with on a reactive basis only and you might even decide to pass them on to another suppler who can serve their needs better.
Product & service funnel
You want a range of products and services operating at different levels of commitment to ensure you keep and develop your best customers. This requires making the right product or service available to them at the right time.Let’s take an Accountancy business as an example. Here is a suggested range of related services that operate at different levels of commitment:
- Online invoicing system
- Basic bookkeeping service (invoicing, VAT returns)
- Managing payroll
- Producing annual returns
- Financial audits
- Tax planning consultancy
A new customer might be attracted to the online invoicing system or basic bookkeeping service. This produces regular profitable business at a relatively low level of spending and gets them into your funnel.
At the other end of the spectrum, one of the best established customers might be purchasing the whole range of services, producing regular sales that are very profitable. My experience has revealed that your best customers will spend up to 5-10 times more than your average customers.
You often don’t know in advance which customers are going to develop into the best ones. By having a comprehensive product & service funnel and by maintaining regular contact, you are able to nurture your best customers and establish your most fulfilling customer relationships.
Brian.
Topics: Customer development | No Comments »
Turn Your Business into a Big Money Spinner in 3 Years or Less
By bpjames | January 30, 2009
It’s very likely your business has the inherent potential for explosive and virtually limitless growth. There are 3 key elements to turning your business into a million or multimillion success story.
They are all within your control and relate to your:
- Mindset
- Market proposition
- Marketing effectiveness
Let’s take each one in turn to discover how you can use this knowledge to take control and to transform your business results. In a year or two from now you could become very rich indeed.
Mindset If we were to prioritise the 3 elements then this one aspect alone would represent over 90% of the success factors. It starts with our thinking and we need to learn to think BIG. Our outer world reflects our inner world and becoming rich is a manifestation of our inner world. It is a process of cause and effect. If we plant the right seeds then the fruits will appear in abundance. We can count the seeds in an apple but we can’t count the apples from a seed.
We need to learn how to manage money and to have our financial thermostat set on boiling point for spectacular success. This is a process of awareness and choice by being constantly prepared to stretch and grow.
You want to infuse your business with passion, vision, inspiration, enthusiasm and commitment. Our mindset determines our impact on others. You either affect people or infect people. Make sure you have a positive influence on others wherever you are.
Be aware that there are challenges to overcome. In order to be centred in the present moment we need to learn to handle problems and overcome our fears and doubts. We are constantly bombarded by messages of failure, rejection and the fear of the unknown. It takes inner strength from within to manage our thoughts and pull out the “weeds of destruction” as they attempt to grow in our minds leaving us feeling disempowered.
Market proposition
Your proposition needs to differentiate you from other businesses. Always working from the highest principles of ethics you want to constantly strive for a creative and attractive value added package of products and services. Your quality test can be that if you are offering less than you would provide to your very best friend then there is room for improvement.
Marketing effectiveness
You want to constantly drive your business with furious and effective marketing. This requires massive action and knowledge of your marketplace. You need to be aware of the supply and demand factors that govern your natural business cycles. Equip yourself with the right tools and position yourself as an expert in your field. Modelling other successful enterprises can help - don’t try to reinvent the wheel!
Brian.
Topics: Winning mindset | 1 Comment »
Complete Mood Survey and Receive 3 Special Gifts
By bpjames | January 6, 2009
I’m inviting you to share your business mood by answering 7 quick questions.
As a ‘Thank You’ for giving your opinions you can claim up to 3 gifts:
Gift 1: Download a copy of Magnetic Marketing Mindset Secrets: 42 Tips and Techniques to Get Red-Hot Prospects Demanding Your Products or Services. This is a collection of timely insights a successful entrepreneur wrote and which were edited by my copywriter friend, Carol Bentley. This is definitely worth getting. (See details of her new book below).
Gift 2: Grab your half-price seat for our next Live Event on 23rd January at the Oxford Belfry hotel. We are offering places at £49+VAT instead of the usual £99+VAT - that’s a great bargain when you consider the additional bonuses are worth £127 plus on their own! Take a look at http://www.brianjamesgroup.com/doubleprofits.html
Gift 3: If you can’t make the 23rd January or can’t get to the Oxford Belfry you can opt for a half-price telephone consultation to give your business a kick-start for 2009. Read more about what you can expect to gain at http://www.brianjamesgroup.com/sales.html
The questions are check box selections and shouldn’t take more than 5 minutes to run through. You are not asked to give any personal / contact details. When you’ve sent in your answers you are taken straight to a ‘Thank You’ page where you can download Gift 1 and claim one or both of the other generous offers.
Please visit http://www.surveygizmo.com/s/92794/business-mood-survey
to share your views. Thank you. Brian.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++
Newly Released Book by Carol Bentley:
Beat the Recession: Proven Marketing Tactics
Delivers an essential collection of “real world” business
advice, strategies and tips.
Get your copy at http://www.bentleybtr.com/
+++++++++++++++++++++++++++++++++++++++++++++++++++++++
Topics: Special Offer | No Comments »
Expand Your Customer Base the Easy Way
By bpjames | December 30, 2008
The most cost effective way to increase your customer base is by obtaining valuable referrals from your best customers. Most good businesses receive new customer referrals automatically from their existing customer base; however this normally has limitations,
as follows:
- The flow of automatic referrals is unlikely to be adequate to build your business exponentially
- Referrals emanating from the whole of your customer base does not provide targeted and highly qualified leads as only the best customers provide the best referrals
To overcome these limitations you need to proactively seek greater volumes of highly qualified customer referrals. You can do this in two ways. Firstly you need to segment your existing customer base to identify the best customers. This may typically be 20% of your customer base. Secondly you need to ask your best customers for referrals in the most appropriate manor.
Customers who refer others to you tend to refer those who are of similar mind, 
having similar purchasing needs and purchasing power.
Every business has problem customers from time to time. This can be due to bad service levels or the inability of your business to meet the ongoing needs and expectations of certain customers. Equally, I find, the problem customer has nothing to do with the quality of your products and services at all, but everything to do with them as a customer. They may have unrealistic demands or they may just be badly aligned to your business proposition. In other words there may be a mismatch between their specific needs and the solution your business provides for people. So despite the fact they have become a customer they don’t actually meet your requirements as a well qualified targeted prospect.
Here’s an example. Let’s say that you provide a complete domestic carpet cleaning service for your customers. You are able to provide a whole range of domestic carpet and upholstery cleaning within a home environment. What you don’t do however is provide industrial cleaning for factories and warehouses. All your best customers enable you to keep their carpets and upholstery clean and fresh within their home.
Let’s assume you attract a new prospect looking for a large-scale refresh of their entire factory and warehouse facility. You decide to take on this customer because you don’t like to turn people away. Given the best will in the world this is unlikely to work out and difficulties will probably occur. This situation can be avoided by only taking on qualified prospects as new customers.
Here are some of the key elements for assessing qualified customers:
- You have ready access to them for regular contact
- They have a genuine and a matched need for your solution
- They are able to afford your prices
- They are willing and prepared to pay your price
- Their purchases are capable of generating gross margin for your business
- Their ongoing servicing needs are matched by your service levels
Once you have identified your best customers you then need to ask them for referrals. It is unlikely you will receive the maximum potential of quality referrals without asking for them.
If you would like a sample of a customer referral letter that has proved to work time and time again then this is available to you free of charge as a blog subscriber in my Resource Area. It’s the 9th item on the list at http://www.brianjamesgroup.com/DownloadAssistant/default.asp
Brian.
Topics: Customer acquisition | 1 Comment »