Carefully consider these options. You should be able to implement at least one or two of them immediately.
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. First you need to sort your products and services by their profitability and then analyze your expenses according to which sources of revenue they support. “Most 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 products or services that require the highest percentage of costs in order to deliver them, you can see immediate improvement in profits, says Shepherd.
Make sure any products or services you drop are not loss leaders or entry points for other projects. For example, the margin on the design and printing of business cards are slim but if they lead to other projects, the smaller margin is justified.
Send “difficult” clients or those you simply don’t like to your competitors.
David Maister, a consultant for top professional firms around the world, conducted a survey that revealed that respondents really liked about 30-35 percent of their customers; they were indifferent or tolerated 50-60 percent; and didn’t particularly like 5-20 percent of their customers.
Why spend your time working with customers who you don’t like or are otherwise bothersome when, with some effort in such areas as client retention or niche marketing, you can spend your days working on exciting projects for interesting people, asks Maister. You’ll feel more enthusiastic about your work and get more done when you send unpleasant or troublesome clients – and often the ones where the profit margins are slimmer – to get their printing needs met elsewhere. You don’t need to be rude, just be polite and move them on.
Pursue customers who can or will pay more.
A manager once told me that she’d come to the conclusion that people starting a small business simply wouldn’t pay the prices she was charging. I didn’t agree because I’d had clients ready to spend big on launching their new business. They were professionals in their forties and fifties and either had a substantial severance package 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. There is a growing niche of small business owners and professionals who understand the world of business and are not afraid to spend money for marketing materials.
Usually, 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.
When a new business is launched and business stationary is being ordered, why not discuss other marketing materials such as brochures, booklets, information packages, etc. The more you can sell yourself to an existing customer – and show them you are interested in helping them – the more you’ll uncover selling opportunities.
Reuse everything you create in different formats or for different purposes.
“Do once, sell three times” is a shrewd money making mantra. If you teach a seminar on designing brochures or publishing a book, turn that information into a booklet for your customers as a value-added product. If you collected industry data to enhance your marketing effectiveness, sell that information to colleagues or clients. If you regularly send staff to upgrade their skills on using new software or equipment, find ways to use that new skill in other areas. For example, if data processing for larger clients is part of your business, find ways to offer that skill to smaller clients who could not afford to operate their own data processing. The smaller client benefits because of your insight and experience that you’ve acquired serving another client.
Create an army of sales reps through ‘affiliate’ programs.
Businesses whose offerings complement yours may be happy to promote your services 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.
At a local level, building relationships with marketing companies or design firms who refer business to you is an ideal way to expand your sales force. Cross promotion, piggybacking and strategic partnerships are relatively easy ways to boost sales without a lot of effort. And in a price war environment, providing benefits from other business partners can give you the pricing edge.
Cultivate and reward those who send referrals.
Two ordinary words work magic when it comes to nurturing relationships with people who regularly send you business: “Thank you.” If they send you clients with a particularly high value, sending 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.
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? Let me know when you try any of these moves and get extraordinary results!